Lobbying for Love? Southwest Airlines and the Wright Amendment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Lobbying for Love? Southwest Airlines and the Wright Amendment
The fall of 2004 brought exciting news to Love Field, the Texas headquarters of Southwest Airlines. Delta Airlines, one of Southwest's main competitors, had announced that it would dramatically decrease service from the nearby Dallas/Fort Worth International (DFW) airport, cutting the number of daily flights from 250 to a mere 21. Gary Kelly, Southwest's newly minted CEO, thought about what appeared to be a golden opportunity. How could Southwest best capitalize on Delta's withdrawal? As Kelly saw it, Southwest had several options to pursue the new business opportunities. A first was to service the canceled Delta routes from Love Field. A second possibility was to encourage members of Congress to repeal the Wright Amendment, which limited Southwest's flight offerings from Love Field. An alternative to fighting for the repeal of the Wright Amendment was for Southwest to lease the 18 gates that Delta had left at DFW. Kelly carefully considered his options. Was now the time to call his lobbyist?
Authors :: Felix Oberholzer-Gee, Dennis Yao, Libby Cantrill, Patricia Wu
Swot Analysis of "Lobbying for Love? Southwest Airlines and the Wright Amendment" written by Felix Oberholzer-Gee, Dennis Yao, Libby Cantrill, Patricia Wu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Southwest Love facing as an external strategic factors. Some of the topics covered in Lobbying for Love? Southwest Airlines and the Wright Amendment case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Lobbying for Love? Southwest Airlines and the Wright Amendment casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, technology disruption, there is increasing trade war between United States & China, there is backlash against globalization, supply chains are disrupted by pandemic ,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Lobbying for Love? Southwest Airlines and the Wright Amendment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lobbying for Love? Southwest Airlines and the Wright Amendment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Southwest Love, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Southwest Love operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Lobbying for Love? Southwest Airlines and the Wright Amendment can be done for the following purposes –
1. Strategic planning using facts provided in Lobbying for Love? Southwest Airlines and the Wright Amendment case study
2. Improving business portfolio management of Southwest Love
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Southwest Love
Strengths Lobbying for Love? Southwest Airlines and the Wright Amendment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Southwest Love in Lobbying for Love? Southwest Airlines and the Wright Amendment Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Lobbying for Love? Southwest Airlines and the Wright Amendment firm has clearly differentiated products in the market place. This has enabled Southwest Love to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Southwest Love to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Southwest Love in the sector have low bargaining power. Lobbying for Love? Southwest Airlines and the Wright Amendment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Southwest Love to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Southwest Love has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lobbying for Love? Southwest Airlines and the Wright Amendment Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Southwest Love
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Southwest Love does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Southwest Love has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Lobbying for Love? Southwest Airlines and the Wright Amendment HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Southwest Love has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Southwest Love is present in almost all the verticals within the industry. This has provided firm in Lobbying for Love? Southwest Airlines and the Wright Amendment case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Southwest Love in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Southwest Love is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Felix Oberholzer-Gee, Dennis Yao, Libby Cantrill, Patricia Wu can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Southwest Love is one of the leading recruiters in the industry. Managers in the Lobbying for Love? Southwest Airlines and the Wright Amendment are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Southwest Love has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Southwest Love to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Southwest Love has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Southwest Love has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Lobbying for Love? Southwest Airlines and the Wright Amendment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lobbying for Love? Southwest Airlines and the Wright Amendment are -
Products dominated business model
– Even though Southwest Love has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Lobbying for Love? Southwest Airlines and the Wright Amendment should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lobbying for Love? Southwest Airlines and the Wright Amendment, is just above the industry average. Southwest Love needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lobbying for Love? Southwest Airlines and the Wright Amendment, in the dynamic environment Southwest Love has struggled to respond to the nimble upstart competition. Southwest Love has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Lobbying for Love? Southwest Airlines and the Wright Amendment HBR case study mentions - Southwest Love takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Southwest Love, firm in the HBR case study Lobbying for Love? Southwest Airlines and the Wright Amendment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lobbying for Love? Southwest Airlines and the Wright Amendment HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Southwest Love has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Southwest Love needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study Lobbying for Love? Southwest Airlines and the Wright Amendment that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Lobbying for Love? Southwest Airlines and the Wright Amendment can leverage the sales team experience to cultivate customer relationships as Southwest Love is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Southwest Love supply chain. Even after few cautionary changes mentioned in the HBR case study - Lobbying for Love? Southwest Airlines and the Wright Amendment, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Southwest Love vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Lobbying for Love? Southwest Airlines and the Wright Amendment has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Southwest Love 's lucrative customers.
Interest costs
– Compare to the competition, Southwest Love has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Lobbying for Love? Southwest Airlines and the Wright Amendment | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Lobbying for Love? Southwest Airlines and the Wright Amendment are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Southwest Love can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Lobbying for Love? Southwest Airlines and the Wright Amendment, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Southwest Love can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Southwest Love in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Southwest Love to increase its market reach. Southwest Love will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Southwest Love to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Southwest Love has opened avenues for new revenue streams for the organization in the industry. This can help Southwest Love to build a more holistic ecosystem as suggested in the Lobbying for Love? Southwest Airlines and the Wright Amendment case study. Southwest Love can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Southwest Love can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Southwest Love to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Southwest Love in the consumer business. Now Southwest Love can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Southwest Love is facing challenges because of the dominance of functional experts in the organization. Lobbying for Love? Southwest Airlines and the Wright Amendment case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Southwest Love can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Southwest Love can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Southwest Love can use these opportunities to build new business models that can help the communities that Southwest Love operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Lobbying for Love? Southwest Airlines and the Wright Amendment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lobbying for Love? Southwest Airlines and the Wright Amendment are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Southwest Love with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Southwest Love has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Southwest Love needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Southwest Love needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Southwest Love can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Lobbying for Love? Southwest Airlines and the Wright Amendment, Southwest Love may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Southwest Love can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Lobbying for Love? Southwest Airlines and the Wright Amendment .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Southwest Love.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Southwest Love will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Southwest Love
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Southwest Love.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Southwest Love business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Southwest Love demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Southwest Love is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Lobbying for Love? Southwest Airlines and the Wright Amendment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Lobbying for Love? Southwest Airlines and the Wright Amendment needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Lobbying for Love? Southwest Airlines and the Wright Amendment is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Lobbying for Love? Southwest Airlines and the Wright Amendment is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Lobbying for Love? Southwest Airlines and the Wright Amendment is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Southwest Love needs to make to build a sustainable competitive advantage.
