Southwest Airline Turnaround Strategy

Southwest Airlines:

A turnaround strategy

for executive management

Executive Summary

This paper explores the strategic management of Southwest Airlines. It will first identify the mission and secondly the external environmental factors that affect the business strategy of this organization. Next, this analysis will evaluate the sustainability of the business plan using selected strategic tools and then its current strategy will be evaluated based on recent decisions by management. Finally, it offers executive management a recommended turn around strategy for future growth described within the context of a strategy diamond for immediate implementation.

About Southwest Airlines - Its mission and goals

Southwest Airlines is a Dallas, Texas, based commercial carrier that began interstate operations in 1971. Its mission is dedicated to the highest quality of customer service delivered with a sense of warmth, friendliness, and company spirit. This mission statement is specifically geared above all towards its employees, with a firm commitment from the carrier to provide a stable work environment, with opportunities for learning and personal growth, where creativity and innovation are encouraged, in a respectful and caring environment that they are expected to share outwardly with every customer (Southwest Airlines, 1988).

Analysis of external environmental factors

A PESTEL analysis reveals the critical external factors and issues for Southwest Airlines, and their causes:

Political Problem: Local regulatory agencies, such as the Texas Aeronautics Commission, are sensitive and responsive to the complaints and requests by rival carriers for offering service in Southwest’s target markets, and the ensuing protracted litigation is a distraction to management. Cause: Competition from rivals is intense and they will defend their existing market share through government and regulatory intervention.

Environmental Problem:...