Internal Analysis and SWOT Analysis Essay Example | Topics and Well Written Essays - 1000 words

Internal Analysis and SWOT Analysis - Essay Example Porter came up with the Value Chain concept to explain how a firm could create value from its processes and partnerships. He divided a firm’s activities into Primary and Secondary Activities, which are respectively essential and ancillary to its business success. In this paper we will take a view of Southwest Airlines’ internal strategy and how it measures up against the competition. Physical Resources In terms of physical resources, we see that Southwest Airlines has a good number of aircraft both in its own fleet and that of the recently acquired Air Tran. Despite its low cost leadership strategy, it has concentrated on having the latest fleet of 717 and 737 MAX for passenger comfort. This shows that Southwest Airlines is committed to its goal of making the customer have a WOW experience and continue choosing it at their airline of choice. As of 31 Dec 2011, it had a total of 698 aircraft comprising 610 Boeing 737s and 88 Boeing 717s (Annual Report, 2011). Financial R esources Despite its low cost strategy, Southwest earned a profit of $178 million in 2011 and has been doing so consistently over the last 39 years. This is highly commendable in an industry that has been fraught with risk since the last decade. Fuel costs remain the major worry, as reported in the Annual Report. With its reduced fares and refund/ carry forward policy, Southwest still has an edge over other airlines (Annual Report, 2011). Amazingly, it is still investing in technology like faster reservation systems and latest aircraft to match competitors and meet customer needs. Human Resources For Southwest, its people are one of its key resources. As of 31 Dec 2011, it had in excess of 45,000 employees, including 19,000 flight personnel and 2,400 administrative staff (Annual Report, 2011). The various groups of workers are represented by at least 18 different Collective Bargaining Agents (CBAs) under different Unions. Meeting the demands of these entities and integrating Air Tra n staff into the Southwest fold from a cultural and operational standpoint is expected to be a major challenge. Technical Resources   In terms of technical resources, Southwest Airlines can look upon the experience of its staff, the use of modern aircraft and reservation systems, and the operational and logistical administration of its fleet, cargo and passengers. No less important is its ability to sync its operations, service, marketing and sales to run concurrently and efficiently (Henry, 2007). Intellectual Resources Among Southwest’s key intellectual resources are its use of the Love field for its operations and the mind and vision of its upper management including the CEO and the Board of Directors that give the airline its strategic direction for the future. Its brand name and reputation for efficient service no doubt contribute to its revenues and profits. It is currently concentrating on attracting groups of passengers that present a continuing need to be transport ed for instance, patients under acute care settings. This shows that the company is innovative and not afraid to experiment. Goodwill Considering its vast experience and time spent in this industry, Southwest is reaping the element of goodwill as can be seen from its loyal passengers. Loyalty programs with cards and air miles are common in the airline industry, but Southwest also has an advantage in its flexible ticket policies including refunds, transfers, carry forward and