MGMT615 Strategic Planning- two questions with a minimum of 500 words for each

Hello,

 

I need help with an assignment for a strategic planning class. There are two questions total (assignment 1 and assignment 2) that need to be answered. They need to be a minimum of 500 words each. The references need to be listed in APA format. I need by tomorrow night Thursday 1/17 by 7pm (EST).

 

Assignment # 1 (link to article is in the attachment)

(1) identifying all the pertinent issues that management needs to address, (2) perform whatever analysis and evaluation (e.g.,

Five Forces

,

SWOT

,

PESTLE

,

financial ratios

, etc.) as appropriate, and (3) propose an action plan and set of recommendations addressing the issues you have identified.

Specifically, address what grade would you give Southwest management for the job it has done in crafting the company’s strategy? Why? What is it that you like or dislike about the strategy? Why? Does Southwest have a winning strategy? Why or why not?

 

Assignment #2

Does the AirTran acquisition make good strategic sense for Southwest? What strategic issues and problems do Gary Kelly and Southwest executives need to address as they proceed to close the deal with AirTran and contemplate how best to integrate AirTran’s operations and AirTran’s employees into Southwest? What weaknesses or problems do you see at Southwest Airlines?

 

Gain an Understanding of the Case Study
I suggest you do the following:
1. Download and read the “

Guide to Case Analysis

” in the Resources area located under Course Tools to the left of the screen.
2. Read the Case Study in your textbook entitled “Southwest Airlines in 2010: Culture, Values, and Operating Practices.” I found a slide show of the case study-

3. View the following videos and visit the following websites to gain a thorough understanding of the case and supporting materials.

a. A Day in the Life of Culture Committee –

http://www.youtube.com/watch?v=V7P0T9IbYKU

b. LUV in the Workplace –

http://highered.mcgraw-hill.com/sites/0070620105/student_view0/videos.html

c. Southwest Airlines –

http://www.southwest.com

Prepare a Written Case Analysis

Once you have a thorough understanding of Southwest Airlines write a case analysis (1) identifying all the pertinent issues that management needs to address, (2) perform whatever analysis and evaluation (e.g.,

Five Forces

,

SWOT

,

PESTLE

,

financial ratios

, etc.) as appropriate, and (3) propose an action plan and set of recommendations addressing the issues you have identified.

Specifically, address what grade would you give Southwest management for the job it has done in crafting the company’s strategy? Why? What is it that you like or dislike about the strategy? Why? Does Southwest have a winning strategy? Why or why not?

The required minimum number of words for initial postings to each discussion question each week is 500.

Does the AirTran acquisition make good strategic sense for Southwest? What strategic issues and problems do Gary Kelly and Southwest executives need to address as they proceed to close the deal with AirTran and contemplate how best to integrate AirTran’s operations and AirTran’s employees into Southwest? What weaknesses or problems do you see at Southwest Airlines?
The required minimum number of words for initial postings to each discussion question each week is 500

I provided a few articles below on different view points.

http://www.thebeat.travel/post/2010/10/01/Southwests-Acquisition-Of-AirTran-Why-Theyre-Doing-It-And-Why-You-Should-Care.aspx

http://www.thebeat.travel/post/2010/10/01/Southwests-Acquisition-Of-AirTran-Why-Theyre-Doing-It-And-Why-You-Should-Care.aspx

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2614

http://www.dallasnews.com/travel/columnists/tom-parsons/20101010-What-Southwest-s-purchase-of-AirTran-5821.ece

Sample1

Southwest initiated its first flights in 1971 with round trip low-fare flights between three cities, Dallas, San Antonio, and Houston (Thompson and Gamble, 2010). Today however, Southwest serves seventy-eight cities, all of them domestic, most of them medium sized, from Akron, Ohio to West Palm Beach, Florida (Popular, n.d.). Along the way, Southwest engaged in a variety of efforts to enhance its visibility and to mobilize more passengers.

Two of those efforts, although entirely acceptable in the era, would likely raise some politically correct eyebrows in these hyper sensitive times. First, according to Thompson and Gamble (2010), they had their “flight hostesses dress in colorful hot pants and white knee-high boots with high heels” (p. C-278). These skimpily dressed young ladies likely drew a large crowd of businessmen to Southwest. Southwest also served free alcoholic beverages during daytime flights and in 1973, offered complimentary bottles of premium liquors with the purchase of a ticket for a brief period (Thompson and Gamble, 2010).

Some more conventional marketing efforts included catchy advertising campaigns, 10-minute turn-around times by having their ground crews multi-task, the creation of the two-tier on-peak/off-peak pricing structure and the reduction of travel time to and from the large cities by maintaining their locations in the older downtown airports (Thompson and Gamble, 2010).

These days, “Southwest, which flies more domestic passengers than any other U.S. airline, is going international” (Jones, 2012). Jones (2012) reports that after buying AirTran, Southwest, has picked up its routes to Mexico and the Caribbean. This is a shift in strategy for Southwest, which has focused on reliable low-priced service within the United States, is poised to expand into these areas with footholds in Texas and in Atlanta.

Legal and Regulatory Hurdles

Starting in the 70s, through today, Southwest has been embroiled in a continuing series of legal proceedings and regulatory hurdles, overcoming most of them. Its current legal issues include a complaint filed against AirTran (now owned by Southwest) for a violation of the Sherman Act in which it is alleged that AirTran conspired with Delta to monopolize air travel in imposing a $15.00 –per-bag fee for the first item of checked baggage, amongst other issues. Additionally, Southwest is continuously subjected to a variety of proceedings and claims arising from the ordinary course of business, including IRS examination (Southwest, 2012).

SWOT Analysis

Strengths: Southwest Airlines has great relations with its unions. Their low-cost and efficient method of operations lends itself to lower fares. Southwest’s people management practices and the corporate culture keep their employees happy which, in turn, keeps the customers happy. With rare exception, Southwest maintains “one of the safest operations in the world” (Thompson and Gamble, 2010, p. C-306).

Weaknesses: Most southwest employees belong to a union. When there is a union, there is always the possibility of strikes or lockouts, which can be disruptive and costly. Southwest does not offer the frills that many other airlines offer such as lounges, movies, etc. Southwest offers only one class of seating, cattle call. You cannot book a flight on outlets such as Expedia or Orbit, you must use their website.

Opportunities: Continued expansion into the international market. Southwest can achieve this through acquisitions, such as the recent AirTran acquisition which brought them to Mexico and the Caribbean. Southwest can move beyond its self-imposed limitation of using only the 747 and use more recent plane technology, such as the Dreamliner.

Threats: Increases in fuel prices will either threaten fare prices or reduce the number of customers. Southwest, like all airlines, is faced with the ever-growing number of government regulations which can increase fares. The saturation of the industry with competition hurts profitability.

Action plan and set of recommendations

Continue to expand internationally

Thompson, Peteraf, Gamble, and Strickland (2012) list a number of reasons for international expansion, including access to new customers, lower costs through economies of scale, to exploit core competencies, to gain access to capabilities in foreign markets, and to spread risks across a wider market base. As the U.S. domestic market is increasingly saturated with low-cost providers, by expanding internationally, Southwest will find customers abroad and retain its position as a leader in the industry.

Maintain a corporate culture that fosters loyalty and commitment

Thompson and Gamble (2010) note that the culture at Southwest Airlines “fostered high labor productivity and contributed to Southwest’s having low labor costs in comparison to the labor costs of at its principal domestic rivals” (p. C-305). Corporate culture exerts profound influences on employees. It stands to reason then, that a good corporate culture will exert positive influences on employees, which can lead to corporate success. Corporate culture can help leaders with stability and control, competitiveness and productivity, flexibility, cohesion, and innovation. Greenberg (2010) in discussing culture states, “relative to other companies in their fields, those with strongest corporate cultures tend to have the best financial performance” (p. 348).

Sustain a state of good labor relations

Thompson and Gamble (2010) note Southwest is “one of the most highly unionized U.S. airlines” (p. C-301). An ever-present killer of a good corporate culture is the employee union(s). Morgan (1998) notes “foremost among all organizational countercultures are those fostered by trade unions” opining that “unions are in effect countercultures in the sense that their existence stems from the fact that the interests of the employee and employer may not be synonymous” (p. 131). By encouraging union members and negotiators to research their pressing issues and to conduct employee surveys before each contract negotiation” (Thompson and Gamble, 2010, p. C-302) as well as non-restrictive work rules and broad job classifications, Southwest will continue to foster a culture of loyalty and commitment.

Strategy

The recent acquisition of AirTran, the All-New Rapid Rewards frequent flyer program, and a plan to modify its reservation system to include international destinations and provide enhanced customer service all serve as a defense against high fuel prices and the bad economy. Replacing older Boeing 737 planes with the larger and more fuel-efficient Boeing 737-800 and plans to use the new fuel-efficient model Boeing 737 Max for expansion to locations of greater distance, will enhance profitability. In partnership with the Mexican carrier Volaris, Southwest provides service that allows passengers to book international flights by connecting with Volaris through most Southwest-served cities. Volaris flies to Mexico City, Guadalajara, and Aguascalientes (Anonymous, 2013).

I give Southwest a B+ for its strategy. I would have gone higher except having flown on Southwest, I often feel the cattle-call aspect of their methods and get the impression that I’m on an urban bus ride while in flight.

References

Anonymous. (2013, January 2). Apple, inc. [Snapshot]. In Hoovers. Retrieved January 6, 2013, from LexisNexis Academic website: http://www.lexisnexis.com.ezproxy1.apus.edu/hottopics/lnacademic/?

Greenberg, J. (2010). Managing behavior in organizations. (5th ed.). Prentice Hall: Upper Saddle River, NJ

Jones, C. (2012, May 23). Domestic giant southwest sticks nose into international air. USA Today. Retrieved from http://travel.usatoday.com/flights/story/2012-05-23/Domestic-giant-Southwest-sticks-nose-into-international-air/55174412/1

Morgan, G. (1998). Images of organization. (The Executive Edition). Berret-Koehler Publishers, Inc: San Francisco, CA

Popular routes and destinations. (n.d.). In Southwest.com. Retrieved January 11, 2013, from http://www.southwest.com/html/air/routes/index.html?int=GFOOTER-DIFFERENCE-ROUTES

Southwest Airlines CO [Form 10-Q (Quarterly Report)]. (2012, October 26). In Edgar Online. Retrieved January 11, 2013, from http://www.southwest.com/

Thompson, A. & Gamble, J. (2010). Southwest airlines in 2010: Culture, values, and operating practices. In A. Thompson, M. Peteraf, J. Gamble, & A. Strickland (Eds), Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (pp. C276-C309). New York, NY: McGraw Hill

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2012). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (18th ed.). New York, NY: McGra

Sample #2

Southwest Airlines began operations in 1971 flying between three Texas cities – Houston, San Antonio and Dallas. Southwest introduced the theory of low-fare flying offering $20 one-way flights. These low fares attracted businessman and leisure travelers alike, slowly skyrocketing Southwest into success. A SWOT analysis will be conducted, as well as an action plan for continued growth and development.

Strengths

· Focus on safety with Chief Executive Officer (CEO) Gary Kelly stating their objective for Southwest was “to be the safest, most efficient, and most reliable airline in the world” (Thompson, Peteraf, Gamble & Strickland, 2012, p. C-306).

· Industry leading employee productivity with a turnaround time of 25 to 30 minutes on an industry average of 45 minutes (Thompson et al., 2012).

· Southwest is a company focused on having a strong culture and one where the employee comes first rather than the customer.

· Relationship with union representation

· Internal advancement with 80 to 90 percent of supervisory positions being filled with internal applicants (Thompson et al., 2012).

· Focus on training with each specific job requiring a certain number of training hours, many above FAA standards.

· Operating on only one aircraft the Boeing-737. This minimizes training costs and keeps the need for spare parts for various planes down to a minimum.

·

Weaknesses

· 82% of Southwest’s employees are members of a union (Thompson et al., 2012).

· Flights are only within the United States.

· Southwest does not offer the perks that other airlines offer such as member lounges and upgraded seating.

· Purchase of tickets is only available directly through Southwest via phone or internet.

· Southwest flies only a select number of airplanes limiting the number of passengers that can be carried.

· Putting the employee over the customer could make the customer feel less valued.

Opportunities

· Flights to more cities

· International flight

· Closer look at overselling and mishandled baggage. Southwest ranks second out of the 8 leading Airlines with mishandled and third in overselling their airplanes.

· Baggage transfers are not available for flyers with connecting flights.

Threats

· Rival airlines trying to offer similar deals.

· Increased fuel prices potentially deterring customers

· Decline in air travel due to fear of flying post-911

Action Plan:

· The Research & Development team should begin looking at popular international markets. Through research on top travel destinations and average number of flyers Southwest can alternate the number of flights available to different international hubs based on peak travel times.

· Continue to focus on “Living the Southwest Way” through continued personal development and training.

· Begin offering baggage transfers to individuals with connecting flights. Traveling can be stressful, by offering to transfer customer bags to connecting flights Southwest would help reduce some of the stress travelers feel with making a connecting flight. To achieve this Southwest would have to partner with other airlines, building industry relationships.

The management at Southwest has done a great job building the company into one that is successful. Based on the findings in this case Southwest would receive a ‘B’ rating. While their corporate culture is one to be applauded and is apparent with having some of the lowest turnover rates in the airline industry; Southwest still fails to deliver on the full customer experience.

One area in which Southwest should look at is the way in which they board their planes. Thompson et al. (2012) compared the boarding process of Southwest to that of a “cattle-call”. This is something that needs to be looked at throughout the airline industry, but for Southwest the use of colored paddles and letters on boarding passes give the customer a degrading feeling. With their innovative way of thinking and ability to go where their competitors don’t the team at Southwest could make boarding a plane as fun as waiting for one.

ReferenceThompson, A., Peteraf, M., Strickland, A., & Gamble, J. (2012). Crafting and Executing Strategy; The Quest for Competitive Advantage: Concepts and Cases, 18ed. New York, NY: McGraw-Hill Irwin.

Sample 3

Southwest Airlines has been my favorite airline since I can remember and the discussion questions and case study forced me to reexamine why I LUV them so much from not only a studen’ts point of view but also from having been a customer. No baggage fees, their “Wanna Get Away” fares, Southwest has really opened the market to entice travelers who normally wouldn’t fly vs drive but because the fares are so comparable you can’t resist. As a Rapid Rewards member for five years now, the benefits to being loyal to this airline company have paid dividends for my travel. I like it so much I have even opened a credit card with them to earn extra points. Whether it is flying to Vegas to get a way for the weekend or trying to get home to see family for the holidays, Southwest consistently offers the lowest fares without compromising food, service or their awesome flight attendants. “Southwest Airlines is the nation’s largest carrier in terms of originating domestic passengers boarded and has recently acquired AirTran Airways, now a wholly owned subsidiary of Southwest Airlines Co. Southwest serves 72 cities in 37 states and is one of the most honored airlines in the world known for its commitment to the triple bottom line of Performance, People, and Planet” (Anonymous). Southwest Airlines’ announcement to acquire all of the outstanding common stock of AirTran Airways went public September of 2010. This acquisition of AirTran, a company with a similar business strategy of low fares was a great acquisition on Southwest’s part. By acquiring AirTran Airways, Southwest has been able to offer flights to an estimated 2 million more customers to additional airports. “The Southwest and AirTran Flight Attendants have proven they can rally together for the greater good of Southwest Airlines. I’m proud to lead such a passionate and committed work group, and we’re ready for all the exciting things to come” (Anonymous). With the acquisition of AirTran they have added an additional 8,033 employees, 138 aircraft, and 177 nonstop routes (Thompson, 2012). Integration of the AirTran employees into the culture of Southwest Airlines is definitely going to be the biggest challenge for Southwest to overcome. AirTran will need to be able to identify with the fun-luving culture Southwest has created and capitalized on for over thirty years. Southwest may encounter problems with instilling the culture of the Southwest airline among the AirTran employees. Although, initial reports of the integration have been overwhelmingly positive. Other than that, all I can predict for Southwest are great things on the horizon.

References:

D’Aurizio, P. (2008). Southwest airlines: Lessons in loyalty. Nursing Economics, 26(6), 389-92. Retrieved from http://search.proquest.com/docview/236938323?accountid=8289

Southwest airlines; southwest airlines and airtran airways flight attendants ratify seniority integration agreement. (2012). Transportation Business Journal, , 94. Retrieved from http://search.proquest.com/docview/920437654?accountid=8289

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2012). Crafting and Executing Strategy The Quest for Competitive Advantage Concepts and Cases. New York, New York: McGraw- Hill/Irwin

Does the AirTran acquisition make good strategic sense for Southwest?

Yes. By acquiring AirTran, Southwest eliminates its major competitor. Thompson, Peteraf, Gamble, and Strickland (2012) suggest “a company can refresh and strengthen its competencies by acquiring another company with attractive resources and capabilities” (p. 342). What resources and capabilities does the AirTran acquisition bring to Southwest? When a company makes an acquisition, it obtains assets. According to Thompson and Gamble (2010), Southwest obtained the following resources, capabilities, and assets:

70 Airports, only 19 of which Southwest already served

Atlanta’s Hartsfield-Jackson International Airport, not previously served by Southwest (“Approximately half of AirTran Airways’ flights originate or terminate at its largest base of operation in Atlanta, Georgia” [Anonymous, 2013]).

Service to Mexico and the Caribbean, which helps in Southwest’s international expansion efforts

138 more aircraft of various types

177 nonstop routes

Additionally, to obtain this growth internally/organically would take time. Thompson et al (2012) note “capabilities-motivated acquisitions are essential (1) when a market opportune opportunity can slip by faster than a needed capability can be created internally and (2) when industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence” (p. 342).

What strategic issues and problems do Gary Kelly and Southwest executives need to address as they proceed to close the deal with AirTran and contemplate how best to integrate AirTran’s operations and AirTran’s employees into Southwest?

Pilarski (2010) noted that Southwest’s “character was so distinct that it was deemed better to hire new people and indoctrinate them rather than acquire and reform others”. However, as a result of this acquisition, Southwest acquired over 8,000 AirTran employees. Thompson and Gamble (2010) noted that “the combined organization would have nearly 43,000 employees” (p. C-308). You simply cannot fire all of them. There are a multitude of integration issues and problems that can result from an acquisition not least amongst them the stress, management problems, and culture clashes that may occur. There will be some cynicism and mistrust associated with the merging of the two companies, particularly among those from AirTran. There will be considerable resistance to change even though change will be required to adjust to the new organizational structure. There will be some burnout as a result of the stress associated with the changes. Additionally, there will inevitably be issues concerning the integration of the various employee unions especially where rules, policies, seniority, Salaries, Wages, Benefits, and training are concerned.

Operationally, there will be a need to eliminate redundancies, overlap, and waste. Southwest will likely need to sell off some aircraft, eliminate some routes, and terminate some previous AirTran contracts. There will be the need for licensing agreements, landing fee renegotiations, and a consolidation of maintenance activities. Supply chain and logistical support issues will also require some retooling.

What weaknesses or problems do you see at Southwest Airlines?

Pilarski (2010) suggests that the acquisition is based on Southwest’s need to survive and suggests that without similar competition, Southwest will likely raise its fares. Southwest (2012) notes Southwest “is expected to continue to incur substantial integration and transition expenses in connection with the AirTran acquisition, including the necessary costs associated with integrating the operations of the two companies”. In the near term, these expenses have the potential to “exceed the financial benefits that the Company expects to achieve from the AirTran acquisition and could continue to result in the Company taking significant charges against earnings during the integration process” (Southwest, 2012).

References

Pilarski, A. (2010). Pilarski: Southwest’s acquisition of AirTran. Airfinance Journal (Online), Retrieved from http://search.proquest.com/docview/865232622?accountid=8289

Southwest Airlines CO [Form 10-Q (Quarterly Report)]. (2012, October 26). In Edgar Online. Retrieved January 11, 2013, from http://www.southwest.com/

Thompson, A. & Gamble, J. (2010). Southwest airlines in 2010: Culture, values, and operating practices. In A. Thompson, M. Peteraf, J. Gamble, & A. Strickland (Eds), Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (pp. C276-C309). New York, NY: McGraw Hill

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2012). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (18th ed.). New York, NY: McGraw-Hill Irwin.