Zijin Wei
Southwest Airlines 2011
As one of the biggest airline companies in U.S, Southwest was successful in its low-cost operation model and the strategic development. However, the company’s future threats may also come from its strengths, also combined with its internal and external development. First, the signing of Airline Deregulation Act in 1978 made many other emerging carriers enter the industry. More competitors occupied the market to make benefits and attract performances by providing lower priced tickets than Southwest did to the customers, which increase the competition pressure to the company’s future development. Second, Southwest’s operating costs have been rising in recent years, especially on its employee salaries, the company has to provide higher salary for talents employment and higher cost for superior operating services, although the company keeps the low-priced ticket selling strategy, thus put the company in the dilemma between the low-profit status quo and the high-cost operating requirement. Third, the rising service demand from the customers makes it challenged for Southwest to follow their steps because Southwest takes the operational strategy of single airline model, which cannot satisfy the customers’ various flight demands as well as the upper service quality. The customer may look for better services from other airlines so that shrink the company’s performances.
Generally, I feel optimistic to the Southwest’s future development. The reasons are like the company is still the top one in the U.S airline industry, it has good reputation to stand firm in the market competition and perfect those weaknesses above. Also, Southwest highly focuses on its internal culture construction to make sure it always keeps an healthy working environment and multi-level communications, and the company develops a well-managed organizational