Stakeholder Analyst. (Job C) Identifies the primary and secondary stakeholders in the
case. You will also discuss their "stakes" or claims. Which stakeholders have the most
power? Are the claims legitimate?
Southwest Airline Company is an airline company which is primarily based in the
United States. The airline company is well known for its low price fares, point-topoint services and turnaround time. For Southwest Airline Company to thrive in such
a competitive environment, the company has established standards of efficiency for
them to be profitable. The company has both the primary and secondary stakeholders
who facilitate the existence of the company. To begin with is the primary
stakeholders who consist of the international and domestic customers, the company
employees and the investors.
The employees of Southwest airline are the critical factor that makes the company's
operations to run efficiently and smoothly. The company believes that if they treat
their employees well, then they will create a chain reaction in other stakeholders. By
treating their employees fairly, they are guaranteed that the employees will treat the
customers well which will, in turn, lead to high profitability (Bowen et al., 2016).
Southwest airline relies entirely on the employees to demonstrate their commitment
to the company and a drive and desire to make their company successful. Southwest
airline will have both the international and domestic employees as their stakeholders
following their international expansion. Empowering the local employees and makes
them proud of their work in the company will make them transfer the environment
to their development overseas. Foreign and domestic customers as the next primary
stakeholders, Southwest airline has loyal customers in the country such that they had
an 18.8% market share in 2015. Due to its sharp focus on customer services they have
a large customer market (Bowen et al., 2016).
A-list program, A-list preferred program, Rapid Rewards program is one of the largest
contributors of customer loyalty. The current target market for the company are the
college-age students, frequent travelers, and business travelers. The target market is,
however, expanding to make short distance international flights to places like the
Caribbean and Mexico. Finally, the last primary stakeholder of Southwest airline is
the investors; they are seen to play a vital role especially in the international
expansion of the company. The company was able to return $1.4 billion to the
investors which consisted of $1.2 billion of common stock and $180 million
The company in recent years has also been experiencing a rise in the amount of
money per share that they pay out as dividends (Bowen et al., 2016). The financials of
the company have always been a strength and will play a fundamental role in
international market expansion. Aircraft manufacturers are the secondary
stakeholders of Southwest airline. During the analysis for this company, we can found
that the company had a weakness of being reliant on one aircraft manufacturers. The
company relies on Boeing for purchases of the aircraft spare parts, aircraft purchases
and support for its fleet. Boeing is the secondary stakeholder for the company, and it
will continue to be an instrumental figure in the expansion efforts of Southwest
airline. Because Southwest Airline generates a lot of revenue to Boeing, it means that
Boeing will have a vested interest in the company’s future plans (Voigt et al., 2017).
Bowen, B. D., & Headley, D. E. (2016). Airline quality rating 2016: The 26th year
reporting airline performance.
Voigt, K. I., Buliga, O., & Michl, K. (2017). Pioneer in the Skies: The Case of
Southwest Airlines. In Business Model Pioneers (pp. 171-184). Springer, Cham.
Environmental Analyst - (Job D) (Focuses on trends in the six segments of the
general environment including technological, demographic trends, economic trends,
political trends, social cultural trends, & global trends)
Shifts in the macro-environment factors lead to a direct effect on all the Regional airlines.
The changes in the macro-environment factors affect the Porters Five Forces which are
responsible for shaping the competitiveness of a company. They can affect the service
industry or an individual firm in the industry. The analysis of PESTEL provides the
operating challenges that Southwest airline faces in the prevailing macro-environment
factors. In a steady growth trajectory an industry should be profitable; however, this is
not the case for Southwest airline because it exists in an unstable political environment
(Wurthmann, 2019). Politics play a vital role in determining the political factors that can
impact Southwest airline in a particular market. Southwest Airline Company exposes
itself to a variety of political system risks and political environment because it operates in
Regional airline business in more than a dozen countries. To make sure that they succeed
in their business they have to diversify the political system risks in those countries they
There are also economic factors that impact the company that is factors such as inflation
rate, foreign exchange, interest rate, and savings rate. The economic cycle determines the
aggregate investment and demand in the economy. The company can use the economic
factors of a country they operate to predict the growth trajectory of not only their industry
but also the organization. Southwest company need to look into such factors like
government interventions, the economic system of the country, economic growth rate,
unemployment rate, inflation, the comparative advantage of the host country,
infrastructure quality in the Regional Airlines, the efficiency of the financial markets and
the interest rates to develop a good strategy. The culture of society also impacts the way a
company operates in a specific environment (Wurthmann, 2019). The shared beliefs of a
certain community or social groups determine how the marketers of Southwest airline
will approach the customers. They have to develop and design the marketing messages
for the Regional airline industry after understanding the customers.
The leaders of the company should analyze factors such as demographic and the skills of
a population, culture, class structure and attitudes of the given society. Reviewing how
technology affects Southwest airline, it is good to understand that technology is
disrupting in various industries. Therefore a company should not only do an analysis of
technology exclusively but also the speed at which the industry is being disrupted by
technology. Slow speed technological change may give the company more time to
automate, but a high-speed technology will provide less time for automation. Southwest
focuses on technological changes in the industry to make sure they are at par with the
other competitors (Wurthmann, 2019). Globally in some of the countries that the
company operates in, no robust legal framework is capable of protecting the intellectual
property rights of the company. Southwest Airline Company has to, therefore, evaluate
the legal framework well before entering into a particular market. This way they will be
able to eliminate any threat to theft of their secrets which can affect competitiveness.
Wurthmann, K. (2019). The essential mix: six tools for strategy-making in the next
decade. Journal of Business Strategy.
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