External Environment: Analyze SOUTHWEST AIRLINE external environment for the con
ID: 376264 • Letter: E
Question
External Environment: Analyze SOUTHWEST AIRLINE external environment for the conditions and factors surrounding it that influence its activities and choices, including its business strategies. External forces the organization does not control include the following:
Future trends—in the field or the culture.
Economy—local, national, and international.
Funding sources—foundations, donors, legislatures.
Demographics—changes in the age, race, gender, culture of those served by the organization.
Physical environment.
Legislation.
Local, national, and international events.
Explanation / Answer
The external environment of Southwest airlines includes the factors that cannot be controlled by the internal management. They are future trends, economical, government, legal and international factors. The Southwest management cannot control these attributes and need to adjust their strategies to make competitive advantage in the market.
The future trends in the field include the opportunities that may benefit Southwest Airlines. They are developing new flights and are planning to expand its market and many are under development. The technology also gets upgraded with the trends in the industry and the reservation system in Southwest also getting upgraded. As Southwest airlines is concentrated into no frills travel they have not much explored the opportunities related to business travelers and Southwest can develop its strategies for attracting business travelers in the future while planning expansion.
The economical factors include the fuel price and the economic conditions prevailing in the country. When the fuel price goes up the airline business gets affected. During economic slowdown people try to avoid air travel to save cost and this again affect the operations of Southwest Airlines.
The Physical factors include the employees and the customers and according to southwest culture employees greet the passengers happily. Southwest provide more importance for reducing emissions and conservation of fuel. Southwest has signed an agreement for purchasing low carbon renewable fuel in 2014.
The legal factors include the government regulations which control the airlines and Federal Aviation Administration is the main authority to control airline activities. There are laws which prohibit airlines from flying nonstop. All these regulations affect Southwest activities and leads to many legal battles.
The demographic factors have great role in the expansion of airline services and Southwest Airlines is affected by the population density on the area while expanding its operations. Demography with low population does not need much expansion as the number of passengers might be low. Southwest entertain all cultures in similar way without any difference.
Southwest comes up with discounted rates to attract more customers during local, national or international events.
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