Southwest Airlines Co.

’s Mission Statement & Vision Statement (An

Analysis)
UPDATED ONUPDATED ON MAY 30, 2019 BY LEONARD EVANS

A Southwest aircraft taxiing at the Ronald

Reagan Washington National Airport. Southwest Airlines Co.’s corporate mission statement and
corporate vision statement present strategic aims for leadership in the global civil aviation
market. (Photo: Public Domain)

Southwest Airlines Co.’s industry position as the leading low-cost commercial aviation
company is a result of following a mission statement and a vision statement that aim for
the dominant competitive position in the global industry. The enterprise has a history of
expansion where cost minimization is a core factor in airline operations management.
Southwest’s corporate mission represents business strategic objectives that aim for
leadership in terms of customer experience and relations, as well as the company’s
approach to human resource management. These factors have significant implications
on the corporation’s marketing strategies, regarding how the business presents itself as
a practical alternative to other major airlines. On the other hand, Southwest’s corporate
vision focuses on international leadership, revealing strategic planning for further
expansion of operations. The vision statement and mission statement are primary
guiding principles that shape Southwest’s strategies to grow and explore new
opportunities in the global commercial aviation market.

Southwest’s corporate vision applies the strategic goals of the company’s corporate
mission onto long-term business operations and strategic management. Fulfilling the
mission statement and vision statement requires strategies to overcome the competitive
effects of other major airlines, such as American Airlines, Delta Air Lines, and United
Airlines. The mission statement and vision statement indicate successful competitive
positioning attributable to the business strengths and competencies shown in the SWOT
analysis of Southwest Airlines Co., which involves low costs as a major strategic factor
supporting business competitive advantages.

Southwest’s Mission Statement

 Pertaining to its corporate mission for its commercial aviation and related services,
Southwest Airlines states, “The mission of Southwest Airlines is dedication to the
highest quality of Customer Service delivered with a sense of warmth,
friendliness, individual pride, and Company Spirit.” This corporate mission
statement is a reflection of the company’s approach to customer relations as well as its
branding relative to other airline companies. The following are the main points of
Southwest’s mission statement:

1. Highest quality of aviation customer service

2. Employees’ warmth, friendliness, individual pride, and company spirit

Southwest Airlines’s mission statement emphasizes customer service linked to

employee behavior and corporate image. The first point, involving high quality customer
service, indicates the company’s strategic objectives for high standards of operations
that relate to customer service, such as customer support and marketing
communications for the commercial aviation market. Thus, the corporate mission
statement focuses on customer experience as a variable in evaluating business
performance, operational effectiveness, and strategies, such as the strategies used in
Southwest’s marketing mix or 4Ps. The company’s mission statement also highlights
the importance of desirable behaviors as factors that attract passengers. Considering
these factors’ link to human resource management, Southwest Airlines Co.’s
organizational culture is a major determinant in fulfilling the company’s mission
statement.

Southwest’s Vision Statement

Southwest Airlines’s corporate vision is “to become the world’s most loved, most
flown, and most profitable airline.” This corporate vision statement reflects the
company’s long-term strategic plans for global operations, and guides strategic
decisions in growing the enterprise, especially beyond its current main market in the
United States. The following points are notable in Southwest’s vision statement:

1. Global scale of airline operations

2. Best commercial aviation brand image
3. Highest popularity among passengers
4. Highest profitability in the airline industry

Southwest’s corporate vision depicts the company’s leadership in the global industry.
The term, “world’s,” indicates the corporation’s plans to expand its airline operations
internationally. To achieve a dominant global competitive position indicated in the vision
statement, Southwest Airlines Co.’s organizational structure must provide the necessary
flexibility for expansion. In addition, the company’s corporate vision statement includes
a strategic target to become the “most loved,” presenting enterprise plans to achieve the
strongest civil aviation brand in the world. The vision statement indicates that this
industry leadership comes with Southwest’s top popularity and top profitability targets.
Such strategic objectives require multinational expansion, which is a business growth
opportunity, considering the company’s dependence largely on the U.S. commercial
aviation market. Based on these points in the corporate vision statement, Southwest’s
generic strategy for competitive advantage and intensive growth strategies determine
how such global growth is achieved, involving strategies for new operations and for
competing against other major firms in local and regional markets.

Summary & Recommendations – Southwest Airlines’s Corporate

Mission & Corporate Vision

Corporate Mission Statement. Southwest Airlines Co. prioritizes customer service in

its mission statement, along with employee behavioral factors related to the company’s
organizational culture. The corporate mission aims for the best customer service.
Achieving this kind of leadership emphasized in the mission statement depends on
competition, which can be assessed through a Five Forces analysis of Southwest
Airlines Co. The company’s strategies impact this long-term goal in the global aviation
industry. Southwest Airlines’s operations management strategies determine customer
satisfaction, considering that operational effectiveness and efficiencies affect the speed
and convenience that customers experience. Based on conventions on writing business
mission statements, the company’s corporate mission statement is not satisfactory
because it does not specify the nature of the business as a provider of air travel
services. Southwest’s mission statement fails to include other details, such as the
activities or approaches that the company uses or plans to use to achieve the top
industry position for quality of customer service. Additional information that can enhance
the mission statement includes the kinds of customers that the company targets, such
as passengers in certain categories. Considering these issues, it is recommended that
Southwest Airlines improve its corporate mission statement by including such additional
information to make the statement more specific to civil aviation operations and related
global strategic targets.

Corporate Vision Statement. Southwest specifies strategic objectives to become a

global industry leader. For example, the company’s vision statement points to highest
profitability compared to major airlines like United and Delta. Such global industry
leadership must address opportunities and threats, such as those identifiable through a
PESTEL/PESTLE analysis of Southwest Airlines Co. Considering its corporate vision
statement, the company needs competitive advantages to prevent other airlines from
exploiting the same opportunities in the global air transportation market. Furthermore, to
achieve the “most loved” objective in the corporate vision statement, Southwest Airlines
Co.’s corporate social responsibility strategies must secure a positive brand image.
Based on conventions on writing business vision statements, the company’s corporate
vision is satisfactory because it contains specific long-term targets and criteria such as
“most loved,” “most flown,” and “most profitable” in the global airline industry.
Southwest’s corporate vision statement is detailed enough to guide strategies and to
inspire employees to make the enterprise the best in the industry. However, considering
possible improvements in the vision statement, it is recommended that the company
add details about how it plans to achieve such leadership, such as, possibly, through
cutting-edge technology, business process changes, and other factors relevant to the
airline industry.

Southwest Airlines Generic Strategy, Intensive Growth Strategies &

Competitive Advantage
UPDATED ONUPDATED ON MAY 30, 2019 BY LEONARD EVANS

A Southwest aircraft arriving with military

personnel at Terre Haute Regional Airport in Indiana in 2007. Southwest Airlines Co.’s generic
strategy for competitive advantage and intensive strategies for growth are aimed at optimizing
profits and market share based on low costs and low fares. (Photo: Public Domain)

Southwest Airlines Co.’s generic strategy for competitive advantage (Porter’s model)
ensures product/service attractiveness for successfully implementing intensive
strategies for growth (Ansoff Matrix). With a strategic position as one of the main
competitors in the commercial aviation industry in the United States, the company is
popular for its low fares and high accessibility. These variables directly relate to
Southwest’s intensive growth strategies and generic strategy. In Michael E. Porter’s
model, competitive advantage is developed through a number of generic strategies that
the airline company can apply. On the other hand, in Igor Ansoff’s matrix, a firm like
Southwest Airlines can use various intensive growth strategies. These corporate
strategy frameworks are considered in this business analysis of the commercial aviation
company and its approach to growing despite strong competitors. Southwest Airlines’s
success indicates effective implementation of a generic strategy for competitive
advantage and intensive growth strategies suited to the business.

Southwest Airlines uses its generic competitive strategy to counteract the competitive
power of other firms, such as Delta Air Lines, United Airlines, and American Airlines.
These competing commercial aviation companies possess resources and the operating
scale to grow despite the competitive landscape. Southwest Airlines Co.’s intensive
growth strategies facilitate the operational scale needed to maintain the corporation’s
generic strategy, thereby also strengthening its competitive advantage and competitive
positioning in the industry.

Southwest’s Generic Strategy for Competitive Advantage (Porter’s

Model)
Southwest Airlines Co.’s generic strategy is cost leadership, which creates competitive
advantage based on low costs and correspondingly low prices. To address competition,
the company’s strategic objective in this generic strategy is to minimize operating costs,
optimize profit margins, keep low prices, and offer its airline services to the mass
market. The large-scale operations linked to this generic strategy for competitive
advantage supports the fulfillment of Southwest Airlines Co.’s mission statement and
vision statement, which aim for global leadership in the industry. The commercial
aviation corporation’s success depends on effectiveness in implementing the cost
leadership generic competitive strategy.

The cost leadership generic strategy is observable in Southwest Airlines and its service
offerings as a low-cost carrier. For example, the company’s advertising campaigns
frequently emphasize low fares as a selling point, in contrast to other firms that use the
focus strategy or the differentiation strategy, such as Delta Air Lines. In a way,
Southwest Airlines has a best-cost provider strategy, as the company continues to
minimize costs while also maintaining a high level of customer satisfaction through
service quality. Based on its generic strategy, the enterprise presents itself as a major
commercial aviation contender not just in terms of prices, but also in terms of warmth
and friendliness in its customer service.

Southwest’s Intensive Strategies for Growth (Ansoff Matrix)

Market Penetration. In line with its generic strategy, Southwest Airlines applies market
penetration as its primary intensive growth strategy. The company’s strategic objective
in this intensive strategy is to grow its business revenues by providing more of its
current air transportation services to more passengers in markets where it currently has
operations. Southwest’s cost leadership generic strategy ensures low costs, which
translates to across-the-board low prices that are a competitive advantage for keeping a
large share of the commercial aviation market, in support of the market penetration
intensive growth strategy. The price sensitivity of customers in the transportation sector
is one of the factors that make cost leadership and market penetration effective
strategies in this case. Business strengths and competitive advantages, identifiable in
a SWOT analysis of Southwest Airlines Co., help attract customers and support the
success of market penetration. A strong airline brand and attractive prices enable this
intensive growth strategy. Also, Southwest Airlines Co.’s marketing mix (4P) determines
how the company penetrates the target market.

Product Development. Product development is a minor intensive growth strategy in

Southwest’s organizational development. The corporation focuses mainly on its cost
leadership generic strategy for competitive advantage, and the corresponding market
penetration intensive strategy for airline business growth. Southwest’s product evolution
has already stabilized, which means that the business has been aiming its product
development efforts mostly at enhancing its current offerings. Thus, product
development, as an intensive growth strategy, has minimal contribution to growing the
airline company. It is notable that changes in current products require corresponding
changes in Southwest Airlines Co.’s operations management strategies and tactics. The
company’s operations management is a manifestation of the applied intensive growth
strategies and generic strategy for competitive advantage in commercial aviation. The
corporate culture of Southwest Airlines Co. is a factor integrated into product
development, as the company relies on organizational cultural variables to optimize its
service quality and corresponding customer satisfaction and loyalty.

Market Development. The growth of Southwest Airlines minimally depends on market

development. This intensive growth strategy aims to offer current services to new
commercial aviation markets. When applying market development, the cost leadership
generic strategy ensures competitive advantage for new civil aviation markets.
However, Southwest continues to focus on its limited multinational operations in the
United States and a few other countries. Thus, the market development intensive
growth strategy is not significant in growing the airline business.

Diversification. Diversification is currently an insignificant intensive strategy in

Southwest Airlines Co.’s business growth. The objective of this intensive strategy is to
grow the company through new operations, such as service businesses related to air
travel operations. Southwest focuses on growing within its current markets, with minimal
emphasis on using its cost leadership generic strategy for competitive advantage in
diversifying its business. Thus, diversification is an insignificant intensive growth
strategy in the airline business. It is notable that the addition or expansion of business
operations requires accompanying changes in Southwest Airlines Co.’s corporate
structure.

Conclusion – Southwest’s Generic Competitive Strategy & Intensive

Growth Strategies

Southwest Airlines applies the cost leadership generic strategy for competitive
advantage, along with intensive growth strategies to maximize market share and move
toward its long-term goal and strategic plan of becoming a global industry leader. The
market penetration intensive strategy provides support for the airline company’s cost
leadership generic strategy, and vice versa. Southwest’s brand image and service
quality reflect these strategies and associated competitive advantages. For example,
customers know the company for low airfares, which are a consequence of the cost
leadership generic strategy that leads to cost-based and price-based competitive
advantage. In relation, Southwest is known for its large-scale operations, which are a
result of the market penetration intensive growth strategy.

Southwest Airlines Co.’s Organizational Structure & Its

Characteristics (An Analysis)
UPDATED ONUPDATED ON MAY 30, 2019 BY MIRANDA SHERMAN
 A Southwest aircraft at San Francisco
International Airport in 2010. Southwest Airlines Co.’s corporate organizational structure reflects
an organizational design that emphasizes strong managerial control on all areas of operations.
(Photo: Public Domain)

Southwest Airlines Co.’s organizational structure promotes centralized decision-making

processes. As a major low-cost carrier with international operations, the company has
an organizational design representative of a business configuration that enables strong
corporate headquarters in controlling all areas of operations. In this structural system,
Southwest possesses a rigid hierarchy that addresses strategic management concerns.
The corporate structure facilitates the administration of the aviation company’s
resources, including human resources. In its organizational development, starting as a
local carrier in Texas and now an international low-cost airline business, Southwest has
largely maintained its organizational design and its organizational structure’s
characteristics. It is apparent that the company finds its corporate structure ideally
applicable to its operations in the transportation sector. Its profitable performance and
large operational scale indicate that Southwest Airlines benefits from its organizational
structure’s implementation to address business needs and strategic challenges in the
international commercial aviation industry.

Business strengths, core competencies, and competitive advantages shown in

the SWOT analysis of Southwest Airlines Co. are partly a result of human resources
and strategic support from the corporation’s organizational structure. In a way, the
company uses its corporate structure as a tool to manage operations while competing
against firms like American Airlines, Delta Air Lines, and United Airlines. Structural
characteristics also facilitate strategic planning and implementation to address trends in
the industry, such as those identifiable through a PESTEL/PESTLE analysis of
Southwest Airlines Co.

Southwest’s Organizational Structure Type and Characteristics

Southwest Airlines has a U-form organizational structure. The unitary or U-form

structure is also known as the functional form because of the use of business function
as basis for grouping resources and activities, such as finance and airline marketing in
this case. This corporate structure is typical in businesses that seek to maintain strong
 central control on all operations via top-level strategic management at the organizational
headquarters. The following are the main features of Southwest’s corporate structure:

1. Groups based on business functions specific to commercial aviation

2. Centralized hierarchy

Groups Based On Business Functions. In its U-form corporate structure, Southwest

Airlines groups business activities and resources according to business functions. For
example, the company has a functional group for finance and another functional group
for daily operations in commercial aviation. Aside from these main function-based
groups, Southwest’s organizational structure involves subgroups that report to one or
more executives. For instance, the Vice President of each of Ground Operations, Inflight
Operations, and Maintenance Operations reports to the Executive Vice President for
Daily Operations. This characteristic of the corporate structure ensures that Southwest
Airlines maintains effective business functions that are arranged in a way that
strategically supports the entire organization. An implication of this organizational
structural characteristic is the possible creation of new functional groups whenever a
new product/service or business area is developed, such as the creation of new
international flight routes or new complementary operations in the aviation industry.

Centralized Hierarchy. A major characteristic of the U-form organizational structure is

a centralized hierarchy, which in this case defines Southwest’s system or arrangement
of resource and activity groups and how they relate to each other. For example, at the
organizational headquarters, senior executives make the decisions that are relayed and
implemented throughout the commercial aviation operations. The corporate structure’s
relaying and corresponding lines of authority are vertical (top-down), starting from
Southwest’s CEO, down to the rank-and-file employees in daily operations. Thus, the
aviation company’s organizational chart represents the CEO and other senior
executives at the top of a pyramidal structure, with the bottom groups representing the
frontline employees. Centralization ensures the fulfillment of Southwest Airlines Co.’s
corporate vision and mission statements in terms of executive control and direction of
the enterprise toward strategic goals and objectives. This organizational structural
characteristic ensures centralized control on all airline operations. Also, this type of
corporate structure aggregates expenditure and minimizes redundancies, thereby
contributing to the effectiveness of Southwest Airlines Co.’s generic strategy and
intensive growth strategies in using low costs as the main basis for penetrating current
markets.

Southwest’s Corporate Structure’s Advantages & Disadvantages

Advantages. An advantage of Southwest Airlines Co.’s organizational structure is the

strong control that corporate executives have on operations. Control is achieved
through the hierarchy and functional groupings that correspond to the different areas of
the airline business. Another structural advantage is the redundancy minimization in
Southwest’s operations through aggregation of activities and resources based on
similarities in business function and strategic objectives. Minimized redundancy allows
the company to avoid unnecessary costs in its airline operations.

Disadvantages. A disadvantage of Southwest Airlines Co.’s corporate structure is the

limited organizational flexibility, which is typical in traditional businesses with unitary
structural forms. For example, the organizational structure comes with strong strategic
management control, but at the expense of flexibility in allowing various organizational
areas or components to change operational tactics and strategies to suit the daily
challenges they face in commercial aviation operations. In addition, Southwest Airlines
Co.’s organizational culture, which implies teamwork, is not strongly represented in the
corporate structural characteristics. This disadvantage is notable, based on the
company’s aim of providing a warm and friendly atmosphere to attract travelers.

Southwest Airlines Co.’s Organizational Culture & Its

Characteristics: An Analysis
UPDATED ONUPDATED ON MAY 30, 2019 BY LISA BROWN

A Southwest aircraft at San Francisco

International Airport in 2011. Southwest Airlines Co.’s organizational culture and related cultural
characteristics focus on employees as a foundation for high quality service, cost effectiveness,
and profitability in commercial aviation operations. (Photo: Public Domain)

Southwest Airlines Co.’s organizational culture promotes employee well-being, pointing

to the underlying principle that employees who are properly taken care of are the ones
who provide the highest quality of output. In theory, corporate culture defines the
philosophy, beliefs, traditions, core values and behavioral expectations among
employees; influences every aspect of the business; and serves as a critical success
factor in the company’s long-term growth in the global commercial aviation industry. The
corporate culture supports the achievement of Southwest Airlines Co.’s corporate
mission and vision statements, which require high quality and popularity to ensure long-
term profitability. The company’s organizational culture supports employee involvement,
satisfaction, morale, and motivation to aim for high performance that relates to the
mission and vision. As one of the leading airlines, Southwest takes pride in its
organizational culture, as other firms attempt to emulate this cultural approach. Thus,
the enterprise illustrates the significance of its corporate culture in achieving success in
the airline industry.
 The commercial aviation industry involves aggressive competitors that utilize various
factors, such as cost and pricing, to reinforce their competitive advantages. In
competing against other airlines, such as United Airlines, Delta Air Lines, and American
Airlines, Southwest Airlines Co. considers its organizational culture as a strategic
management tool for enhancing the business in terms of quality of multinational
operations and organizational efficiency. Through this corporate culture, the company
addresses the competitive environment by focusing on its human resource
management and development practices, such as in handling training and motivational
programs for employees in flight operations. Such organizational cultural factors align
with Southwest Airlines Co.’s generic strategy and intensive growth strategies to ensure
competitive advantages in the industry.

Southwest’s Organizational Culture Type and Characteristics

Southwest Airlines has an organizational culture for employee well-being. In

developing and maintaining its corporate culture, the company’s administration focuses
on individual employees as the foundation of its commercial aviation business. As a
result, Southwest Airlines has various programs and policies that address employees’
morale, motivation, and job satisfaction. This organizational cultural aspect contributes
to satisfactory employee performance, which leads to high business performance in the
air travel market. The following are the main characteristics of Southwest Airlines Co.’s
corporate culture:

1. Employee-centered appreciation, recognition, celebration

2. For employees: Living the Southwest Way
3. For customers and other business stakeholders: Working the Southwest Way

Employee-Centered Appreciation, Recognition, and Celebration. Southwest

Airlines Co.’s organizational culture highlights the significance of its workforce as a
major factor in long-term success. Through its Culture Services Department, the
company reinforces its culture, while making employees feel that they are valued in the
airline corporation. This valuing in the corporate culture comes in the form of formal and
informal appreciation and recognition, as well as various celebration events, such as
Southwest-sponsored parties that encourage employees to have fun and enjoy working
for the company. The formal and institutionalized implementations integrate the
organizational culture into the company’s organizational development and
organizational design/system for operations in the air transportation sector. Thus, this
corporate cultural characteristic is integrated into Southwest Airlines Co.’s
organizational structure.

Living The Southwest Way. Given the emphasis on appreciation, recognition, and
celebration, the company facilitates the Southwest Way of living among employees.
This characteristic of the aviation company’s organizational culture motivates workers to
strive to reach ideals in life, such as excellence, perseverance, and respect, among
other factors. These values are integrated in Southwest Airlines Co.’s corporate culture
for the purpose of optimizing employee performance and satisfaction in the workplace
and outside the workplace. As a result, the company applies a holistic organizational
culture approach in managing human resources to achieve the ideal work-life balance.

Working The Southwest Way. Concerning other areas of the business, the Southwest
Way of working is implemented as a cultural approach throughout the organization. This
aspect of the organizational culture focuses on employees’ performance for the benefit
of the business and its stakeholders, including customers (passengers) and investors.
For example, the Southwest Way of working motivates workers to ensure safety,
regulatory compliance, and friendliness in providing service. These values address
work-related strategic objectives, indicating the company’s corporate culture and its link
to the industry environment of commercial aviation.

Southwest’s Corporate Culture: Advantages & Strategic

Considerations

Employees are at the center of the organizational culture of Southwest Airlines. The
company benefits from this cultural approach, especially in bolstering the contributions
of human resources in the success of the commercial aviation business. For example,
the effects of this corporate culture combine with the business strengths identified in
the SWOT analysis of Southwest Airlines Co. to reinforce competitive advantages,
especially against major competitors. This reinforcement is advantageous in ensuring
the company’s long-term success as a major firm in the civil aviation market.
Considering tough competition in the industry, determined through a Porter’s Five
Forces analysis of Southwest Airlines Co., the corporate culture serves as a beneficial
tool for the company’s strategic planning and strategic positioning.

Southwest Airlines SWOT Analysis & Recommendations

UPDATED ONUPDATED ON MAY 30, 2019 BY CHRISTOPHER MITCHELL

A Southwest aircraft at Bob Hope Airport,

Burbank, Los Angeles, California. A SWOT analysis of Southwest Airlines Co. identifies global
growth and expansion opportunities that the company can exploit. (Photo: Public Domain)

Southwest Airlines Co.’s operations as one of the biggest low-cost carriers in the world
are a showcase of how the company’s strategies are appropriate in addressing the
 internal and external strategic factors identified in this SWOT analysis. The SWOT
analysis framework evaluates the enterprise in terms of business strengths and
weaknesses (internal factors) and opportunities and threats (external factors) in the
commercial aviation industry. Southwest Airlines Co.’s corporate vision and mission
statements use such strengths to move the business forward, especially in taking
advantage of available opportunities. Aligning the airline company’s strategic
management with the issues presented in this SWOT analysis can optimize business
performance and minimize the problems associated with the relevant weaknesses and
threats. Considering the company’s role as a major player in the air travel market,
Southwest Airlines Co.’s approach to overcoming business challenges provides insights
on best practices for low-cost providers in the industry and beyond.

This SWOT analysis highlights how the business and its competitive advantages and
limitations are partly under the influence of Southwest Airlines Co.’s generic strategy
and intensive growth strategies. For example, the company’s strategic planning and
related decisions determine which SWOT elements are prioritized, such as in choosing
to focus on a single threat and a single weakness by using all of the strengths of the
airline business organization. Southwest’s leadership and administration consider
possible strategic changes as a way to respond to the external and internal strategic
factors shown in this SWOT analysis.

Southwest’s Strengths (Internal Strategic Factors)

Southwest Airlines Co.’s strengths are the internal factors that contribute to high
operational productivity and business competitive advantages. In this SWOT analysis
case, such strengths enable the company to compete against other major airlines, and
take advantage of growth opportunities available in the industry environment. The major
strengths of Southwest Airlines are as follows:

1. Strong commercial aviation brand

2. Large fleet and organizational size
3. Scalability of operations involving a point-to-point system

As a large-scale low-cost carrier, Southwest Airlines enjoys a strong brand that enables
the business to attract passengers. This internal strategic factor supports the company’s
ability to penetrate markets and successfully introduce new flight routes, based on
brand recognition among target customers. Southwest Airlines Co.’s corporate culture’s
emphasis on fun and friendliness is a factor that reinforces this strength by making
travelers’ experiences enjoyable. Also relevant in this SWOT analysis is the company’s
large fleet size and corresponding organizational size, which are a strength that
supports operational expansion. Moreover, scalability of operations is an internal factor
that strengthens Southwest Airlines Co.’s ability to expand. For example, with minimal
strain on current operations, the company’s system can support new routes. Such
strength is based on how Southwest Airlines Co.’s corporate structure maintains a
point-to-point system of flight routes. This aspect of the SWOT analysis indicates that
 the company’s strengths can support further growth, such as through international
expansion.

Southwest’s Weaknesses (Internal Strategic Factors)

Weaknesses are internal factors that hinder the potential business growth of the airline
company, despite the strengths identified in this SWOT analysis. Southwest Airlines
needs to address its weaknesses to maximize the benefits of its business strengths.
The following weaknesses are among the most notable in the commercial aviation
company:

1. Limited presence in the international commercial aviation market

2. Thin profit margins linked to cost leadership

Southwest Airlines has most of its operations in the United States. In this SWOT
analysis, such a situation is a weakness that corresponds to limiting the company’s
revenue sources to its current air travel markets, especially the United States. In
addition, Southwest’s thin profit margins are a weakness based on its use of the cost
leadership generic strategy for competitive advantage. This strategy enables the
company to offer low-cost airline services, but also minimizes profit margins. Thus, the
internal strategic factors in this aspect of the SWOT analysis are based mainly on the
strategic choices of Southwest Airlines in its current business approach for maintaining
its business operations.

Opportunities for Southwest Airlines Co. (External Strategic Factors)

Southwest’s industry environment offers opportunities for business growth. In the

SWOT analysis model, these opportunities are external factors that present ways of
improving the airline corporation. The following are some of the opportunities available
to Southwest Airlines:

1. Growth through expansion in the global commercial aviation market

2. New partnerships with complementing firms
3. Growth through diversification of service offerings in or related to aviation

Considering Southwest’s focus on the United States as its main market, the company
has the opportunity to expand to other markets. This external strategic factor refers to
potential significant revenue growth as the company establishes new flight routes to
serve more countries. New partnerships with complementing firms are also an
opportunity in this SWOT analysis of Southwest Airlines Co. For example, these
complementing firms can function as additional channels to reach customers, such as in
terms of ticket sales. Thus, this external factor relates to Southwest Airlines Co.’s
marketing mix or 4Ps. In addition, the company has the opportunity to grow by
diversifying its business, such as through new services or businesses that can form a
synergy with its existing airline operations. Thus, the external factors in this SWOT
 analysis of Southwest Airlines indicate the benefit of adding new services, new routes,
and new partnerships or alliances.

Threats Facing Southwest Airlines (External Strategic Factors)

Threats are external factors that reduce or hinder business development. In this SWOT
analysis case of Southwest Airlines, threats make it more challenging to expand the
business internationally. The following threats impose pressure on the airline company:

1. Competition with large airline companies

2. Regulatory changes in commercial aviation
3. Volatility of fuel prices
4. Limited population of pilots

Competition is a strong threat against Southwest Airlines Co. For example, companies
like Delta Air Lines, American Airlines, and United Airlines are aggressive competitors.
In this SWOT analysis, such an external strategic factor hinders business expansion in
markets where these competitors are present, and contributes to the competitive forces
identifiable through a Porter’s Five Forces analysis of Southwest Airlines Co. On the
other hand, regulatory changes in commercial aviation are a minor threat that imposes
challenges and associated costs in compliance efforts. Southwest Airlines also
experiences the threat of volatile fuel prices. This external factor is a threat because air
transportation firms depend on fuel, which account for major operating costs. Southwest
Airlines Co.’s corporate social responsibility strategy helps address this threat.
Furthermore, the company faces the threat of a limited pilot population that is estimated
to be inadequate to support the industry’s future needs. This aspect of the SWOT
analysis shows that Southwest Airlines Co.’s business performance is subject to
industry variables, some of which are beyond the company’s control.

Summary & Recommendations – SWOT Analysis of Southwest

Airlines Co.

The strengths of Southwest Airlines provide support for ensuring competitive

advantages and a profitable business. For example, the strong brand and scalability of
operations facilitate the corporation’s possible expansion into additional commercial
aviation markets. However, the weaknesses identified in this SWOT analysis indicate
that Southwest Airlines has strategies that limit its current business profitability and
growth. Nonetheless, the company has the potential to grow through new strategies to
exploit opportunities in the global civil aviation market, such as business expansion and
the establishment of new partnerships. Still, the threats in the industry environment
impose pressure on Southwest Airlines to consider innovative or radical strategies for
long-term business success. Considering the internal factors and external factors in this
SWOT analysis, it is recommended that the company expand its operations to other air
travel markets. This recommendation addresses Southwest’s potential revenue and
profit growth through international expansion. Another recommendation is to develop
new alliances with other airlines or complementary non-airline businesses, as a way to
increase the company’s reach in the global market.