In 2014, Southwest Airlines was the market share leader in domestic air travel in the United States. It transported more passengers from US airports to US destinations than any other airline and it offered more regularly scheduled domestic flights than any other airline. Southwest also has the enviable distinction of being the only major carrier in the US that was consistently profitable, having reported a profit every year since 1973.
Southwest’s CEO Gary Kelly has asked you and your team to advise him on what strategic issues, policies, procedures and operating practices at Southwest are working particularly well and what changes might be needed to improve Southwest’s performance in 2014 and beyond. Prepare a written report that includes the following:
1. What are the key elements of Southwest Airlines’ strategy? Which of the five competitive strategies discussed in Chapter 5 (overall low cost provider, broad differentiaton, focused differentiation, focused low cost, best cost provider) most closely approximates the competitive approach that the company is applying and why do you think that? How well do the pieces fit together and is their strategy evolving? Explain.