Southwest Airline

Global Business Community (Macro environment)

The global business community or the Macro environment of an organization greatly impacts an organization. The following section will discuss society values, demographics and psychographics, economic, natural and physical location, political and legal, and technological forces that impact Southwest Airlines.

Society

Today’s society is fast-paced and values an affordable airline. Customers travel from one place to another through different modes of transportation. According to Southwest’s former CEO Herb Kelleher, today’s customer wants to get to a destination safely, on time, and with their baggage (1995). At affordable pricing, today’s customer may be willing to forego driving short distances if they can afford a low-cost flight.

Demographics, psychographics

“The U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today that U.S. airlines carried 58.7 million scheduled system wide passengers in November 2012, 0.8 percent more than in November 2011” (Smallen, 2013). The average airline customer is willing to go without extra legroom, comfortable seating, and meals in order to pay for an affordable plane ticket that guarantees a convenient and good customer experience (Rhoades, D.L., 2006). This information is essential for airliners to build brand loyalty over a long period of time if they cater to its customer’s ever-changing needs.

Economic

In today’s economy, many customers have limited spending money so every dollar and decision on food products counts. “Airline revenues are based on the number of people in seats per flight, and empty seats mean lost revenues. Filling a seat, even at a discount, adds revenue (Anonymous, 1997).” Today’s rising fuel costs are greatly impacting airliners.

Natural/Physical

Location and weather climate are critical to airliners Having enough physical airplanes to support flights from domestic destination to destination to meet...