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C S S A: ASE Tudy On Outhwest Irline
C S S A: ASE Tudy On Outhwest Irline
Table of Content
REFERENCES
REFERENCES
1. CASE ABSTRACT
Conclusion
Directional vector coordinates: X-axis -1.4 + 5.0 = 3.6
Y-axis 2.6 + (-3.0) = -1.4
Therefore, the Southwest Airline should pursue Competitive Strategy
FS
+6
Conservative Aggressive
CA IS
-6 +6
(3.6,-1.4)
Defensive Competitive
-6
ES
The directional vector locates in the competitive quadrant of the SPACE Matrix, indicating
competitive strategies. So Southwest should take backward, forward, and horizontal integration;
market penetration; market development; product development; and joint venture.
Quadrant II Quadrant I
1. Market development 1. Market development
2. Market penetration 2. Market penetration Southwest
3. Product development 3. Product development
4. Horizontal integration 4. Forward integration
5. Divesture 5. Backward integration
6. Liquidation 6. Horizontal integration
7. Concentric diversification
Weak Strong
Competitive Competitive
Position Position
Quadrant III Quadrant IV
1. Retrenchment 1. Horizontal integration
2. Concentric diversification 2. Concentric diversification
3. Conglomerate 3. Conglomerate
diversification diversification
4. Horizontal integration 4. Joint ventures
5. Divesture
6. Liquidation
2.0
1.0
2.0 3.0 4.0 IFE total weighted score
As the matrix, Southwest is in cell VI that suggests the hold and maintains strategy. In this
case, Southwest’s tactical strategies should focus on market penetration and product
development.
Expand into
more cities such Add 12 B17s to
Weight as Atlanta, New Fleet
Key External Factors (KEF)
0.0 to 1.0 York
AS TAS AS TAS
Opportunities
1. More than 100 new cities have encouraged
0.04 4 0.16 2 0.08
Southwest to offer flight service (2003)
Doing calculation in the QPSM, we conclusion that market penetration strategy: Expand
into more cities that are currently without a SW airline flight (such as Atlanta, New York) is a
better option. This is given by the Sum Total Attractiveness Score figure. The market penetration
strategy yields higher score than the product development strategy: Add 12 B17s to Fleet. The
market penetration strategy has a score of 2.92 in the QSPM shown above whereas the Add 12
B17s to Fleet strategy has a smaller score of 2.38.
EPS
0.7
0.6
0.5
0.4 Series1
Series2
0.3 Series3
0.2
0.1
0 EBIT
0 200 400 600 800 1000
1
839.5 = 770 + (500/7.2)