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After 18 months of deficit operations, Southwest Airlines stands on the brink of profitability. Selective application of discount fares has contributed to a rapid growth in market share. Then, in February 1973, its major competitor halves all fares on Southwest's principal route. Management must decide how to respond. Exhibits detail Southwest's cost structure plus passenger and flight statistics for Southwest and competitors.
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Southwest Airlines (D) is a Harvard Business (HBR) Case Study on Sales & Marketing , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. Southwest Airlines (D) is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. Southwest Airlines (D) case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. Southwest Airlines (D) will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.
Southwest Airlines (D) case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Sales & Marketing, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of Southwest Airlines (D), is to not only build a competitive position of the organization but also to sustain it over a period of time.
The Southwest Airlines (D) case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
In the Texas Business School, Southwest Airlines (D) case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.
We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – Southwest Airlines (D)
The first step to solve HBR Southwest Airlines (D) case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Southwest Southwest's is facing right now. Even though the problem statement is essentially – “Sales & Marketing” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Southwest Southwest's, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.
Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the Southwest Airlines (D).
The external environment analysis of Southwest Airlines (D) will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Southwest Airlines (D) case study. PESTEL analysis of " Southwest Airlines (D)" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with Southwest Airlines (D) macro-environment and how it impacts the businesses of the firm.
To do comprehensive PESTEL analysis of case study – Southwest Airlines (D) , we have researched numerous components under the six factors of PESTEL analysis.
Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.
Government policies have significant impact on the business environment of any country. The firm in “ Southwest Airlines (D) ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.
Data safety laws – The countries in which Southwest Southwest's is operating, firms are required to store customer data within the premises of the country. Southwest Southwest's needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.
Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. Southwest Airlines (D) has numerous instances where the competition regulations aspects can be scrutinized.
Import restrictions on products – Before entering the new market, Southwest Southwest's in case study Southwest Airlines (D)" should look into the import restrictions that may be present in the prospective market.
Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Southwest Southwest's in case study “ Southwest Airlines (D) ” should look into these export restrictions policies.
Foreign Direct Investment Policies – Government policies favors local companies over international policies, Southwest Southwest's in case study “ Southwest Airlines (D) ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.
Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.
Tariffs – Chekout how much tariffs the firm needs to pay in the “ Southwest Airlines (D) ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Southwest Southwest's can compete against other competitors.
Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at Southwest Airlines (D) case study have to assess whether their business can benefit from such government assistance and subsidies.
Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.
Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.
Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.
Corruption level – Southwest Southwest's needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.
Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.
Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.
PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in Southwest Airlines (D) case study. PESTEL analysis of " Southwest Airlines (D)" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.
Amanda Watson
Amanda is strategy expert at Texas Business School . She is passionate about corporate strategy, competitive strategy, game theory, and business model innovation. You can hire Texas Business School professinoals to revolutionize your strategy & business.
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