Southwest airline in Nigeria Case Study Solution
Introduction:
Southwest Airline is the world’s largest cost effective airline and its headquartered in Dallas, Texas.It was inaugurated in 1967, named as Air Southwest. Later in 1971, it changed its name to Southwest Airline. This company has over 53,000 employees and conducts a maximum of 3900 departures in a day. The Southwest Airline has been carrying the largest number of domestic passengers within the United States. Southwest has scheduled over 101 domestic destinations in 41 different states in 2017. Chicago-midway has the highest number of departures in a day.
Southwest has maintained an excellent quality of customer satisfaction. Moreover, Southwest has been ranked no 1, as there were the least number of complaints against the airline and customers are highly satisfied.It facilitates its customers by providing non-alcoholic and alcoholic beverages during the flight. Moreover, on the occasions like New Year and Christmas, these drinks are served as a compliment. In addition, lanes are also equipped with technologies like free Wi-Fi, live television streaming and movies on demand.
With the increasing number of customers, Southwest is planning to expand its services abroad. However, it has planned to focus on African countries for the expansion. Southwest is seeing more potential in introducing its international flights with the first route from George Bush International Airport, Houston to Lagos, Nigeria as there are many growth opportunities available there.
Situation analysis
Macro environment:
Macro environment analysis includes Political, Environmental, Social, Technological, Economical and Legal forces and changes that affect the company’s decision.
Political forces:
The political relationship between both Nigeria and the United States had been bilateral and these countries have been close allies to one another. Nigeria and U.S have been the greatest trading partners as well as diplomatic partners. However, these relationships have been once converted into hatred due to economic and social conditions of Nigeria.But from the initiation of Obasanjo government, the relationships have been improved.According to the global poll in 2017, 69% of Nigerians view United States favorably.
Social forces:
Nigeria receives more USA visas than any other African country. It is said by the foreign minister that there is no reason for Nigerians to postpone or cancel their US trips if the citizens have all valid and legal documents. Therefore, a large number of people, across 32% of African population is travelling from Nigeria to United States.
Technological forces:
The technological factors of Southwest Airlines have improved much to take international flights initiative, from Houston, United States to Nigeria, Africa. These factors include digitalization of communication at the airport which is just introduced by Southwest Airlines. Moreover, a new reservation system has also been introduced which cost $500. Consequently, the technological upgrades and improvements have made Southwest Airline able to provide international flights.
Economic factors:
Nigeria is an economic country which has the highest nominal GDP among all African countries. Moreover, it is an emerging market with expansion, growth in financial, technology and is considered a mixed economy.In addition, its economy has been ranked 21st in nominal GDP and 20th in purchasing power parity.
United States is a developed economy and the world’s largest economy in terms of nominal GDP and second largest in terms of purchasing power parity. Hence, these two states with friendly relations and well developed economy systems are highly related to each other.
Legal factors:
With the strong political and trading relationships between Nigeria and United states, these both countries share a legality of airway routes between them. Moreover, with the improvement in their relationships, citizens of both the countries are interested in travelling the other country for further growth and expansion of their industry and products. With the legal visa, passport and other required documents, both the countries are alleged to travel in another country.
Micro environment:
Customer analysis:
The Southwest Airline will target the customers of both the countries who are price conscious and middle class people. As the trade between both the countries is increasing, therefore, the travel amount between countries is also increasing. Moreover, the market trends of business between these two countries are increasing rapidly, which ultimately increases the number of passengers and flights. In addition, with the high rate of globalization, these two countries are highly bilateral. Therefore, middle class people in both the countries are searching for a low cost travelling for another country. Southwest Airline is facilitating them to fulfill the demand of local residents of both countries.
SWOT analysis:
Strengths:
The introduction of international flights as well as this particular route will provide these two countries to increase business with each other. Moreover, this initiation will also provide strength and reliability to Southwest Airline. Along with the local and foreign demand, the customer satisfaction and the cost effective strategy will increase their customers.
Weakness:
The weakness that will pursue Southwest Airline to initiate international travelling in Nigeria is that Nigeria is still an emerging market and the customer analytics data for Southwest Airline may not get prepared due to the market. In addition, the infrastructure of Nigeria is not well developed and United States residents may not feel comfortable or pleasant to visit the country..................
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