Business Analysis



SouthwestAirlines is one of the vast carriers in the globe. Despite thecompetition in the airline industry, the carrier has been in aposition to operate well in the industry. In this report, a briefdescription of the airline will be provided and factors thatinfluence the performance of the organization will be discussed.Also, business actions that are likely to overcome factors that canmake the airline to remain competitive will be proposed.

Descriptionof the Organization

SouthwestAirlines describes a United States’ major airline that is wellknown for its low-cost pricing. The airline became established in1967 and has its headquarters in Dallas (Lauer, 2005). As per 2014,the number of employees working in the airline is approximately46,000. Approximately, more than 3,800 flights are operated by theairline in a single day.

FactorsImpacting the Performance of the Organization

Thereare different factors that impact the performance of the SouthwestAirlines. One of the factors that impact the performance of theairline is its low-cost strategy. The airline is a low-cost carrierand emphasizes on fast and no-frills service. The low-cost strategyhas been supported by the airline’s decision of not providingin-flight services offered by legacy carriers as well as theairline’s decision of flying Boeing airplanes only. Another factorthat impacts the organization’s performance entails its relationwith employees (Gittell, 2005). The airline has ensured that’s itsemployees remain loyal to the organization through the use ofmotivation tactics. This ensures employees remain happy throughoutand thus drives the organization’s profits up since clients arealso happy of the service that they receive from motivated employees(Gittell, 2005). A third factor that influences the performance ofthe organization is differentiation. The airline has been capable ofproviding services not offered in other airlines for instance, ithas a reward system where members are capable of redeeming theirpoints.

Outof the three factors that impact the performance of the organization,mentioned above, I think the two most critical that the organizationshould pay attention to in order to remain competitive are thelow-cost strategy and motivation of employees to ensure that theyremain loyal to the organization. The low-cost strategy can beperceived as a critical factor for the organization to remaincompetitive because customers are always concerned of the pricecharged for a service. Because customers are always interested in theprice charged for a service, they are likely to go for services thatare lowly priced in case the utility is the same. Since the utilityof a flight is the same, regardless of the carrier used, customersare likely to consider the use of lowly-priced carriers. This impliesthat by Southwest Airlines maintaining its low-cost strategy, itwill be in a position to keep as well as attract new customers. Thisis a critical move that will help in keeping the organizationcompetitive.

Alternatively,motivation of employees can also be considered a key factor for theorganization to remain competitive. Employees in an organization areusually considered as a valuable asset to the organization this isbecause employees play a significant role in ensuring that anorganization delivers its services to customers as required. Thus,when the employees of an organization are motivated, they are likelyto serve customers well making customers to always seek services fromthe organization. When this is the case, it would be feasible for anorganization to remain competitive because the employees are highlyencouraged to work in the organization. This being the situation,motivation of employees is exceedingly critical for the organizationto remain competitive.


Oneof the business actions to overcome the factor of low-cost strategywould be the adoption of cost-cutting strategies. Cost-cuttingstrategies would ensure that operating costs are greatly reduced,which would render the airline to offer lowly-priced fares. Forexample, through using airplane from a single brand or else a singlemanufacturer would ensure that maintenance as well as training costsare mitigated. Also, through ensuring that the fleets used by theairline are more fuel efficient would help in reducing operatingcosts. This would enable the organization continue offeringlow-priced fares.

Inmaintaining the factor of employee loyalty, an important businessaction would be to keep the employees motivated. In motivatingemployees, there are different ways that the business can consider.For example, the business can motivate its employees by offering thempaid leaves such as sick leave and when employees are off-duty. Also,employees can be motivated through engaging them in decision-makingprocess for matters of the organization that affects them. Theseforms of motivation would help in making employees remain loyal tothe organization.

Anotherbusiness action that would be important to the organization entailscreating a difference in the offering of services from othercarriers. It is important for the organization to consider engagingin services that create a difference in the business for example,the organization may offer an after-sale service to its customers.This would help in creating differentiation.


Gittell,J. H. (2005). TheSouthwest Airlines way: Using the power of relationships to achievehigh performance.New York: McGraw-Hill.

Lauer,C. (2010). SouthwestAirlines.Santa Barbara, Calif: Greenwood.