RUNNING HEAD: Southwest Airlines 1
Case Analysis 16 – Southwest Airlines
CASE 16: SOUTHWEST AIRLINES 2
Introduction and Background
The story of Southwest Airlines showcases a revolutionary airline company with modest
roots planted by authentic, hardworking employees with a vision to make airline travel
affordable for everyone. The company’s vision, unique corporate culture, unwavering
commitment to customer service, and innovative leader not intimidated by risks have allowed the
airline to thrive amidst an industry that was otherwise dissolving. Southwest Airlines’ history is
an inspiring story in and of itself, but this case analysis focuses on the company through the lens
of strategic management in the airline industry within a competitive environment. This
discussion provides an opportunity to examine Southwest Airlines’ distinctive strategic approach
and thus, the company’s remarkable performance record. It also questions whether the airline’s
competitive strategy is sustainable long-term in a rapidly changing industry. Southwest Airlines’
success is measured on the company’s strategy for culture, operations, systems, and the critical
leap of entering international markets for the first time.
The analysis first discusses an overview of the U.S. airline industry, its history, and
industry metrics for various major airlines. This topic is accompanied by a review of industry
economics and comments on more recent industry performance. The analysis then dives into a
worthwhile explanation of the background, operations, and culture of Southwest Airlines.
Founder Herb Kelleher is praised for his innovative and forward-thinking leadership ability that
cultivated the Southwest Airlines spirit and culture that makes the brand so unique. An
examination of failed attempts by competitors to imitate this recipe for success in hopes of
improving their own brand is reviewed to better understand the differences. The next matter for
reflection is the company’s 2011 acquisition of AirTran and the impact that the integration had
on the company’s culture, operations, systems. Finally, the case analysis concludes by describing
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Southwest Airlines’ recent expansion initiatives as well as what the future must hold to ensure
long-term success. A comprehensive analysis of these various topics equips readers for a
discussion of the opportunities and challenges facing Southwest Airlines and an assessment of
the company’s readiness for evolving conditions.
1. Airline industry
The commercial airline industry is known for its unpredictability. It has experienced
significant selloffs, mergers, and disorder since deregulation in 1978. The market is highly
competitive and very susceptible to outside risks such as fuel crises, recessions, and now sadly
acts of terrorism. More so are the internal risks like fare battles, financial losses, and even
bankruptcies. Obvious signs of instability within the industry can be identified by salary
inequities, high turnover rates, and marketing gimmicks. These factors impact the industry by
