Strategic Report for Southwest Airlines （西南航空公司的战略报告）.pdfVIP

Strategic Report for Southwest Airlines Tycen Bundgaard John Bejjani Edmund Helmer April 12, 2006 Table of Contents EXECUTIVE SUMMARY 3 COMPANY BACKGROUND 6 PORTER’S FIVE FORCES 10 MARKET DEFINITION 10 INTERNAL RIVALRY 11 ENTRY 12 SUBSTITUTES AND COMPLEMENTS 14 SUPPLIER POWER 15 BUYER POWER 18 FINANCIAL ANALYSIS 19 OPERATION FINANCIALS 20 CASM ANALYSIS 21 STOCK PRICE VALUATION 24 DU-PONT ANALYSIS 26 STRATEGIC ISSUES AND RECOMMENDATIONS 27 MAINTAINING COST ADVANTAGES 27 GROWTH OPPORTUNITIES 30 2 Pandora Group Out of the Box Consulting Executive Summary Southwest Airlines has been a strong growth company over the last 35 years. Using its low-cost, passenger friendly, point-to-point operational strategy, Southwest has been able to sustain considerable growth year after year and remain profitable for 33 straight years. Southwest Airlines now has a market capitalization of $14 billion and is positioned as one of the strongest airlines in the struggling airlines industry. Over the last five years as many airlines have reported record losses and five of the ten largest airlines have filed for bankruptcy, Southwest has been able to remain profitable and continue to grow. While Southwest has gained market share in recent years, legacy carriers have struggled due to depressed market conditions. The enire airline industry has endured expensive labor contracts, soaring energy costs and reduced consumer demand. Southwest has continued to grow in the harsh airl