Homework Question on Strategic Management
- List two opportunities from the external environment (PESTEL) with the potential for a significant impact on Southwest Airlines during the next few years. Explain why.
- List two of the threats from the external environment (PESTEL) most likely to impact Southwest Airlines during the next few years. Explain why.
- How competitive is the airline industry today? Explain your answer using Porter’s 5 forces.
- List aninternal strategic capability of Southwest Airlines that meet the VRIN criteria or a core competency that provides a current strategic advantage.
- How has the history and culture of Southwest impacting the airline today? Is Southwest an example of “strategic drift”? Explain your answer.
Homework Answer on Strategic Management
Technological developments will create opportunities suitable for the expansion of Southwest Airlines. For instance, communication systems will provide customers with rich information on the changing trends in the transportation sector, hence planning to meet travelling costs. Moreover, technological tools will supplement e-commerce by supporting ticketless travel. This means that the company will reach a vast population at minimum costs while maintaining high-quality services.
The repeal of Wright Amendment means that the Southwest Airlines will be open to fly nonstop and provide necessary services in the United States and outside the country. Licensed by Federal Aviation Administration (FAA), the airlines will boost its competitive advantage over the rival companies.
The availability of information technology tools will increase the bargaining power of the customers. Before receiving airline services, customers will use the technology to determine the carriers that will offer the best value for their money. This price based preference is likely to improve the bargaining of customers.
Like any other airline industry, Southwest Airlines are severely affected by an increase in fuel cost. In the process, the company suffers to meet the projected profits. While there is persistence in this issue, many long distance travelers will shift to cars, trains, and ferries to pay less than air transport. The availability of these alternatives will remain a big threat to Southwest Airlines.