Question

Is the U.S. airline industry attractive? Describe Southwest Airlines’ strategy. What are the most important strategic choices? What is unique about the Southwest strategy? What components of Southwest’s strategy are VRIO? Would it be easy to imitate its strategy? Is the strategy sustainable? What threats are on the horizon? Should Southwest become an international airline?

Answer 1

Answer:

Yes, the US airline Industry is attractive. Southwest Airline's has a unique business model with an efficient operational strategy.

Explanation:

The most important strategic choices for Southwest Airline is a low-cost operational structure that achieves high returns on capital due to a unique

The unique thing about southwest strategy is, the company has good credit rating which has positioned them strategically compared to its competitors.

The components of Southwest's strategy that are VRIO is as follows

!. The management keeps the balance sheet strong by being financially conservative.

2. Investors concentrates on earnings volatility and short term stock prizes

3. They are specific about their staff specifications

4. They are deliberate in their branding and public image.

No, it would not be easy to imitate the strategy like the one they employed to mitigate the tragic incident that occurred seven months ago that had one person killed.

Yes, their strategy is sustainable because it is both cost effective, efficient and produces result.

The threats they are likely to face include

1. Unfavorable Legislation: Regulatory changes in commercial aviation that directly influences their current business model will directly affect their impeccable record.

2. They will be at a disadvantage position if pitted against larger airline companies.

3. Their pilot population is limited.

4. Volatility of fuel prices can upset their lean budget.

From the foregoing, it is evident that southwest has a sustainable business model that should make them become an international airline