Signature Assignment: Strategic Plan - Implementation Plan, Strategic Controls, and Contingency Plan Analysis

Introduction

Author (2016) states that a company’s value and ability to sustain competitive advantage through its ability to "devise new resources and reconfigure existing ones to address issues that arise in the external environment. Environmental scanning is defined as the act of scanning and acquiring information about relationships and events in the external environment that have importance for charting and achieving the organization's strategic goal and mission (Ciaran Heavey, 2009). Therefore, the organization needs to conduct environmental scanning by also investigating how other firms interpret environmental signals.

Ciaran (2009) states that environmental scanning has become paramount due to the increase in complexity, dynamic environment, and competitiveness that are spearheaded by the global forces, customers, channels, and transferable marketing. The author also mentions global cost drivers which are economies of scale, scope, learning, and experience(Ciaran Heavey, 2009). Besides, Yu et al. (2019) give examples of models used in environmental scanning that is (SIAP) scanning, interpreting action and performance model, and (OIPT) organization, information processing theory can be used as a metric to explain environmental scan performance.

Also, environmental scanning is fundamental to many vital strategic processes, including planning, decision making, innovation, and organizational design (Ciaran Heavey, 2009). Some of the advantages associated with environmental scanning include fast response to changes with consumer demand, supply disruption risks, and realigning the supply resources with the environment (Yu, 2016). This paper aims to discuss how environment scanning is used by South West airlines to sustain its competitive advantage within their target market

Southwest Airlines external environment.

Southwest Airlines is one of the low-fare passenger airlines that provide services in the US and near international markets. The company serves 97 destinations in 40 states and international destinations, including Jamaica, Mexico, Bahama, Aruba, among others. Southwest is primarily operated by one segment, which is the passenger and freight transportation services; the company provides point to point air transportation service. Therefore, the company is high frequency, short-haul routes with nonstop long-haul hauls for designated states and cities (MarketLine Industry Profile, 2017). 

Challenges Facing Southwest airline

1. Product innovation and supplier (economic and technological)

In Aviation, modern technology and advance innovations are a force that affects operations and drives for change. Southwest, among all other airlines, are heavily dependent on the systems that are subjected to advancements from innovation (Riwo-Abudho, 2013). The manufactures of Boeing are dedicated to innovation; therefore, they produce modern planes and engines through their R&D; Boeing is the majority carrier for Southwest. Therefore, southwest is faced with the challenge of upgrading their planes and systems that requires much investment of resources. Also, other cost includes communications systems, maintenance, insurance, and training. (Riwo-Abudho, 2013).

2. Reputation (Social)

Like all businesses, Southwest depends on its good name to retain and acquire more customers. However, in the event of bad publicity can be detrimental to the firm. Some of the recent notable scandals for Southwest airlines include:

.1 engine problems in 04/17/2018 that resulted in a death

2. flights delays where Southwest was forced to ground 34 planes on their busiest travel weekend 11/26/2018

3. Baggage's issues; an employee was caught on camera tossing baggage's haphazardly

4. price increase, the company is under pressure for quality services due to the recent increase in airfare and lastly safety and violations;

5. the company was caught falsifying safety reports in conjunction with the FAA. The very reports that assure consumers that the planes are safe. The airline had to pay $7.5 million in fines (Biggest Southwest Scandals, 2018).

a. Enlightened consumers

It is a norm for all companies to understand their target consumers' needs and is obligated to incorporate them into their services or products. The global market has become easily accessible to consumers due to the internet. Therefore, the internet has become a platform that is an opportunity at the same time, a threat. The internet has provided an opportunity for consumers to shop around for the best price and airline. Therefore, Southwest has the responsibility of ensuring that they sustain their competitive advantage by conducting frequent environmental scans; to access new markets and profit opportunities (Riwo-Abudho, 2013).

3. Competition: strategic alliance s and bankruptcies Political

Most airlines have strategic strike alliances to which has ultimately led to stiff competition to non-members; also, with an added advantage of operating in an environment where competitors are under bankrupt protection, which creates uneven grounds for competition. "The alliances pose threats to routes within which they would fly"(Riwo-Abudho, 2013). However, Southwest has not established any alliances; as a result, Southwest is under immense strain to maintain its position in the industry while running a smaller fleet (Southwest Airlines Co. SWOT Analysis, 2019).

4. Increased expenses: labor, fuel and security measures

All Airlines, including Southwest, included overly depend on the insurance payouts; due to the constant innovations and advancement of equipment, facilities, and " advents of jets meant more seat to sell" (Riwo-Abudho, 2013). Also, due to terrorist threats, security measures have become a vital variable to airlines; also, airlines are losing money since people are using other forms of transportation for travel. Also, the fuel cost has soared due to the political instability that has prevailed in oil-producing countries. Therefore, Southwest is facing an unpredictable environment that has rapid changes with different variables. Therefore, strategic managers need to conduct regular environment scanning to come up with ways of mitigating different scenarios (Riwo-Abudho, 2013).

Inconclusion

Southwest has the challenge of ensuring it sustains its competitive advantage by maintaining its target market position while growing its market share. The marketing department has to continue adding face value to the company by ensuring that there deliver their services and amenities as advertised. The Southwest airlines have been able to stick to its mission of providing low fare for more than 30 years and has focused on teams' spirit and other strategies; therefore, the company needs to ensure that their strategies are keeping up with the dynamic market trends (Riwo-Abudho, 2013).

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