Strategic Audit Report Template

EXECUTIVE SUMMARY 4

Executive Summary

James C. Goggans

Embry Riddle Aeronautical University

MGMT 436, Strategic Management

Prof. Robert E. Rue

29 August 2021

Executive Summary

Southwest Airlines was established in 1967 and is famously known for its low-carrier strategy in the US. The company has gained a competitive advantage over time due to its exceptional customer service, enabling the company to register consistent profitability for years. This executive summary summarizes its strategic report, capturing essential elements, including its corporate social responsibility, marketing message, business, and corporate strategies, SWOT analysis, corporate governance, and Evaluation and Control. Based on the findings of the report, the company has a positive brand image and offers high-quality services at low prices (Dias, 2020). While it may be facing some challenges, there is an opportunity for better performance.

The company has a social responsibility slogan that challenges the company always to do the right thing for the community, employees, customers, and other stakeholders. The company gives back to the community through share-the-spirit programs such as donations and scholarships. The company is also dedicated to keeping customers and the entire community safe through indiscriminative employment, and the fun-loving attitude makes the organization a safe place for all (Cote, 2018). The company has outstanding corporate governance policies that hold the board of directors to the highest integrity, objectivity, wise decision-making, and other ethical standards.

The company has a set of strengths that contribute to its outstanding performance. These strengths include a Luv culture, lower costs, a suitable environment for employees, a high brand value, and global admiration. However, the company also experiences overdependence on Boeing 737s, limited diversification, dependence on the domestic market, increased operational costs, and ineffective feedback mechanism (Chishty-Mujahid, 2017). Externally, the company has an opportunity to expand routes, upgrade the fleet, restructuring the cost model, deploying low-cost airlines, and expanding its social amenities. Southwest Airlines faces threats from the current pandemic, fuel price fluctuation, stiff competition, a demanding legal environment, and increased remote working. Despite these threats, the company is determined to utilize these opportunities and enhance its market share and performance.

The company deploys differential and cost-leadership strategies as business-level and corporate-level strategies, respectively. The integration of differentiation and low cost reduces the cost of production, resulting in higher profits. The company also utilizes cost-leadership to ensure it offers the best services to customers, making them choose this company over others. The company's marketing messages briefly mark Southwest Airlines as the most loved and flown airline with the best customer experience. Lastly, Southwest Airlines deploy input, output, and behavioral mechanisms to balance corporate culture and performance (Cote, 2018). These mechanisms contribute to a safe environment for all stakeholders.

References

Cote, R. (2018). Leadership Analysis: Southwest Airlines-Herb Kelleher, CEO. Journal of Leadership, Accountability & Ethics, 15(1).

Chishty-Mujahid, N. (2017). Southwest airlines’ successful economistic, cost-leadership strategy examined in light of Paul Lawrence’s renewed Darwinian theory: an analysis. Journal of Global Business Insights, 2(2), 115-123.

Dias, R. S. (2020). Southwest Airlines Co.: consistency for the future (Doctoral dissertation).