WeekK 3 - Summative Assessment - Business Strategies Proposal_MGT-526

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BUSINESS STRATEGIES PROPOSAL Week 3 – Summative Assessment: Business Strategies Proposal University of Phoenix MGT/526: Managing in a Changing Environment INTRODUCTION

BUSINESS STRATEGIES PROPOSAL As the Southwest Airlines (SWA) manager, the author of this paper will develop a proposal for how Southwest Airlines (SWA) can align its operational needs with the organization's business strategies. This paper will include an analysis that is clear and concise so that the executive level can understand the past to improve the future of the organization. Southwest Airlines (SWA), a US-based airline, is playing a leading role in the aviation industry. Despite the intense competition in the U.S. aviation industry, SWA has firmly retained its leading position in the US and across the globe as a low-cost carrier airline. Providing services to more than 121 destinations with operations in ten more countries. The provisions of convenience, customer safety, and quality service are the marked mission statements of SWA's chief. SWA's mission and vision have enabled the organization to establish competitiveness in the market. SWA has swept the market by providing low- cost services and customer friendliness. The company hit the spot when in 2018, about 163.6 million passengers used the airline service of the company. The strength of any company, the competitional horizons, is determined by various strategic factors, including efficient operations based on low-cost provisions for customers. Southwest Airlines (SWA) Porter Five Forces Analysis The Porter Five Forces Analysis of Southwest Airlines (SWA) has assisted in identifying the competitive position of SWA in the market, considering the effect of these external forces acting on it. Threat of New Entrants SWA has established its brand name based on cost advantage as it offers low-cost airline services. This factor alone makes it exceedingly difficult for competitors to enter this industry and assume the market of well-established, trusted airlines. (Jansen, 2016) Threat of Substitutes

BUSINESS STRATEGIES PROPOSAL Substitutes for airlines include train service, car service, bus service, or ship service. They all have their advantages depending on what the needs and budget of the client are. Air transportation is much faster than land transportation, however at times more expensive. convenient is looking for convenience and time-saving transportation, then the airline is the speediest mode of transportation. However, SWA constantly faces threats of substitution trying to break into the market by offering both convenience and low costs. (Jansen, 2016) Bargaining Power of Suppliers There are very few suppliers in the airline industry. They include manufacturers and trainers of employees. Their only business is with airline companies in which they try to build long-term contracts and relationships to keep their businesses growing. Their bargaining power is very low because more times than often, they need to accept the terms of the airline companies to stay in business. (Jansen, 2016) Bargaining Power of Buyers There are two types of buyers in the airline industry. Individual and group travelers. Group travelers usually buy from agents which have loads of options of airlines and are usually looking for the lowest cost tickets. Also, gives the agent excessive bargaining power as it does with the individual traveler who is also able to switch at an exceptionally low cost. (Jansen, 2016) Rivalry Among Existing Firms SWA must compete with local as well as international airlines in the market. The competition in the airline market is extraordinarily strong mostly due to the time it takes an airline company to establish a brand, the huge investments it must make, and the massive profit margins that are available if successful. SWA's competitors are organizations such as Delta, American, and United. SWA has an

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BUSINESS STRATEGIES PROPOSAL endless job when it comes to improving its services and working on its competitive edge of providing low-cost transportation. (Phelps, 2016) The Effectiveness of the Current (SWA) Leadership Model SWA makes its employees the most important people in their business. The company empowers its employees to deliver their best effort repeatedly. This is part of the Servant Leadership Model that Southwest Airlines uses to motivate its teams. It is based on the idea that leaders prioritize serving the greater good. Leaders who use this style of leadership serve their team and organization first. The objectives of the leaders take priority last, and the employees feel more likely to have their voices heard. All SWA employees are then expected to pay it forward and share the same concern, respect, and caring attitude with every Southwest Customer. This is why SWA is globally known for its Hospitality and culture. The Servant Leadership Model has been extraordinarily successful and effective for SWA, and I would encourage the continuance of this leadership style if it has been working all these years. It encourages collaboration, trust, and empathy. However, I would reconsider the name of the model (Servant Leadership) which I have learned that a few employees may have an issue with. (SWA Co., 2023) Recommended Alternative Leadership Models for SWA Quite frankly, I would not recommend any other leadership model for SWA, because its existing model seems to fit perfectly, and appears to be working out particularly well for the company. SWA's third quarter 2023 net income was $193 million, and $240 million excluding specific terms. The company's liquidity of $12.7 billion was well more than its $80.0 billion outstanding debt. SWA's third quarter 2023 operating revenues were a third-quarter $6.5 billion, which is a 4.9 percent increase year- over-year for the company. Leadership is all well on the "Southwest" front. (SWA Co., 2023)

BUSINESS STRATEGIES PROPOSAL Recommendations to Align (SWA) Operational Needs and Business As a SWA manager who believes in the company's leadership model, mission, and vision, I would recommend that SWA continues to pursue global expansion to better serve the international markets and increase its competitive edge within that market. However, for the company to grow its global service it would also be my recommendation to increase and upgrade its fleet of aircraft by purchasing Boeing 737 Max Jetliners. Keeping true to the 737 line of aircraft, the Max Jetliners are larger, have more fuel-efficient engines, and will extend SWA's distance as needed in the global market. My last recommendation would be that SWA either purchase its hotels in or near the areas it services or work out long-term deals with hotel providers in areas of service to keep SWA clients in the loop when things do not go so well. The airlines should have the ability to service their clients outside of the airport as well as inside the airport. When the airlines have to cancel or postpone flights, which happens more than often, SWA should be able to provide free discounted, or low-cost room and board to allow passengers additional options that will help keep them safe, secure, and within the Southwest Airlines travel bubble which also keeps SWA true to its mission of "Connecting people to what's important in their lives through friendly, reliable, and low-cost air travel," and their vision "To be the world's most loved, most efficient, and most profitable airline." Without growth in these areas, SWA is not truly fulfilling its mission and vision statements.

BUSINESS STRATEGIES PROPOSAL References Jansen, B. (2016, October 26). Southwest: Competition from "ultra-low-cost carriers" is soaring. USA Today. https://www.usatoday.com/story/travel/flights/todayinthesky/2016/10/26/southwest- low-cost-carrier-competition/92782630/ Phelps, S. (2016, August 24). Southwest Airlines understands the heart of marketing is experience. Forbes. https://www.forbes.com/sites/stanphelps/2014/09/14/southwest-airlines-understands- the-heart-of-marketing-is-experience/?sh=4ef43ad12bda SWA Co. (2023). Southwest Airlines reports third quarter 2023 results. – Southwest Airlines. https://www.southwestairlinesinvestorrelations.com/news-and-events/news-releases/2023/10- 26-2023-114553887

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