In this cutthroat competitive period, service organizations may survive by employing tactics based on people, processes, and physical evidence that distinguishes their services from competitors. The Southwest Airlines case study research focuses primarily on highlighting the primary techniques, tactics, and frameworks for achieving greater efficiency and performance in businesses through strategic decision-making ideas. In this study, the case study of Southwest Airlines, America's first low-cost airline, is investigated for analysis. The paper explains that if a service corporation prioritizes its employees over its customers, it will naturally serve consumers better because employees provide services. Employees' joy is customers' delight in the service sector.

Major network airlines were the sole providers of air transport in the United States at the start of the airline business. Because of "advanced customer segmentation, hub-and-spoke structures, and pricey information systems for bookings, fare wars, and severe rivalry," this multidimensional business was tough to enter into (Thompson 2008). Reduced airline ticket prices increased demand for air travel. Many markets were abandoned or ignored by large network airlines; this is a sector that a new "second tier of service providers" could enter.

Join Southwest Airlines, which saw this as an ideal chance for a short-haul, low-cost airline to enter the market. Southwest Airlines Co. was started in 1967 as Air Southwest Company by Rolling King and Herb Kelleher. Headquartered in Dallas, Texas, it began operations in 1971, under the current name, encompassing intrastate Texas cities Dallas, Houston, and San Antonio. Lamar Muse, the airline's new president, used the "love" motif to catch passengers' attention because the company was situated at Love Field in Dallas. The company offers low-cost, no-frills aviation transportation with frequent, primarily short-distance flights. Costs are kept low via the exclusive use of Boeing 737 aircraft, which allows for minimal maintenance costs and faster flight turnaround times, and an emphasis on ticketless travel. (CompaniesHistory.com, 2020)

Southwest became one of the first airlines to launch a website on March 16, 1995. iflyswa.com, formerly known as the "Southwest Airlines Home Gate," lets passengers browse schedules, a route map, and corporate information. Southwest.com bookings accounted for 70% of all flight bookings and 73% of all revenue in 2006 (CompaniesHistory.com, 2020). Southwest underwent considerable restructuring in the early twenty-first century due to mounting financial difficulties in a faltering airline sector. This includes the appointment of a new president (2001), Colleen Barrett, the first female president of a major airline; new initiatives such as self-service check-in kiosks (2002) and online boarding passes (2004); and cost-cutting measures such as flight reductions and employee buyouts. (Rains, 2021)

Southwest is a publicly traded firm that trades on the New York Stock Exchange under the well-known ticker symbol "LUV". When the coronavirus pandemic struck in 2020, Southwest's 47-year profit run ended. Southwest is now the largest domestic carrier in the United States, and it continues to offer inexpensive tickets to its consumers. (Singh & Jay Singh, 2020) As of 2019, it employed 60,000 people and operated over 4,000 flights per day during peak travel seasons. The firm has a fleet of 747 Boeing 737 planes that serve 103 locations in the United States and ten other countries. When the coronavirus pandemic struck in 2020, Southwest's 47-year profit run came to an end. (Southwest Airlines, n.d.)

The Situation Analysis is a group of methods that significantly examine the internal and outside situations affecting an organization, that can help utilizers understand its skills, customers, and enterprise surroundings. The Situation analysis is very useful in growing a marketing strategy and helps the event the welfare of your commercial enterprise.

The industry- Porter’s five forces analysis (Ruchi)

Porter’s five forces analysis, named after professor, Michael E. Porter, is a strategy model that is commonly used by many firms today to analyze their current strength, competition in the market in order to determine a strategy. This model helps identify and analyze the five competitive forces that share the industry as well as lets us determine the industry’s weaknesses and strengths (Scott, 2020). Porter’s five forces analysis can be applied to any segment of the economy to determine the level of competition in the market (Scott, 2020). Porter’s five forces are bargaining power of suppliers, threat of new entrants, rivalry among existing competitors, bargaining power of competitors, and threat of substitutes.

Now let’s review how Southwest Airlines Company can gain competitive advantage in the Airlines industry. Starting with bargaining power of suppliers, all companies that operate in the Airlines industry buy their raw materials from various suppliers, however, there are only a limited number of suppliers in the airlines industry with the top two being Boeing and Airbus. Given this fact, suppliers hold the dominant position and can decrease the margins of Southwest Airlines Company if need be. Many powerful suppliers also use their negotiating power to get higher prices from the companies in the industry, especially during the pandemic when the Airlines industry took the biggest hit like some of the other industries. Therefore, we can conclude that the overall bargaining power of suppliers in the Airline industry is higher thereby, lowering the overall profitability of Airline companies (Fern Fort University, n.d.). Southwest Airlines Company can however tackle the bargaining power of the suppliers by building an efficient supply chain and shifting to other manufacturers in case the prices of the raw materials go up.

Threat of new entrants in the Airlines industry is moderate, new entrants bring new strategies and innovation which in turn puts pressure on Airline companies to lower their pricing strategy or provide new value to the customers to gain competitive advantage so Southwest Airlines Company needs to be innovative and provide unique products and services to customers, new products attract new customers and gives old customers another reason to continue to be loyal to Southwest Airlines Company (Fern Fort University, n.d.).

The Airlines industry is a very competitive industry, so it goes without saying that Southwest Airlines Company has a high rivalry among existing competitors, some of Southwest’s existing competitors are Delta Airlines, American Airlines, and United Airlines, these companies have a strong and loyal customer base. To gain competitive advantage in the industry, Southwest Airlines Company needs to build a sustainable differentiation and collaborate with some of its competitors to increase their market size instead of competing in a smaller market (Fern Fort University, n.d.).

In the Airlines industry, buyers have higher demands, we as customers want the best offers available at a minimum price possible which puts a lot of pressure on the Southwest Airlines Company’s profitability in the long run (Fern Fort University, n.d.). If the customer base is smaller, then the bargaining power of the buyers is higher and so is their ability to see increasing discounts (Fern Fort University, n.d.). A good strategy for Southwest here would be to build and increase their customer base thereby reducing the bargaining power of buyers and providing an opportunity to the company to streamline its sales.

Industry profitability suffers when new products or services are introduced in the market that meet customer needs and since the Airline industry is ever evolving wherein different airline companies come up with new services and attractive offers for the customers, the threat of substitute product or service is high. Some strategies Southwest Airlines Company can use here are to be service oriented instead of just product oriented, they can also increase the switching cost for customers (Fern Fort University, n.d.).

Analysis

Political (P):

The political elements that can affect the profitability or chances of survival of the corporation are quite diverse. The political dangers vary from sudden changes in existing political regimes to civil unrest to important choices taken through the authorities. In cases of viable multinationals, one may additionally include political elements that take area/effect no longer only the host us of a but also all international locations that comprise commercial enterprise operations, or which can interact in alternate with. The US-China exchange conflict is one of the major political elements that has negatively impacted the increase of airline corporations. The implementation of change price lists, in addition, increased pressure on the airline income with a decline within the growth of the shipment businesses.

The authorities have installed some strict policies and tips for the operation of an airline which can ensure the maximum safety of the passengers. For international flights, the guidelines are strict, and this example might also lead an airline to push for greater services to maintain up with the competition.

Economical (E):

Economic elements are all those that pertain to the financial system of the us of a that, which include changes inside the inflation rate, the foreign exchange fee, the interest price, the gross domestic product, and the contemporary stage of the monetary cycle. These elements, and their ensuing effect on mixture demand, mixture funding, and the business weather, in well known, have the capacity to make an enterprise exceedingly profitable, or extremely probably to incur a loss. The exchange charge of the USA operates in would affect the profitability of, if engages in international change. The balance of the currency is also essential- a volatile foreign money discourages international investors. Due to the pandemic, many countries have suspended flights from different international locations. It has affected the airline industry to a positive stage. At the identical time, the financial condition of all the international locations has skilled a few melancholies that can affect the airline industry as well.

The important component this is affecting the boom of the airline enterprise in the United States is rising gas fees. The US Jet gas costs additionally reached $1.67 a gallon which is predicted to increase the general fee of airline operations.

Social factors (S):

The social factors that effect is an instantaneous reflection of the society that operates in, and encompasses the culture, perception, attitudes, and values that most people of the populace may preserve as a network. The effect of social elements isn't always handiest critical for the operational aspect, however also at the advertising issue of the enterprise. A thorough information of the clients, their lifestyle, stage of schooling, and beliefs in a society, or phase of society, would assist design both the products and advertising and marketing messages that would result in a project becoming a success.

The propensity to travel is highest the various millennial group of people elderly 23 to 38 years as millennial people travel greater often than another institution of individuals. The demand for travel had been negatively impacted during COVID-19 because of the rise within the danger of the spread of contamination amongst individuals. Despite this, the airline sector is still expected to grow at a faster fee within the post-COVID duration because of adjustments in customer conduct and an increase in character goal to visit amusement trips.

Technological (T):

Technology can unexpectedly dismantle the rate shape and competitive panorama of an industry in a completely brief quantity of time. It as a result will become extraordinarily vital to innovate constantly and always, not only for the sake of maximizing feasible earnings and turning into a marketplace chief, however, also to save you obsolescence within the near future.

Technological factors play an important role in the growth of the aviation industry as technological up-gradation enables to make certain purchaser protection, comfort, and extended aggressive role of the airline groups. Despite the gas-green Technologies, digitalization and safer flight era additionally help airline companies to achieve a surprisingly aggressive environment. As a result of this, the airline industry is running on recreation-changing improvements to improve customer support reports. Moreover, diverse airline groups also are selling the use of Robotics to enhance automation within the aviation enterprise and to make certain punctuality of offerings for the passengers. Not simply this, diverse different technology along with virtual truth, AI, self-driving wheelchairs, etc. Are used to further sell automation and to ensure a better customer support revel in. Southwest Airlines is likewise building up an innovation lab in Dallas to further provide education to the employees and to enhance innovation in its operations.

Environment (E):

Different industries preserve special requirements of environmental safety in their head because the norm. This norm then dictates what every employer must goal for, in the least, to prevent becoming the target of strain corporations and boycotts due to a lack of environmental conscientiousness. The vast environmental aspect that has been a concern for environmentalists is its CFC emission. It has been a worry for the airline businesses and the authorities at the same time. Here are a few ecological issues that can doubtlessly influence the airline industry:

The airlines need to enhance their structures and flights to decrease harmful emissions. Otherwise, this could be a massive difficulty inside the destiny. They can calculate the carbon footprint for being accountable to the environment.

Legal factors (L):

The felony problems may not have lots to do directly with the growth of airline corporations, not directly, it could significantly affect their enterprise. PESTEL analysis airline enterprise can display how prison troubles can affect their commercial enterprise: Most nations have some regulations concerning the carrier. The rules help to shield the environment and to make certain the safety of the passengers. The airline businesses ought to be aware of them and abide by way of those guidelines to avoid criminal proceedings.

SWOT Analysis

A SWOT analysis is a strategic making plans method that allows a commercial enterprise to understand itself higher and make plans to go in a forward direction. Based on the SWOT evaluation, smarter goals and selections can be finished.

Strengths and Weaknesses are internal elements (matters that can be managed) that exist within any company, consisting of Southwest Airlines. Examples of internal elements could be the price range, manufacturing abilities, and management competencies.

Opportunities and Threats are outside environmental elements (that can't be managed) that have an effect on any company. Examples are gasoline fees, new legislation, technological adjustments, and adjustments in the marketplace that have an effect on your organization.

Strength:

· Southwest Airlines paintings on an efficient, lowest running fee structure inside the home airline industry. It is one of the largest U.S. Airlines alongside American Airlines, Delta, and United. Southwest Airlines is the simplest one which can compete on fee. They enforce a point-to-point direction in place of non-stop hubbing and flies most effective one form of aircraft.

· Behind the achievement of Southwest Airlines is its crew of pleasant and encouraged employees. Even in the course of the pandemic in 2020, while several airlines have been positioned out of commercial enterprise, Southwest Airlines survived without essential layoffs. It has an organizational lifestyle for employee properly-being that includes appreciation, recognition, and birthday celebration. In the second area of 2021, Southwest Airlines changed into capable of accrue $85 million of earnings-sharing for their personnel, amounting to $109 million (Southwest Airlines, 2021).

· Airlines are encouraged by way of intense lobbying, and the dominant one’s benefit plenty. By being a dominant participant inside the market share, an airline can leverage its sources, superiority, and connections to lobby a hit adoption of laws that want its agenda. Southwest airlines have a US domestic marketplace percentage of 16.8%, making it rank 0.33. The first and 2d are the American and Delta airways with 17.6% and 17.5%, respectively.

· Southwest exclusively flies the Boeing 737. The single aircraft coverage simplifies the operation of the fleet and education of the body of workers. This decision reduces operational prices and improves performance.

Weakness:

· Southwest Airlines has attracted extra clients than its competitors by using decreasing expenses. But it has to attention on improving gasoline efficiency and different areas wherein it may reduce costs. In 2020, the working costs of the organization grew compared to 2019. This airline can improve its income margin by cutting costs and getting sufficient assets needed to diversify or enhance operations.

· Most of Southwest Airlines’ competition have hooked up commercial relationships. These relationships improve them for the reason that they offer extra destinations to their consumers than Southwest Airlines. By searching out extra industrial alliances, the airline can extend its destination community, in order to set it up to further increase.

· Southwest airlines were the usage of Boeing 737s seeing that its inception. In March 2019, the Federal Aviation Administration issued an emergency to ground all Boeing Max aircraft after two deadly injuries. Out of its 750 Boeing planes, Southwest has 31. This led to fewer running planes and, in go back, lost sales. This highlights how wrong it is to rely on handiest one plane model. It makes the airline much less flexible whenever any important flaw is being discovered or this sort of version gets an awful popularity. This could bring about horrific publicity and highly priced challenge for the airline each time one of these scenario arises.

· Boeing is the leading agency presenting Southwest Airlines with spare components. With such preparations, there is always an impending danger of deliver chain bottlenecks. It is essential to diversify the deliver chain in order that any difficulty affecting Boeing can't be cascaded to Southwest Airlines. The long delays in restoring the fleet of Boeing Max highlight the trouble of Southwest’s total reliance on Boeing.

Opportunities:

· The creation of e-trade has fueled globalization. An increase in e-commerce organizations leads to a upward thrust in worldwide freight companies too. In the following 5 years, the worldwide freight business is anticipated to grow at a CAGR of 7%. Southwest Airlines need to take advantage of this boom inside the enterprise and increase its freight commercial enterprise.

· A whilst lower back, Southwest Airlines improved its neighborhood flights to Hawaii. The stepped forward economic situation and globalization must activate the airline to increase in addition when you consider that air travel will increase in emerging economies. South America has an unsaturated marketplace, that is a terrific steppingstone for the global enlargement of Southwest Airlines.

· Millennials are taking on activity possibilities, and most of them stay in addition from domestic than preceding generations. This leads to a demand for lengthier flights. To make the most its growing demand, Southwest Airlines can increase from quick hauls to long flights.

· In the aggressive landscape, Southwest Advantage is inferior in phrases of the wide variety of routes being provided. Launching extra routes will add revenue and amplify the team of workers in special places. They need to be adding nonstop flights to a lot of extra locations.

Threats:

· Lockdowns and social distancing are the brand-new norms, and only some international locations have lifted the tour ban. Most people do business from home and perform business meetings online. The effects of the pandemic will be excessive and long-lasting. Even after huge vaccine availability, people nevertheless feel cautious of visiting through the air. The recuperation has been forecasted to occur from overdue 2021 to 2022.

· The aviation enterprise has been significantly stricken by the global fitness crisis, but it’s slowly getting again on its ft. Because of this, the competition of some of the airways has extended with anyone supplying new routes, growing amenities, and reducing fares. According to Reuters, the Biden administration will award 16 slots for flights at Newark International Airport in New Jersey to a yet-to-be-decided low-fee provider. This is anticipated to trigger opposition in most of the airways.

· It is one of the essential threats for Southwest Airlines because it's miles a low-price airline where the fee is a greater essential aspect on which choice has been made. If the competitor could make an increase in rate to a small quantity, it might not get observed but the same fee if elevated by way of Southwest Airline will without delay come to observe.

In 2012 Southwest Airlines was considered on the ten safest airlines in the world. Southwest Airlines is to this day one of the low-cost carriers in the world, the airlines have destinations in 121 locations and 10 other countries (Knaviation.net). One of the biggest issues with Southwest airlines is engine failures, in 2018 when debris from one of the engines broke through a passenger window, of the 144 passengers and 5 crew members, 1 passenger received fatal injuries and 8 passengers received minor injuries. Investigators confirmed that it is an engine housing failure. According to the US National Transportation Safety Board, they found evidence of metal fatigue where a fan blade had broken off (NTSB), the engines are produced by three different manufacturers. NTSB Issued 7 safety recommendations based on findings from Southwest Airlines Flight Investigation. A similar incident was recorded in 2016 involving a Southwest flight that landed safely in Florida. In total, Southwest has had 9 accidents since 1967.

The next major issue is that the company is currently dependent on Boeing as the sole manufacturer of the company’s aircraft (Southwest, Form 10-k). Prolonged delays in completing customer service or further regulatory actions by the FAA could affect the company's business plans and results of operations. Recently Southwest airlines canceled 24% of scheduled flights due to technical problems and supplier issues (nytimes.com). The main reasons for flight get canceled would be due to bad weather, security, mechanical issues, and lack of aircraft. The Boeing 737 MAX aircraft are crucial to the company’s growth, Boeing no longer manufactures versions of the 737 other than the 737 MAX family of aircraft (Southwest, Form 10-k). If the 737 MAX aircraft were to again become unavailable for the company’s flight operation, it would be restricted until it procure and operate other types of aircraft from Boeing or other manufacturers.

The alternative to the above issues is collaboration with its main partner Boeing. The management of Southwest Airlines could collaborate with Boeing to have

A strategic plan typically refers to a document that is usually used to communicate the firm's enterprise goals and objectives. It is also used to display the necessary actions that are needed for those goals and objectives to be achieved and all the other vital elements that are brought about during the planning activity. Upon analyzing the case study for the Southwest Airlines Company (LUV), this section focuses on the strategic plan based on the problem identified in the above quote for the company (Ren, 2020). This section entails the development of a 5-year strategic plan for the airline's company, which comprises various aspects such as the company's vision, mission, core values, objectives, corresponding strategies, implementation plan, and the significant performance indicators for progress monitoring.

Mission, Vision, and Core Values

An organization’s mission statement is also concerned with the firm’s reputation and concern for the employees. For our case on the Southwest Airlines Company, the company generally appears to be focused on providing a non-negative comprehensive experience. The firm highlights its mission statement clearly for its workforce to illustrate the goal of developing a particular environment as follows (Airlines, 2018): “commitment to provide the highest possible quality of service to the customers, which should be delivered warmly, and with some sense of affection, individual gratification, and enterprise spirit”. Southwest Airlines Company also states the mission to their workforce as: "We are dedicated to ensuring that our workforce have a solid operating environment with indistinguishable chances to learn and have personal growth. The employees are encouraged to be creative and innovative for the effectiveness of Southwest Airlines to be improved. In addition, the company will provide the same concern and a caring attitude to all the employees within the firm so that they can have the capability of sharing externally with every Southwest client" (Ren, 2020).

The company generally has a very understandable vision: "to become the global most famous, effective, and most-streamed airline". In addition to Southwest Airlines Company's mission and vision sta