Environmental scan paper - Essay Example

Introduction - South West Airlines South West Airlines was founded in 1971 with four planes to start with. At that time, these planes were serving places such as Dallas, Houston and San Antonio. It is probably the 4th largest airlines in the whole United States. And in 1998, it constantly grabbed lucrative funds that no other airline has been able to achieve. Being one of the most reliable airlines of United States, it also got its name published in the Fortune magazine as a top ranking company which has been serving people since 1998.

Environmental Scan SWOT Analysis Strength: Southwest is largest airline in US. It is low cost toter and is managing 3400 flight in a day with 552 aircrafts. Weakness: It is working domestically and has no split up seating. It can carry a very small cargo. Opportunity: Expansion in its services to international level and advancement in the R & D can be great opportunities to increase its market shares. Threat: Noise reduction, Security from terrorism and increase in cost of fuel and oil is a great threat for it (Jones and George, 2010).

PEST Analysis Political: Political factors have great affect on the Airlines business. Government can impose heavy taxes and laws of environmental rules and protections. Economical: Economic factors have effect on the growth on Airlines business and can increase the interest. Socio-cultural: people are status conscious now a day therefore they prefer airlines to travel than other substitute. Technology: New invention and development in airlines business is a great opportunity to increase market shares and earn revenue (Aaker, 2001).

Porter’s five Forces Threat of substitute: Cars, trains and buses are best substitute but low cost tickets of Southwest Airlines, long distance and reason for trek has declined the importance of other substitute. Threat of Entry: Companies are disappeared or merged in other companies therefore it is not a very hard threat for it. Rivalry: many airlines industries has appeared and got the dominant position in the airline industry therefore it can affect the profitability of the Southwest Airlines.

Bargaining power of buyers: Buyers bargaining power is depend on the discount offers and negotiation power therefore it is very low. Bargaining power of Supplier: Suppliers bargaining power varies due to the demand and supply forces and unionization and profitability of the company (Aaker, 2001). Competitive Advantages of South West Airlines: Each and every company wants to preserve the competitive advantages over time, so they will never be able to get away from success. Some competitive advantages that air lines South West had are as follows: 1 - Time Punctuality with Flights - For many years, this airline made its journey to the smaller, less-traveled airports instead of choosing busy hubs.

But with a recent purchase of Air Tran, it will now be taking routes of busier places. This American airline always get you anywhere on time and this is why it is being favored by passengers. 2 - Consistency to the mark with planes - The airlines is dedicated to fly only one type of plane, which is the Boeing 737. By doing so, the airline has been able to save a good chunk of money which is to be spent later on. 3 - Passenger Experience – Up till now, Southwest Airlines serves you with the best available and cohesive cultures in the airline business.

You will never get bored once you are traveling in this airline; sometimes the crew also offers you games and sings songs for passengers. Value creation and sustaining competitive advantage through Business strategy Southwest airlines strategy is based under one shelter. If only you are capable enough to get your travelers to their destinations when they want to get there, on time with very economical fares, amazing customer service, creativity in airline technology, satisfaction and safety.

This is what the company has been following ever since it was started. The South West Airlines promises a reliable journey with an environment which has friendliness and sense of warmth. Using one type of plane all the time has helped them so much, a huge amount of money has been saved by not changing the type of aero planes and as a result, the capital of the company is sure to be increased (Jones and George, 2010). Measurement guideline to verify its strategic effectiveness South West Airlines started off with 4 planes in the bucket but gradually this airline has become a boss in the industry of airlines.

So do you know about the steps that were taken previously by this airline? Well, Southwest Airlines is largely favored for its in-flight environment with happy and content employees giving you a good time while on journey. The airline ensures you to be sent to your destination on time. The airlines CEO decided not to waste extra perk of money on changing the type of aero planes and passengers were satisfied by what they had from the beginning. With this guide line, the airline was able to grow its capital further on and has recently owned a brand new airbus (Jones and George, 2010).

How effective are the measurement guidelines It is important for any company to satisfy the customers/passengers in the first place. If you able to cope up with all that, then getting effective results from the guide lines would not be a problem. Southwest airlines ensure you good time-traveling and as well as a culture which you will remember always. The airline has a staff of people with nicest attitude level and a spirit to travel around the world (Jones and George, 2010). Introduction to AirTran Airways: AirTran Airways is an American airline which allots you very reasonable air fare rates and its headquarters is in Orlando Florida.

If you are one of those gypsies who like traveling around the world for business purpose then this is the airline which will satisfy all your needs. Currently, AirTran makes over 700 flights in eastern and Midwestern United States. The airlines fleet includes Boeing 717 which is probably the largest operator ever to be made and Boeing 737-700 aero planes. Passengers seem completely satisfied with the services that are rendered in this airline and lets hope that it may never go down with its standard.

Environmental Scan: SWOT Analysis Strength: Air Tans has 140 aircrafts, 9,000 crew members. It can manage the 700 flights in a day over 56 destinations. Today Boeing 737-700 is its one of the best fuel efficient aircraft flying. Weakness: incidents in Atlanta, Georgia and North Carolina since 1998 are major weaknesses that have the negative impact on its potential customers. Opportunity: merger can be a great opportunity for it, so that it can acquire great assets and other resources to increase market shares of the company.

Threat: cost of fuel and operating sources are the major threats for airlines. Strong competition with US other airlines is also a threat for Air Trans Airlines (Aaker, 2001). PEST Analysis Political: Government charges taxes for landing and on fuel due to the change in political factors Economical: economic factors can cause a rapid change in the interest rate, prices of the oil and fuel and it will affect on the economic performance of the company. Socio-cultural: Airlines should take safety precautions during landing and on boarding the flight.

People are status conscious and therefore have disposable income serve. Technological: with advancement in technology, R & D department is doing good work and air Trans is earning revenue b(Jones and George, 2010). Porter’s five Forces Threat of substitute: Car, Trains and buses are the substitute of airlines therefore Air Trans has moderate threat of substitute because Air Trans charges very low cost. Threat of Entry: Threat of entry is very high because of overcrowding in airports and industry is regulated very tightly.

Rivalry: US are over crowded with 34 airline companies therefore there exist an intense competition of price, cost and frequent flying program. Bargaining power of buyers: due to technological changes, deregulation and customers loyalty the bargaining power of the buyers is very high. Bargaining power of Supplier: Supplier bargaining power is high because of the differentiation in airline manufacturing and jet fuel; Suppliers are switched to other companies due to high cost (Jones and George, 2010).

Competitive advantages and strategies: AirTran has always been up with something special to be experienced by its passengers. As, it is habitual of brining in new in-flight ideas for the passengers, people have already started glorifying its services. Recently, Airtran started offering Wi-fi connectivity on every flight. With Gogo In-flight Internet, the team managed to work with Air cell to transform Cabins into Wi-fi Hotspots. The main tactical approach is that, it let passengers to continue common activities while traveling.

Passengers began to follow up this airline and up till now they seem content with it. The airline is dedicated to bring you the best in-flight experience with staff dealing you with friendliness and comfort (Kerin, et. al. 2010). Creating value and sustaining competitive advantage through business strategy AirTran started off with a large fleet of aero planes available in the service and makes around 700 flights on regular basis. Looking at these analyses so far, you may think that this service would charge a lot more than the other ones.

But, this has never been the case with AirTrans because it is offering you travel in cheap-dirty rates. Being the 7th largest airlines in United States, it is indeed very hard to cope up with ascending expense and unprofitable routes but still, the company is happily doing what they should be and is always the number one for passengers out there (Kerin, et. al. 2010). Measurement guidelines to verify its strategic effectiveness AirTran decided to give its passengers a forever remembered in-flight experience and they started offering features like wifi (Instant-messaging, E-mailing and access to work with network systems via laptops).

This change has also affected the traffic of passengers and AirTran admits itself. The airline has a staff with sparkling sense of humor and it does not let you get bored in the flights very easily. Every culture is assented and this is how you travel in AirTran airline. Enjoying these in-flight activities and being looked after by a staff of kind people is what you will find in AirTran (Kerin et. al., 2010). How effective are the measurement guidelines Being one of the largest airline services in United States, the AirTran airline must not do things that are not liked by passengers during traveling.

Bringing in Gogo and turning on the wi-fi connectivity has let passengers stay in touch with beloved ones while being in the planes. So now, listening songs, watching movies and playing online games are like a piece of cake for anyone traveling in AirTran (Kerin, et. al., 2010). AirTran has also mentioned that passenger traffic has enhanced ever since these new services were espoused by the airline. Now, it is being liked grandly around the world. References: Aaker, D. A. (2001) Developing Business Strategy. Wiley. Jones, G.

and George, J. (2010) Contemporary Management. New Jersey: McGraw-Hill/Irwin. Kerin, R., Hartley, S. and Rudelius, W. (2010) Marketing. New Jersey: McGraw-Hill/Irwin.