Southwest Airlines Term Paper Example | Topics and Well Written Essays - 750 words

Southwest Airlines - Term Paper Example Entering a new market requires new strategies that would consider bigger environment (Kotler, 1994). While the company may have attained success by adopting a low-cost strategy in the short-haul business, the same may not be applicable in the long-haul as part of its growth. Past performance could be claimed as a sign of company’s strength to face the future. To argue that it can generally help a company to predict its future performance may be partly logical but the future does have different challenges. Past conditions which may no longer be present or in the future. It, therefore, needs a new strategy. The case facts provide that the long-haul offers a lower cost per ASM at 4 cents than short-haul at below 7.5 cents. Looking at these figures appears encouraging but the strategies for the long-haul may be different because of different variables to address. The rules of competitions would be different. Since it is the bigger market, the general strategy of cost leadership may no longer be applicable as this would require a lower the attainment of economies of scale (Slavin and Slavin, 2010). For the company to do these, it may have to match successful companies’ strategies in the long-haul. This may require more capital investment from th e company. This could be a problem if the company cannot generate the required capital for growth (Gitman and McDaniel, 2008). If ever the company continues with the long-haul, it must only limit its operation that could be justified in terms of its profitability.