Complete the following discussion questions for Case 16: Southwest Airlines
1. What are the key industry conditions which render profits elusive for airlines? Using the 5 forces model of competition, what does the structure of the industry reveal about competitive rivalry and profit potential?
2. Discuss Southwest Airlines’ business-level strategy and its record of success. How is the company stacking up against other major airlines today? Are there any strategic shortcomings that need to be addressed?
3. Identify and explore the opportunities and challenges presented by Southwest Airlines’ acquisition of AirTran. What are the merits and concerns of using the acquisition to launch the company’s expansion into international territories?
4. Does Southwest Airlines have a sustainable competitive advantage? What strategic recommendations can be made to strengthen the durability of the company’s competitive advantage, or do conditions suggest that it is time for a shift in Southwest Airlines’ strategic direction to achieve long-term competitiveness against its rivals?