The Southwest Airlines Company’s Business Model

Competitive Advantages

Southwest Airlines is known as a very successful airline organization. For more than twenty years, it has been functioning in an era where the majority of the airlines serving as its competitors are struggling to thrive. The company’s business model is built on utmost effective operations, low and fair pricing to clients, and creative logistic solutions. In addition to that, their strategy still incorporates a significant focus on client exposure and looking forward. Lastly, none of this would be possible without a motivated team of workers. Through this effective plan, the company has acquired numerous competitive benefits that have made it remain relevant in a swiftly changing society.

Pricing Policy

One of the sectors in that Southwest Airlines is experiencing a significant improvement is the pricing to its clients. As recorded by the Southwest Airlines report (2020), the Southwest organization is the only big low-cost airline company across the globe. The decline in the need for travel through the air during the novel COVID-19 pandemic almost put every airline company out of operation. However, this was not the case for Southwest since it was in a position to withstand the crisis without great layoffs. This was more important due to its favorable pricing for its customers across the globe. In the case of business, conditions go down, and only the most excellent are able to survive. Southwest Airlines is among the most substantial airline organizations from both a size and a pricing perspective.

Team and Operating Policies

Another area that the company is doing exceptionally well is the deep investment in an effective team of employees. Southwest Airlines realizes that serving its workers well results in happy clients, which leads to financial breakthroughs. The results of this strategy are evident in the organization’s excellent business statistics. Finally, the organization is also working excellently on the operating policies. The company has come up with very flexible policies for its operation. The different policies and procedures generated by the company make flying with it easy for its clients.

Strategies Dictated by Changes in the Industry

Focus Strategy

In spite of the various complications that Southwest airlines encounter as a result of a change in industry trends, Southwest Airlines has the chance to acquire market leadership. Among the changes, there are, for instance, a rapid rise in fuel prices, altering clients’ expectations, and a decrease in profitability level. One of the strategic alternatives that Southwest airlines should consider is the focus strategy. A focus strategy is regarded as a concept of establishing, marketing, and trading goods and services to a niche market that might be a form of customers, commodity line, or geographical region (reference is needed). This aspect focuses on the growth of marketing tactics for an organization while looking forward to creating new connections with its target audience. The approach can help the organization to establish limits for recent entries in the airline market and be in a position to gain the confidence of the clients in offering airline services.

Market Development Strategy

By serving a certain niche in the airline market, Southwest company can obtain expertise to provide assistance in the specific niche in a much better way compared to its competitors. Niche marketing does not minimize the threat of interference (Sert, 2017). However, the strategy will be of significant impact to Southwest Airlines in encountering competition effectively and maximizing its availability in the market. Another strategic alternative that Southwest airlines should put into consideration is market development. This is a form of marketing strategy which is based on establishing various factors within the business that will attract customers. Through this concept, an organization is able to attract more customers through unique features that its competitors might be lacking.

COVID-19 Challenges

The analysis of the organization suggests that the COVID pandemic ravages different economies globally, which makes it difficult for Southwest Airlines to obtain capital to fund an aggressive value-enhancement strategy. The traveling business has been highly affected by the travel restrictions and the risk of spreading the virus, which has seen a reduction in the number of travelers. Therefore, one sector that the company should defund is the recruitment of new workers and the employment of new experts in all the sectors across the company from top to bottom. This will assist in setting aside more finances that could be used as salaries in establishing regulations for the disease in order to attract customers.

Ethical Standards and Corporate Values

Among the values of the organization, there are the safety of the flights and creation of a family-like team of professionals. However, some steps can be taken by the company in this field in order to create a competitive advantage. The organization should further put into consideration the ethical standards and workers’ treatment in order to enhance its work culture. The organization should look forward to highly improving servant leadership throughout its multiple channels.

The management ought to put in action active listening to the employees below them. It should provide delegation of authority to workers for decision making and put in action participative together with two-way communication. These approaches can make sure that the servant leadership aspect has been launched. Due to this, the leadership initiative of putting one’s words into action has to be executed where ethics and guidelines leaders propose must practice in their everyday activities. This can make sure that the leadership is appropriate to promote friendly work premises.


Sert, A. N. (2017). Niche marketing and tourism. Journal of Business Management and Economic Research, 1(1), 14-25. Web.

Southwest Airlines. (2020). Southwest Airlines Co. 2020 Annual Report to Shareholders (pp. 1–172). Dallas, Texas: Southwest Airlines.

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