Strategic Management Southwest Airlines External Analysis
Several factors in a business’ external environment affect its operations and performance. According to Hill, Jones, & Schilling (2014), external factors of business include opportunities and threats, and they affect the operations and performance of a company from without. Several forces come into play in the external environment of a business.
Economic forces
The economies of different countries of the world have greatly been affected by the corona pandemic and the alarming global unemployment rates. The travel bans imposed by most states and countries of the world, there was a decline in the operations of the company causing economic implications on the airline.
Social, cultural, demographic, and natural environment forces
Sociocultural and demographic factors play crucial roles in determining the performance of the business in its operations as well as marketing. The findings of Statista survey carried out in 2019 indicated that at least 14% of travellers in the US in the 18 to 29 years age bracket travelled at least five times for personal reasons between 2017 and 2019. Besides, natural calamities and calamities can affect the operations of the airline.
Political, governmental and legal forces
Change of regulations in the aviation industry that may have cost implications on the airline may be a threat to the airline
Technological forces
According to Gupta (2020), the airline can improve service delivery by adopting the latest technologies in the aviation industry. Good marketing strategies are critical for the growth and expansion of the business, and therefore the company can utilize the internet to communicate its marketing messages to its target population. Moreover, the company can exploit more efficient technologies to improve security, such as the biometric boarding kiosk that hastens the security procedures. Besides, Southwest Airlines can rely on technology to enhance the payment processes. Even though the airline recently included Apple Pay and PayPal to its online payment platforms such as Wi-Fi purchase page, website and mobile app, it can still adopt other e-payment options.
Competitive forces
One of the most potent threats that Southwest Airlines has to deal with is competition from larger airlines such as United Airlines, American Airlines and Delta Airlines. Besides, the existence of aggressive competition from other modes of transport such as trains, buses and automobiles may affect the airline from without (Song, Lee & Moon, 2020).
References
Gupta S. K. (2020). Southwest Airlines SWOT Analysis
Song, M., Lee, W. S., & Moon, J. (2020). Antecedents and consequences of Southwest Airlines’ brand love. 관광연구저널, 34(4), 25-34.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: Theory & cases: An integrated approach. Cengage Learning.