Running Head Values and Strategy MARKETING .docx

Running Head: Values and Strategy
MARKETING
6
Introduction
The significant components of strategic management include;
conducting internal and external analysis which will be a
guideline in setting up the vision, mission, strategies; Scanning
the business environment; strategic formation; implementation
of strategy and strategic evaluation the process follows POLC
(planning, organization, leading and controlling)
Strategic management process
Hitt et al. (2014/01/01) state that the strategic management
process is a phase whereby an organization has a full set of
commitments, decision making, and actions that are detrimental
for the firm’s ability to achieve strategic competitiveness and
high revenues. Therefore, the organization needs to conduct
both internal and external analyses to determine the firm’s
resources competencies and capabilities thereof strategy will be
based. The information gathered from the analysis will be used
in formulating the firm’s vision, mission, and strategies.
The strategic management process begins by identifying the
mission and vision of the organization and afterward setting
attainable short-term goals, which will be the building blocks
for the long-term objectives that align with the mission and
vision of the company. Therefore, the mission and the vision
statements of the company create a broader guideline for the
organization.
Scanning the business environment by conducting the SWOT

and PEST analysis is an important strategic tool to understand
the intricacies of the business environment. Hitt al et explains
the importance of understanding the business landscape; with
challenging emergence of global economy and globalization,
dynamic changes in market trends and the ever-changing
technological innovations (Hitt, 2014/01/01) in the recent years
business paradigms have shifted to sustainability; the challenges
that have arisen in the recent years comprises of significant
challenges associated with the environment, economic and
social issues. Consumers are aware that natural resources are
getting depleted, the rise in global poverty, climate changes,
and economic injustices (Fairbrass, 2012).
The strategic formation is a phase where organizations decide
on what actions to choose from multitudes available. These
choices are carefully selected and deliberated; they are a
product of the SWOT analysis influenced by the external
analysis. Therefore, the main objective that spearheads an
effective formulated strategy that marshals, integrates, and
allocates organization resources, core competencies, and
capabilities to align with the organization's vision and mission
statement. A successful strategy will rationalize a firm’s vision
and mission and actions taken to achieve them (Hitt,
2014/01/01). Also, while formulating strategies, it is essential
to innovate; some corporate innovations include product,
process, marketing, and management innovations. Innovations
also include new leadership styles, organizational cultures, and
commitment that impact employees directly and their
willingness to work (Wu et al., 2011).
Strategic implementation is conducted at the organizational
level where resources are delegated, human resources training,
channel development, and the organizational culture is rectified
or modified to suit the strategies; This is the phase where
network partners are also involved in maximizing benefits.

Major Components of the Strategic Management Process for
Southwest Airlines
Strategic management process for Southwest Airlines include
environmental scanning, strategy implementation, formulations,
and evaluation. Rothaermel (2015)South West airlines analyze
relevant internal and external determinants of the firm through
feed backs, reviews, information understudy, and scrutiny.
Also, by conducting the analysis, the company is able to
improve its services and conform to the market trends
continually.
Strategic formulation
Southwest airlines prioritize its objectives and SMART goals
by ensuring that their services are delivered as promised; that
is, their services are rendered by a stipulated timeline with the
highest efficiency and effectiveness. The strategy formulation
of the company is following the environmental scanning After
completing environment scanning, the strategic managers
formulate functional strategy, corporate strategy, and business
strategy, in order to enable the company to achieve the strategic
goals and objectives (Rothaermel, 2015).
strategy implementation,
At strategy implementation, strategic managers, together with
relevant stakeholders, create the organizational structure of the
company, allocate and distribute resources, the design process
of making decisions, and manage HR resources.
Strategic Evaluation
The last step of the strategic management process is strategy
evaluation. POLC(planning, organizing, Leading, and

controlling) is applied at this point; This the point the feedback,
reviews, and other reports are scrutinized in-depth in relation to
the strategies used. The company compares the anticipated
results with actual results and mitigates to ensure that the
strategic process is gearing towards the intended results for its
goals and objectives. A strategy evaluation, strategic managers,
use performance metrics to evaluate the entire strategy
(Rothaermel, 2015). Some of the performance metrics used by
the strategic managers include employee satisfaction, turnover
rate, employee retention, and quality of services delivered by
employees.
When undertaking a strategy evaluation, the loyalty of the
human capital is an important metric used to evaluate the
success of the Strategic Management Process. To measure the
loyalty of the customers, purchase ratio, upselling ratio,
customer loyalty index, customer engagement numbers, and net
promoter score are effective methods (Rothaermel, 2015). The
purchase ratio involves measuring the ratio of repeat purchases
over one-time purchasers. Upselling ratio involves calculating
customers who have sought services for more than one type of
product divided by customers who have sought for service only
one. The customer loyalty index incorporates values of
repurchasing, NPS, and upselling to evaluate customer loyalty.
How Strategic Management Process Components Create Value
Proper integration of f Strategic Management Process
components helps in creating value. Through proper
environment scanning, the company is in a position to
understand the negative external and internal factors that
inhibits the progress of the company and work towards
correcting those negative triggers. As a result, it enables the
company to innovate its service delivery to the customers
(Scarborough, 2015). When there is a proper environment
scanning, it makes it easier to undertake strategy formulation
and implementation. As a result, it enhances a proper design of
the course of actions that help to improve quality. When
strategic managers undertake a proper strategy evaluation, it

makes it easier to concentrate on value elements such as the
safety of services, efficiency, and effectiveness (time
management).
Southwest Airlines Summary
The mission statements
The mission statement of Southwest Airlines is "dedication to
the highest quality of Customer Service delivered with a sense
of warmth, friendliness, individual pride, and Company Spirit"
(Southwest Airlines, n.d). To improve on the quality of service
delivery as stated in the mission statement, the company focuses
on staff training in order to create awareness of how to offer
quality services that boost the level of satisfaction of the
customers.
The vision statements
The vision statement of Southwest Airlines is "To become the
world's most loved, most flown, and most profitable airline."
(Southwest Airlines, n.d)
According to the CEO of the company, the vision of the
company is achieved by "providing employees with a stable
work environment with equal opportunity for learning and
personal growth" (Southwest Airlines, n.d). The CEO believes
in creating a conducive work environment by providing equal
opportunities for learning, and individual growth nurtures the
spirit and teamwork that is grounded in social cohesiveness;
human capital is the driving force for-profit motives of the
company.
SouthWest airlines have incentives, benefits, free-flying passes.
Also, employees have the opportunity of getting a stock
purchase plan. Southwest Airlines has been ranked as one of
the best companies in staff retention with the lowest turnover
rate. The company's organizational cultures are grounded on
improving service delivery to its customers. The people strategy
of Southwest Airlines is to improve the livelihood of primary
stakeholders such as customers, employees, investors, and
communities.

Role of Ethics and Corporate, Social Responsibility in Strategic
Planning
At Southwest Airlines, ethics and corporate social
responsibilities are the compasses that assist the company to
focus on the demands, aspirations, and plans of the primary
stakeholders. Therefore, it gravitates to the company to make
with the stakeholders' interest at heart while delivering the
promises made to the customers. Ethics and Corporate Social
Responsibility assists the company to deliver informed
decisions without neglecting corporate and business strategies
(Scarborough, 2016). Also, ethics helps to leverage positive
inputs of employees during strategic planning. Hence, it
improves the credibility, reliability, and effectiveness of the
entire strategic plan.
Ethics and corporate social responsibilities spearhead Southwest
Airlines into implementing a strategic plan for moral values,
respect to diversity, and principles of the society and the
company; also, help in acknowledging the societal expectations
and values of the primary stakeholders (Rosemann & vom
Brocke, 2015). SouthWest achieves this by being transparent to
its stakeholders on the changes and trends in the strategic plan
and therefore increasing the credibility of the entire strategic
plan.
References
Fairbrass, J., & Zueva-owens, A. (2012). Conceptualizing
corporate social responsibility: 'relational governance' assessed,
augmented, and adapted: JBE JBE. Journal of Business
Ethics, 105(3), 321-335. doi:http://dx.doi.org/10.1007/s10551-
011-0968-9
Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (20140101).
Strategic Management: Concepts and Cases: Competitiveness
and Globalization, 11th Edition [VitalSource Bookshelf
version]. Retrieved from vbk://9781305217188

Rosemann, M., & vom Brocke, J. (2015). The six core elements
of business process management. In Handbook on business
process management 1 (pp. 105-122). Springer, Berlin,
Heidelberg.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill
Education.
Scarborough, N. M. (2016). Essentials of entrepreneurship and
small business management. Pearson.
Southwest Airlines. (n.d). Our Business: Purpose, Vision,
Values, and Mission. Retrieved from
http://investors.southwest.com/our-company/purpose-vision-
values-and-mission
Wu, S., & Lin, C. (2011). THE INFLUENCE OF INNOVATION
STRATEGY AND ORGANIZATIONAL INNOVATION ON
INNOVATION QUALITY AND PERFORMANCE. International
Journal of Organizational Innovation (Online), 3(4), 45-81.
Retrieved from
https://search.proquest.com/docview/905854310?accountid=358
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Running headInternal Analysis
1
[Shortened Title up to 50 Characters] 9

INTRODUCTION
The sole reason for conducting an assessment in an
organization’s internal environment; is to ensure that the
organization is capable of achieving the intended strategic goals
in line with the company's mission with the delegated resources
and capabilities. Therefore, the internal environment
assessment determines the organizations' portfolio of its entire
resource and capability. Through internal analysis, a firm can
determine the relationships between resources, core
competencies, and capabilities (Hitt et al., 2014).
Also, the market dynamics have changed to global; therefore,
the organization needs to develop a global mindset to have the
ability to contend with similar firms that are coming into the
market on a global scale. Hitt et al. (2014) state that it is
common for firms to differ in the amounts of resources
accumulated or rather the type of resources’ which increase the
competition within the market and a company’s competitive
advantage may not be guaranteed without innovating (Hitt et al.,
2014).
Kinicki (2015) adds that the internal environment comprises of

the employees, the board of directors, and the owners; the
internal environment at times may also consist of stakeholders
and people whose interests are inclined with firm performance
(Kinicki, 01/2015). Therefore, supporting Hitt et al. (2014)
idea of innovation as the most critical aspect in any firm to
sustain its competitive advantage, whereby human capital is the
essence and critical resource for achieving the goal. Therefore,
it is essential for the organizations to be able to identify and
successfully utilize talented individuals for innovation,
creativity, and economic growth.
This paper seeks to explore how Southwest airlines utilize its
resources and capabilities to achieve the company’s strategic
goals; how the company has managed to create services of value
to its customers (Hitt et al., 2014).
Southwest internal analysis
Human Capital Strategy
Hallowell (1996) asserts that "Southwest Airline's success is
dependent on its organizational capability, which enables them
to convert some of the value created for employees to customer
and shareholder value." Southwest understands the value of
innovating human capital and utilizing them as a resource to
attain the firm strategic goals and objectives. Also, as a result
of the capability of adequate use of its human resources, the
employees deliver quality service at low prices, which is
Southwest's competitive advantage.
Therefore, for Southwest to maintain its competitive
advantage that it has formed through people, the company
requires to employ motivation, organization capabilities, and
strategic positioning. Southwest uses its resources to ensure that
its employees feel valuable; the sense of feeling value inspires
the employees to work hard. The value instilled into the
employees; some of it rubs off to the customers. Therefore,

"creates value, convert value, capture value cycle which may
apply to some extent in competitive advantage (Hallowell,
1996).
Airline Strategy
Southwest Airlines is a low-fare passenger airline that provides
services in the US and near international markets. The company
serves 97 destinations in 40 states and international
destinations, including Jamaica, Mexico, Bahama, Aruba,
among others. Southwest is primarily operated by one segment,
which is the passenger and freight transportation services; the
company provides point to point air transportation service.
Therefore, the company is high frequency, short-haul routes
with nonstop long-haul hauls for designated states and cities
(MarketLine Industry Profile, 2017).
Strengths, weaknesses, and resources of Southwest airlines
1. Strength
Fleet network
In the most recent data from the US department of
transportation, Southwest Airlines is the largest carrier of
originating domestic passengers. In 2018 the airline operated a
total of 750 Boeing 737 by December 31; the airline also served
99 destinations, 40 states, and offered international services to
14 destinations through 23 international gateway cities. Besides,
the airline added 26 new 737-800 aircraft, 18 new 737 MAX 8
aircraft, and one pre-owned Boeing737-700 aircraft. The strong
airline fleet is a big resource, which enables the company to
deliver its services effectively and efficiently to its customers
and a quick response to opportunities (Southwest Airlines Co.
SWOT Analysis, 2019).

Point to point service strategy
Hub and spoke system is the popular service strategy with many
airlines; however, Southwest uses the point to point strategy,
which was a great fit that ensures maximum usage of its fleets
and "reliable on-time performance. The point to point strategy
offers nonstop flights; 77% of Southwest customers flew
nonstop. Also, the southwest point to point It to provide its
target market with frequent conveniently timed flights at low
fares. Also, the company "balances its high-frequency short-
haul with nonstop long hauls (Southwest Airlines Co. SWOT
Analysis, 2019).
.
Low-cost fares
The airline fare structure comprises of; “wanna get any away”,
anytime and business select; also, the fare includes two free
checked-in luggage, soft drink, and snack. On some flight, they
are also on-demand or live television. Wanna get away fares are
the cheapest and nonrefundable; anytime and business select are
refundable. Southwest is focused on reducing fuel costs by
upgrading and buying new fleets and taking advantage of other
fuel initiatives (Southwest Airlines Co. SWOT Analysis, 2019).
.
Weaknesses
Reliant on single aircraft and engine supplier
Boeing is Southwest sole supplier for aircraft, and many of its
spare parts. Hence, the company may be "materially adversely
affected " in the event of a regulatory or mechanical issue with
the Boeing 737 aircraft. The company has a total of 750 Boeing
737, and 51 of the aircraft are on operating lease. In addition, if

Boeing were unable to deliver any of its services to Southwest
Airlines, the impact would be dire to the company's operations
(Southwest Airlines Co. SWOT Analysis, 2019).
Limited presence in the freight market
In 2018 Southwest freight transportation was limited when
comparing its total revenue to all the airlines; its total revenue
was $175 million, which was 0.8 percent of the entire
company’s revenue (Southwest Airlines Co. SWOT Analysis,
2019).
Southwest Airlines' structure of the organization and the
influence this has on its performance.
As mentioned earlier, Southwest values its human capital;
employees are viewed as the heart of the delivery system;
though high-quality service with low costs. Therefore, the
management strives to fulfill employees' needs as a means of
motivating and creating a value that will, in turn, be converted
to the organization's use. The value in Southwest airlines is
created by " FUN and LUV. The value created by employee's
management utilizes it to convert it into a high value, which can
accrue customers a shareholder (Hallowell, 1996).
Below is a Southwest Virtuous cycle of the organization and the
influence it has on the performance.
Figure 1 Southwest Airlines' virtuous cycle (Hallowell, 1996)
Southwest airlines in comparison with other airlines

Most airlines have strategic strike alliances to which has
ultimately led to stiff competition to non-members; also, with
an added advantage of operating in an environment where
competitors are under bankrupt protection, which creates
uneven grounds for competition. "The alliances pose threats to
routes within which they would fly"(Riwo-Abudho, 2013).
However, Southwest has not established any alliances; as a
result, Southwest is under immense strain to maintain its
position in the industry while running a smaller fleet (Southwest
Airlines Co. SWOT Analysis, 2019).
References
Dearinger, R. L. Organizational Behavior Evaluation of
Southwest Airlines.
Hallowell, R. (1996). Southwest Airlines: A Case Study Linking
Employee Needs Satisfaction and Organizational Capabilities to
Competitive Advantage. Human Resource Management, 35(4),
513–534. https://doi.org/10.1002/(SICI)1099-
050X(199624)35:4<513::AID-HRM5>3.0.CO;2-Z

Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2014/01/01).
MarketLine Industry Profile: Airlines in North America.
(2017). Airlines Industry Profile: North America, 1–42.
Riwo-Abudho, M., Njanja, L. W., & Ochieng, I. (2013). Key
success factors in airlines: Overcoming the challenges.
Kinicki, A., Williams, B. (01/2015). Management, 7th Edition
[VitalSource Bookshelf version]. Retrieved from
vbk://1259723542
Pidun, U. (2019). Corporate Capabilities. In Corporate
Strategy (pp. 33-53). Springer Gabler, Wiesbaden.
Southwest Airlines Co. SWOT Analysis. (2019). Southwest
Airlines Co. SWOT Analysis, 1–8.
Running head: ENVIRONMENTAL SCAN 1
[Shortened Title up to 50 Characters] 9

Introduction
Author (2016) states that a company’s value and ability to
sustain competitive advantage through its ability to "devise new
resources and reconfigure existing ones to address issues that
arise in the external environment. Environmental scanning is
defined as the act of scanning and acquiring information about
relationships and events in the external environment that have
importance for charting and achieving the organization's
strategic goal and mission (Ciaran Heavey, 2009). Therefore,
the organization needs to conduct environmental scanning by
also investigating how other firms interpret environmental
signals.
Ciaran (2009) states that environmental scanning has become

paramount due to the increase in complexity, dynamic
environment, and competitiveness that are spearheaded by the
global forces, customers, channels, and transferable marketing.
The author also mentions global cost drivers which are
economies of scale, scope, learning, and experience(Ciaran
Heavey, 2009). Besides, Yu et al. (2019) give examples of
models used in environmental scanning that is (SIAP) scanning,
interpreting action and performance model, and (OIPT)
organization, information processing theory can be used as a
metric to explain environmental scan performance.
Also, environmental scanning is fundamental to many vital
strategic processes, including planning, decision making,
innovation, and organizational design (Ciaran Heavey, 2009).
Some of the advantages associated with environmental scanning
include fast response to changes with consumer demand, supply
disruption risks, and realigning the supply resources with the
environment (Yu, 2016). This paper aims to discuss how
environment scanning is used by South West airlines to sustain
its competitive advantage within their target market
Southwest Airlines external environment.
Southwest Airlines is one of the low-fare passenger airlines that
provide services in the US and near international markets. The
company serves 97 destinations in 40 states and international
destinations, including Jamaica, Mexico, Bahama, Aruba,
among others. Southwest is primarily operated by one segment,
which is the passenger and freight transportation services; the
company provides point to point air transportation service.
Therefore, the company is high frequency, short-haul routes
with nonstop long-haul hauls for designated states and cities
(MarketLine Industry Profile, 2017).
Challenges Facing Southwest airline
1. Product innovation and supplier (economic and

technological)
In Aviation, modern technology and advance innovations are a
force that affects operations and drives for change. Southwest,
among all other airlines, are heavily dependent on the systems
that are subjected to advancements from innovation (Riwo-
Abudho, 2013). The manufactures of Boeing are dedicated to
innovation; therefore, they produce modern planes and engines
through their R&D; Boeing is the majority carrier for
Southwest. Therefore, southwest is faced with the challenge of
upgrading their planes and systems that requires much
investment of resources. Also, other cost includes
communications systems, maintenance, insurance, and training.
(Riwo-Abudho, 2013).
2. Reputation (Social)
Like all businesses, Southwest depends on its good name to
retain and acquire more customers. However, in the event of bad
publicity can be detrimental to the firm. Some of the recent
notable scandals for Southwest airlines include:
.1 engine problems in 04/17/2018 that resulted in a death
2. flights delays where Southwest was forced to ground 34
planes on their busiest travel weekend 11/26/2018
3. Baggage's issues; an employee was caught on camera tossing
baggage's haphazardly
4. price increase, the company is under pressure for quality
services due to the recent increase in airfare and lastly safety
and violations;
5. the company was caught falsifying safety reports in
conjunction with the FAA. The very reports that assure
consumers that the planes are safe. The airline had to pay $7.5
million in fines (Biggest Southwest Scandals, 2018).
a. Enlightened consumers

It is a norm for all companies to understand their target
consumers' needs and is obligated to incorporate them into their
services or products. The global market has become easily
accessible to consumers due to the internet. Therefore, the
internet has become a platform that is an opportunity at the
same time, a threat. The internet has provided an opportunity
for consumers to shop around for the best price and airline.
Therefore, Southwest has the responsibility of ensuring that
they sustain their competitive advantage by conducting frequent
environmental scans; to access new markets and profit
opportunities (Riwo-Abudho, 2013).
3. Competition: strategic alliance s and bankruptcies Political
Most airlines have strategic strike alliances to which has
ultimately led to stiff competition to non-members; also, with
an added advantage of operating in an environment where
competitors are under bankrupt protection, which creates
uneven grounds for competition. "The alliances pose threats to
routes within which they would fly"(Riwo-Abudho, 2013).
However, Southwest has not established any alliances; as a
result, Southwest is under immense strain to maintain its
position in the industry while running a smaller fleet (Southwest
Airlines Co. SWOT Analysis, 2019).
4. Increased expenses: labor, fuel and security measures
All Airlines, including Southwest, included overly depend on
the insurance payouts; due to the constant innovations and
advancement of equipment, facilities, and " advents of jets
meant more seat to sell" (Riwo-Abudho, 2013). Also, due to
terrorist threats, security measures have become a vital variable
to airlines; also, airlines are losing money since people are
using other forms of transportation for travel. Also, the fuel
cost has soared due to the political instability that has prevailed
in oil-producing countries. Therefore, Southwest is facing an

unpredictable environment that has rapid changes with different
variables. Therefore, strategic managers need to conduct regular
environment scanning to come up with ways of mitigating
different scenarios (Riwo-Abudho, 2013).
Inconclusion
Southwest has the challenge of ensuring it sustains its
competitive advantage by maintaining its target market position
while growing its market share. The marketing department has
to continue adding face value to the company by ensuring that
there deliver their services and amenities as advertised. The
Southwest airlines have been able to stick to its mission of
providing low fare for more than 30 years and has focused on
teams' spirit and other strategies; therefore, the company needs
to ensure that their strategies are keeping up with the dynamic
market trends (Riwo-Abudho, 2013).

Reference
author. (2016). Achieving a firm’s competitive advantage
through dynamic capability. Baltic Journal of
Management, 11(3), 260–285. https://doi.org/10.1108/BJM-11-
2015-0224
Biggest Southwest Scandals. (2018, November
29). International Business Times [U.S. ed.]. Retrieved
from
https://link.gale.com/apps/doc/A563644107/GIC?u=uphoenix&s
id=GIC&xid=a171c4d8
Ciaran Heavey, Richard T. Mowday, Aidan Kelly, & Frank
Roche. (2009). Reconceptualizing executive environmental

scanning and search: Implications for international leadership
research and practice. Emerald Group Publishing Limited.
https://doi.org/10.1108/S1535-1203(2009)0000005007
Yu, W., Chavez, R., Jacobs, M., Wong, C. Y., & Yuan, C.
(2019). Environmental scanning, supply chain integration,
responsiveness, and operational performance: An integrative
framework from an organizational information processing
theory perspective. International Journal of Operations &
Production Management, 39(5), 787.
Running head Strategic Evaluation
1
[Shortened Title up to 50 Characters] 9Strategic Evaluation
Babra Kamusinga
University of Phoenix
02/24/2020
STR/581
Lorelie Kaid, MBA, CSM, CSPO, CCMP, Pmp

INTRODUCTION
Barret (1994) states that at the Chicago conference in 1944, free
trade aviation was rejected of the fear that the USA would
dominate the market; therefore, a "system of bilateral air
treaties was established." Hence, every international aviation
market was served by two different airlines; that charged the
same airfare with a predetermined market capacity. Government
control over the airline was a formality. In 1978 there was the
deregulation of the airline with the belief that there would be an
improvement with the quality of the consumer service. Over the
years, the airline industry has evolved, and many features and
amenities have been developed and added as perks to the
consumers' examples are “hub and spoke networks, computer
reservations, frequent fliers, travel agencies commission
overrides and many more (Richards, 1996).
Contestability theory was utilized in predicting the airline
market structure. A contestable airline market is termed as a
costless entry and exit, that would promote competitors to enter
the market at any given time. However, Richards argues that
airline markets are not entirely contestable. However,
Southwest Airlines has managed to show that it is possible to
"compete with the hub-and-spoke systems by offering low-cost,
no-frills, and point to point service; this is depicted of how the
airline thrived in the early '90s while most airlines were

incurring heavy losses. Southwest Strategy of low cost and low
fare helped change the dynamic in the airline market, with the
belief that even the structure of the U.S airline industry would
adapt to the southwest model. The model applied to short hauls
and hub and spoke for long hauls (Richards, 1996).
This paper is an evaluation of Southwest strategic management
for business-level strategy and corporate-level strategy.
Evaluate potential business level strategies for southwest
airlines
Southwest Airlines has a business level strategy; the company
"believes in a sustainable future with a balanced model between
its consumers' shareholders and stakeholders. The company has
maintained its mission of a low-fare passenger airline that
provides services in the US and near international markets.
Also, Southwest is primarily operated by one segment, which is
the passenger and freight transportation services; the company
provides point to point air transportation service. Therefore, the
company is high frequency, short-haul routes with nonstop
long-haul hauls for designated states and cities (MarketLine
Industry Profile, 2017).
Assess potential corporate-level strategies for Southwest
Airline
Pidun (2019) states that an organization is capable of
developing an excellent corporate strategy after matching its
resources and core capabilities to the external environment
opportunities. Southwest is an airline company that has shown
its prowess by creating long-term value for its stakeholders.
Southwest is a company that has been operating for decades;
therefore, it has accumulated analysis of customers' competitors'

market resources and care capabilities. Therefore, the company
has the capabilities of expanding into other businesses such as
expanding to a freight company, acquiring the duty-free shops
with specific products; expand to airbus with destinations all
over the world by joining a strategic alliance with another
airline. Southwest will become diversified by operating all the
different product markets to increase its revenues and organic
market presence. Hitt et al. (2014) state that diversification
produces a firm with the flexibility of shifting their investments
to market with the highest returns rather than being dependent
on one commodity in one market. therefore, southwest top
management must keep a portfolio of “ businesses balances
diversification costs and benefits
global strategies for Southwest Airline
Most airlines have strategic strike alliances that have eventually
steered stiff competition to its non-members; also, with an
added advantage of operating in an environment where
competitors are under bankrupt protection, that creates unequal
grounds for competition. "The alliances pose threats to routes
within which they would fly"(Riwo-Abudho, 2013). However,
Southwest has not established any alliances; as a result, the
airline is under immense pressure and strain of maintaining its
position within the industry the airline industry while operating
a smaller fleet. Also, In 2018 Southwest freight transportation
was limited when comparing its total revenue to all the airlines;
its total revenue was $175 million, which was 0.8 percent of the
entire company’s revenue (Southwest Airlines Co. SWOT
Analysis, 2019).
Recommendation
Kumar et al. (2020) state that "high growth companies become
low growth all the time; many top managers know that it is an
evitable sign of business maturity." Therefore, at this point, a

company needs to stop looking for internal growth instead,
needs to shift its attention for acquisitions and mergers of
smaller companies and big companies. Southwest is a company
that has shown continual growth for decades. Also, the company
has managed to maintain its competitive advantage of low fares
as well. Therefore, the company needs to generate “organic
growth”; Southwest needs to innovate and implement new ideas.
The company needs to explore opportunities by taking
advantage of the dynamic global market. For example,
Southwest airlines could offer more inflight amenities (as a
choice with purchase option) to enjoy, especially during the
long, non-stop flights. Also, Southwest Airlines needs to strike
a strategic alliance with international airlines to explore more
opportunities beyond the US borders or nearby international
destinations and its freight fleet. The company will also benefit
from bankrupt protection in place (Kumar,2020). Inconclusion,
the market dynamics have changed to global; therefore, the
organization needs to develop a global mindset to have the
ability to contend with similar firms that are coming into the
market on a global scale. Hitt et al. (2014) state that it is
common for firms to differ in the amounts of resources
accumulated or rather the type of resources’ which increase the
competition within the market and a company’s competitive
advantage may not be guaranteed without innovating (Hitt et al.,
2014).
Reference
Barrett, S. D. (1994). Aviation and the Pursuit of
Contestability. Economic Affairs, 14(2), 11.
https://doi.org/10.1111/j.1468-0270.1994.tb00168.x
Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2014/01/01).

Kumar, R., & Kumar, A. (2020). Conceptualizing corporate
entrepreneurship capability and its linkages towards firm
performance. In Sustainable Business: Concepts,
Methodologies, Tools, and Applications (pp. 1771-1796). IGI
Global.
Richards, K. (1996). The effects of Southwest Airlines on US
airline markets.
Pidun, U. (2019). Corporate Capabilities. In Corporate
Strategy (pp. 33-53). Springer Gabler, Wiesbaden.

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