Southwest airlines operate in a competitive market that affirms the significance of analyzing its environment to identify effective strategies that can increase its success. A conducting a SWOT analysis of the company can help one identify its potential and limitations thus adopting informed interventions. With this information, a strategist is able to manage the company’s environment appropriately while avoid potential risks. Analysis of the Company’s corporate social responsibility (CSR) will help it identify its competitiveness in the aspect of social entrepreneurship (Compart, 2008). This is essential in identifying how the business appears in the eyes of society. The paper presents a SWOT and an analysis of the corporate social responsibilities of the Southwest Airlines.
Critical evaluations highlight that Southwest Airline has a number of strengths. Initially, the company valuation is high. The earnings yield of the company stands at 14.10, which means the investors would prefer the airlines. The company also has a widespread market as it operates in over 72 cities. People from various regions have knowledge of the existence of the company’s services in the market. The company also pays quarterly dividends its shareholders, which increases the trust of the people in the company. A weakness of firm includes a relatively high debt. This means that a good portion of the earnings pays debts, which decreases the dividends to the shareholders (Compart, 2008). Furthermore, the operating expenses of the business are relatively high. The cost of fuel and paying the operators raises the cost of operation, which lowers the company’s net profit. At the same time, the price per product is high thus resulting to low sales as few customers can afford.
Besides, the working environment and the state of the business present various opportunities for the company. Initially, the airline has a large space for expansion because a number of cities in the United States of America are untapped. Furthermore, the company can capitalize on the negative image of other airline companies and increase their market share. The company can also attempt to engage in the acquisition for other airlines companies that are dying off. Adoption of these strategies has the potential of enhancing expansion. Threats challenging the operation of the Southwest Airline include stiff competitions and global economic crises. Stiff competitions force the company to engage in straining marketing to remain relevance while global economic challenges has potential of reducing global travels as people battles with harsh living standards. Furthermore, the company’s model of business is highly affected by the weather condition meaning that poor weather presents a threat to their activities.
Corporate culture and corporate social responsibility
The corporate and organizational culture of the airlines has played a major role in decisions adopted by the company. The company’s CSR model is based on four major considerations that include their planet, employees, suppliers and communities (Flamholtz, E., & Randle, 2011). The company attends to the views of the macro environment fully when formulating their marketing strategy. The company treats its customers as their bosses, attending to all their complaints in order to build loyalty. Furthermore, the organizational culture of the business instills confidence in the customers. The management of the company comprises of senior and lower level managers, who have a strict chain of command minimizing chances of the instances of power overlap in the company. Innovation is another part of the company treasured most by the management. The management encourages both internal and external innovation in the company (Compart, 2008). When an employee comes up with an idea, they get the full backing of the management ensuring successful implementation. Contests and competitions are also carried out in order to encourage external innovation. However, the company sieves the innovation ideas in order to avoid any disruptive innovation in the Southwest Airlines. This has fostered a culture of independent thinking that has developed the company’s reputation considerably.
The Southwest airlines company engages in a number of activities that highlight its sensitivity towards the idea of CSR. Firstly, the company carries out environment conservation plans in cities where it operates. The company participates in various activities that target protecting and improving the environment in the cities that they operate. For example, the company planted 2000 trees across the United States of America in 2011. Furthermore, the company constantly engages in street cleaning programs in order to alleviate the cleanliness of the towns.
The Southwest Airlines also engages in a number of programs to lower the poverty levels in the United States of America. Some economies have presented alarming unemployment rates that are often declared as a national disaster. The company has presented high degrees of commitment in helping economies address this challenge. The Southwest Airlines has fostered economic development by employing the local people. Moreover, the company offers individuals who present excellent performance sponsorships deals to learn and advance intellectually.
The company also organizes corporate competitions, which aim at rewarding the winners as a way of sharing their returns with the society (Compart, 2008). Furthermore, the business undertakes development of the infrastructure as a way of improving their operations. The firm also engages in peace missions and relief activities to countries and areas with instability. From the SWOT and corporate social responsibility analysis; it is apparent that Southwest airlines has high the potential of being successful in the future, if it takes advantage of its abilities and prospects while checking on its limitations and challenges.
Compart, A. (November 8, 2008). "LaGuardia The Target In Southwest ATA Bid". Aviationweek.com. The McGraw-Hill Companies.
Flamholtz, E., & Randle, Y. (2011). Corporate Culture: The Ultimate Strategic Asset. Palo Alto: Stanford University Press.