Major Challenges
The leadership of Southwest Airlines has been under increasing pressure for a growing number of reasons in more recent years. These include emerging startups offering both cost efficiency and customized passenger experience and growing competition from established players as a result of a number of merges and acquisitions which have only enhanced operational excellence, expanded markets and driven costs down. Not unconnected to a changing airline industry landscape, Southwest faces a major corporate culture challenge caused primarily by company 's more recent acquisitions which have led to internal management issues of integrating disparate corporate cultures (of parent and acquired entities) and, not least, to maintain a corporate …show more content…
First, Southwest Airlines has a long history of being a short-haul, fast-track airline. By expanding nationally and internationally, Southwest Airlines has to compete against established and startup players who are more experienced and agile respectively in long-haul operations compared to Southwest 's new entry (compared to established players) and size (compared to startups). Second, Southwest Airlines has not properly planned for major national and international expansion. This has led to current major challenge of having to handle strategic, operational and governance issues all at once instead of carefully planning for different growth paths. Thirdly, in response to multiple acquisitions and expansions Southwest Airlines appears to be on an edge of a severe corporate identity crisis. Historically defined by camaraderie and loyalty, Southwest Airlines – now an ever expanding entity – cannot afford to offer personal expressions of loyalty either among staff or to passengers for an entity becoming more abstract and more à la Corporate …show more content…
First, Southwest Airlines can carefully pick her future partnerships and acquisitions in specific markets to ensure cost effectiveness is not achieved at an expense of service quality and/or corporate culture. Second, Southwest Airlines can opt for innovative initiatives aimed at specific passenger segments not properly addressed in current passenger schema. This can have a form of premium seating offers, loyalty programs or completely separate airline services modeled, for example, upon Virgin America 's luxury and long-haul services. Third, Southwest Airlines can retire her oldest aircraft fleet, as part of a larger cost effectiveness plan, to less intensive routes. This, combined by long-range investments in oil refineries and, should help reduce one of airline industry 's highest fixed costs, i.e.
The leadership of Southwest Airlines has been under increasing pressure for a growing number of reasons in more recent years. These include emerging startups offering both cost efficiency and customized passenger experience and growing competition from established players as a result of a number of merges and acquisitions which have only enhanced operational excellence, expanded markets and driven costs down. Not unconnected to a changing airline industry landscape, Southwest faces a major corporate culture challenge caused primarily by company 's more recent acquisitions which have led to internal management issues of integrating disparate corporate cultures (of parent and acquired entities) and, not least, to maintain a corporate …show more content…
First, Southwest Airlines has a long history of being a short-haul, fast-track airline. By expanding nationally and internationally, Southwest Airlines has to compete against established and startup players who are more experienced and agile respectively in long-haul operations compared to Southwest 's new entry (compared to established players) and size (compared to startups). Second, Southwest Airlines has not properly planned for major national and international expansion. This has led to current major challenge of having to handle strategic, operational and governance issues all at once instead of carefully planning for different growth paths. Thirdly, in response to multiple acquisitions and expansions Southwest Airlines appears to be on an edge of a severe corporate identity crisis. Historically defined by camaraderie and loyalty, Southwest Airlines – now an ever expanding entity – cannot afford to offer personal expressions of loyalty either among staff or to passengers for an entity becoming more abstract and more à la Corporate …show more content…
First, Southwest Airlines can carefully pick her future partnerships and acquisitions in specific markets to ensure cost effectiveness is not achieved at an expense of service quality and/or corporate culture. Second, Southwest Airlines can opt for innovative initiatives aimed at specific passenger segments not properly addressed in current passenger schema. This can have a form of premium seating offers, loyalty programs or completely separate airline services modeled, for example, upon Virgin America 's luxury and long-haul services. Third, Southwest Airlines can retire her oldest aircraft fleet, as part of a larger cost effectiveness plan, to less intensive routes. This, combined by long-range investments in oil refineries and, should help reduce one of airline industry 's highest fixed costs, i.e.