Southwest Airlines Swot

SOUTHWEST AIRLINES/WWW.SOUTHWEST.COM/ TRAVEL INDUSTRY

BACKGROUND/HISTORY/COMPANY TIMELINE

Southwest was first established in 1971 after an opportunity was seized by Kelleher and King. They recognized the stress and high cost of transportation between Houston, Dallas and San Antonio, also known as the Golden Triangle. They created Southwest Airlines (SWA) to operate out of Dallas Love Field. Since the start of SWA there have been a few CEO’s that have resigned after pressure from the falling economic prices and the increased need for employee satisfaction. The current CEO is Gary Kelly who took charge in 2004, after James Parker resigned. The net income has increased from 179,000 in 2008 to 459,000 in 2010. (Income Statement, 2011)

SWOT ANALYSIS

Strengths

* Excellent employee relations.

* Award winning customer services.

* Utilizes the internet for booking tickets.

* Best prices for ticket fares.

* Purchased only Boeing aircraft, receive discounts.

Weakness

* Space to carry cargo is limited.

* There are no international flights.

* Dependent on Boeing.

* Limited cities available.

Opportunities

* Expansion to other cities.

* Expansion to international locations.

* Creating business class seats.

Threats

* The falling economy.

* Terrorist threats make people afraid to fly.

* Increase in gas prices cause their ticket prices to rise.

ANALYSIS VIA PORTER’S FIVE FORCES MODEL

The threat of new entrants – There is a large threat of new entrants that can take Southwest’s business away. However with the loyal customers that SWA has created will make it difficult for the new entrants.

Bargaining power of buyers- SWA only purchases Boeing aircraft so this does give them advantage considering they purchase large quantities at a time. This not only gives them a discount on prices but gives them an edge as a loyal “customer”. That is also a disadvantage because Boeing knows that SWA only purchases...