Strategic Management and Strategic Competitiveness
BUS 499 Business Administration- Capstone
Strayer University- Maitland Campus
April 13, 2014
The purpose of the paper is to research and understand how the changes of globalization and technology have impacted the Airline industry. This paper will also apply the industrial organization model and the resource-based model to determine how the Airline industry earn above-average returns. This paper will explain how the Airline industry’s success is through its mission and vision statements with Southwest Airlines as an example. Finally, this paper will evaluate how the importance each category of ...view middle of the document...
Travelers can even purchase their tickets through independent websites like Cheapoair.com, Kayak.com and many other third party competitors. With the advancements of technology, airline companies and passengers no longer have to use travel agents or agencies to book travel. This helps in reducing cost in unnecessary paperwork and unfortunately it reduces some employment positions that at one time were responsible for booking travel (Yang, 2001).
Industrial organization model and the resource-based model.
Since the Airline Deregulation Act of 1978, (Thomas, 1982), the airline industry has had numerous years of low profits. With the changes that occurred from the 1978 act, many other competitors came into the new market causing a decrease in airfares for customers due to the new deregulation (Kroo, 1999). This allowed the airline industry to have a new competitive financial impact in their market. With the increase of fuel cost, the airline industry is not the first choice to travelers. High fuel are a determining aspect preparing and planning trips for travel. The cost of airfare and customer service is a key concept as well. There are ways the airline industry can take a look at what they are currently doing and then evaluate their current strategy. They need to place together a solid condition analysis. By doing this, it should disclose any issues in their current strategy the airline industry is currently doing. This analysis should minimize any adjustments or changes that may need to be corrected so the airline industry can maintain its competitiveness (Southwest Airlines, 2008). Another important aspect the airline industry needs to incorporate and understand is the internal resources of the strengths and weaknesses of what they can offer to their clientele (Shevell, 1999). The use of external market opportunities and threats can be very important in creating and making a good strategy. For airlines to be successful, they need to find ways of lowering their costs while increasing and maximizing profits. The Airline industry are cutting cost without having to cut back on customer service like in allowing a certain amount of luggage being free and checking in bags at curbside rather than at the gate. By doing these small cutbacks, this can help the airline industry in maintaining above-average in returns.
Vision and mission statement.
Southwest Airlines is an airline that focuses on their mission and vision statement (Southwest Airlines, 2008). Gary Kelly, Chairman, President and CEO of Southwest Airlines in his 2008 Southwest Cares report, their mission and vision statement clearly states, “To better understand why we at Southwest try to do the right thing, it is important to understand how we do business and how we integrate our Core Values into everything we do. It is the Southwest Culture that sets us apart (Southwest Airlines, 2008).” This statement displays loyalty to Southwest Airlines customers and their...