Southwest Airlines case study analysis
The case study analysis allows you to apply your knowledge to the real world. Your goal is to identify the major problem confronting the subject company and provide a strategic solution for the problem. You will need to collect data and interpret it. You must also isolate the critical issues that the company faces. Remember that in the words of Lord Kelvin, “anything that cannot be expressed in numbers represents knowledge that is of a poor and uncertain kind.”
After identifying the critical issues you can generate alternatives to address the company’s competitive situation. Evaluating these alternatives allows an organization to select one course of action. With a course of action defined the strategic manager can then provide a plan for implementation. This is what you are to do on the case study. Always refer to these instructions and the rubric for the critical points to cover.
The format for the case study should be as follows:
- Cover page,
- One-page, single spaced Executive Summary for the case as noted below. This is a summary
of your analysis, which is described in full in the appendices. Thus, the executive summary must be done after you finish the appendices. This one-page report must use headings and subheadings as indicated in the following format description to identify the critical issues. Begin with your understanding of the situation in a problem statement. Follow this with a concise presentation of your analysis and the alternatives you see. Recommend one course of action and support that recommendation with facts and other information, such as competitor’s moves. The last item presents a brief plan for implementation. - Seven appendices, including: Appendix 1 with a few bullet points encapsulating your understanding of the problem(s) facing the company and identifying which is the main problem, with more detail than what is in the first section of the executive summary; Appendix 2 identifying at least one opportunity or threat in each of the five STEEP areas of the macro environment (please include a table as shown in Wurthmann (2020) Table I); Appendix 3 stating whether each of the Porter’s Five forces (bargaining power of buyers & suppliers, threat of new entry and substitutes, and rivalry among competitors) is strong, moderate, or weak and why (please include a table as shown in Wurthmann (2020) Table II, showing an analysis of at least one factor determining the strength/weakness of each of the five forces); Appendix 4 including the financial analysis as described below in these instructions; Appendix 5 identifying at least 3 strengths and 3 weakness in the company
(please include a table as shown in Wurthmann (2020) Table III) ; Appendix 6 identifying at least one different alternative strand of a strategy for the company at each of the four intersections, i.e. the strength/opportunity, strength/threat, weakness/opportunity, or weakness/threat intersections (please include a table as shown in Wurthmann (2020) Table IV); and Appendix 7 identifying which one of the four alternatives from appendix 6 you are recommending for the company and a brief explanation for why this is your chosen alternative (explain how the recommendation complements and integrates into the existing strategy and enhances the prospects of the company, include information on how to implement the recommendation, see the guidance provided in the penultimate section of Wurthmann (2020).
You are to use standard APA citations to identify the sources of the information in the appendices. You can also include any relevant tables, charts, graphs, etc. Please be concise. Remember, in management you must get your thoughts across quickly if you expect your work to be read. Long reports generally wind up in a stack awaiting reading at some future date (which never comes).
Executive Summary Format (1 page in length):
The Executive Summary is a concise summary of the most important points made in the seven appendices. The Executive Summary should be written from the perspective of an outside consultant, writing to the Board of Directors of the firm. It notes the essential points from the appendices and must have the following sections: - Problem Statement: State the main problem facing the firm (or industry) in one, succinct sentence (summarize Appendix 1).
- Analysis: Summarize the main findings of your analysis (summarize Appendices 2-5). You may use bullet points, bold, italics – any means to convey and highlight the key factors you have determined based on your analysis. Don’t simply repeat items from Appendices 2-
- Instead, summarize the major findings.
- Alternatives: State briefly (a bullet point each) 4 alternative courses of action that could be implemented. Here you can simply repeat the alternatives from Appendix 6, but omit the strength/opportunity, strength/threat, weakness/opportunity, or weakness/threat that each strategic alternative addresses.
- Recommendation: Choose one course of action and support your choice. Here you should summarize the key points of Appendix 7.
- Implementation: Briefly present how the plan would be implemented, summarizing the implementation-related information from Appendix 7. This tests the viability of the choice. For example, your plan would demonstrate that the company has the people, financial resources and time to implement your recommendation.
Additional Formatting information for Executive Summary:
Single-space
One inch all margins
Use bullet points, lists, or other means to convey information briefly. Further explanation can be found in the Appendices.
Use the 5 headings identified above to organize the material in an easy to read and understandable manner that highlights the essential points of your analysis.
Do not include a summary or overview of the firm in your report. The Board of Directors are knowledgeable and need no background presented.
Remember that cases are graded per the rubric. The Case Study rubric can be found in the Tab “Rubric” and should be added at the end of your submission.
Case Study Preparation
The preparation of the case in this course is different than the cases you have written in the past. It will require substantial investigation into the case company’s strategies, competitive positions and actions, problems being faced, the company financials, ratios and trends. The case study is about a real company’s current position in the industry, the external competitive environment, the current strategies being used, and recommendations for strategies the company should use going forward. The case should identify the main problem faced by the company, using the strategic management tools highlighted in the text and a quantitative analysis. You then generate realistic solutions, evaluate and select one, and then provide recommendations and the timeline to implement your recommendations. Remember that you are working to understand the company’s current strategy and future direction that offers a solution to the problem of meeting the company’s shareholder requirements. Again, remember that you are fulfilling the requirements of the rubric for the case.
By analogy, in the BSG you have a set of prescribed goals to attain and a set of reports issued weekly to assist you in understanding how your company is doing relative to the competition and giving you an opportunity to revise your operational plans for the next period. However, in the case you have to look at a company’s performance over the past few years and understand how the performance is changing and identify underlying problems. You are to identify trends in performance, problem areas, and how the company is performing using all of the tools that you have learned throughout your MBA program. Remember that you are working to meet or exceed the shareholder expectations.
The perspective for your executive summary and appendices should be directed to the company’s Board of Directors (BoD). Remember that the BoD is familiar with the company’s history, its management structure and the strategies deployed in the past. Recycling old history about the formation of the company, its previous management, etc. will not be looked upon favorably by the BOD (or your instructor). Remember that your case study must be brought up to date with the most current 10K report, financial information, and other facts (i.e. through early-2022). Get at the critical issues and report on them. Remember that in business, situations do not come with a set of questions. The questions sometimes have to be generated and then researched to find solutions to those questions. Success in the case is important to your final grade in that the case constitutes 15% of your course grade.
Additional information about the Case
The case is an individual, not a team, case. The case will build on previous work in the course and MBA program and will include:
- Analyzing the external environment (Chapter 3)
- Analyzing the internal environment (Chapter 4, along with a few more considerations from the later chapters).
- Comprehensive examination of the financial situation of the company (Chapter 4)
- Consideration of competitive and other strategy choices (Chapters 5 & 6), competing internationally (Chapter 7) and diversification (Chapter 8).
With your knowledge of these later chapters, your strategic recommendation for the company should be more sophisticated than simply choosing one of the basic five generic business strategies. Use the material in Chapters 6 -8 to develop strategic solutions that can involve global expansion, mergers and acquisitions, alliances, backward or forward integration, etc.
For the financial analysis:
Using the financial information posted in canvas, present one or more ratios to represent each of the four areas of financial analysis:
Profitability
Liquidity
Leverage
Activity
Then, provide a minimum 1⁄2 page discussion of the company’s financial situation, using ratios to evaluate the company’s profitability, liquidity, leverage and activity.
Of course, most of these ratios are meaningless by themselves; they only have meaning as a comparison. You must therefore compare the company’s ratios to one or more of three choices: - Where the company is now versus where it has been over time,
- A significant rival’s ratios
- (Optional) The industry averages for the ratios,
The ratios and financial information should be placed in Appendix 4. An example template for displaying the data for an example financial analysis is provided after the rubric. The most significant part of the financial analysis is your discussion and interpretation of the financial data. The financial analysis should be a significant part of your internal analysis – and some of your financial findings could appear in Appendix 5 as strengths or weaknesses of the company.
Remember, you are a consultant hired by the executive leadership of the company. Based on your analysis, you recommend to the company’s leadership what they should do strategically. Then, support your strategic recommendation. Why is it the best solution to the significant problem you have
