Contemporary Issues in Strategic Management

SOE11505/SOE11405 Contemporary Issues in Strategic Management End of Module Coursework: Case Study Assessment This summative assessment accounts for 90% of your final grade and is based on a case study of Southwest Airlines. The other 10% of your grade is accounted for by the end of unit tests, so it is important to make sure that you have completed these. In the assessment brief below you will find:
• Details of the coursework assessment
• Guidelines to assist you in answering the questions
• The assessment marking criteria
• Information on presentation and the submission date You are required to conduct an analysis of the following case study and article: Southwest Airlines by Andrew Inkpen, in: Hitt, M.A., Ireland, R.D., Hoskisson, R.E. (2016) Strategic Management: competitiveness and globalization – concepts and cases (12th edition). Boston: Cengage Learning
• The objective of your case analysis will be to demonstrate your comprehensive understanding of the competitive environment in the US Airline industry, Southwest Airlines’ capabilities and core competencies, and its strategic choices at business and corporate level.
• If you are not familiar with the company then you can find out more about it by visiting its website, but take care – when answering the questions below, you should only use information on Southwest that is contained in the case study.
• You should not use alternative sources of information on the company, because it is your ability to analyse the case information provided that is being assessed. COURSEWORK ASSESSMENT ONLY USE EVIDENCE FROM THE CASE STUDY PROVIDED To gain the best possible grades, please pay attention to: presentation of analysis, application of appropriate tools and use of case evidence.

QUESTION 1 Using only Porter’s Five Forces model, fully analyse the competitive environment in the U.S. Airline industry based on the case study timeline.

QUESTION 2 Conduct a Value Chain analysis to comprehensively assess Southwest Airlines’ capabilities. In doing so, identify, appraise and evaluate its core competencies, and argue how these core competencies underpin its choice of generic competitive strategy.

QUESTION 3 Using the cultural web as discussed in the course content, describe the organisational culture at Southwest Airlines, and briefly discuss how these features might impact successful implementation of the company’s strategic choices.

QUESTION 4 At the time the case study was written, Southwest Airlines had not expanded outside the U.S., although in 2013, Southwest’s CEO remarked that “opportunities for growth now lie beyond US borders”. Evaluate possible international strategy approaches (multi-domestic, global or transnational) and select which strategy Southwest should pursue to achieve success.
ASSESSMENT GUIDELINES To answer the questions in a robust and comprehensive way, please look at the following guidelines.

Question 1 Review Porter’s Five Forces model (Unit 3) and apply it to analyse the US airline industry. This is an industry-level analysis of the competitive environment – part of external environment analysis. At this stage do not focus too much on how Southwest Airlines managed to overcome the forces and successfully compete in the industry, as this is the basis for the analysis of its internal capabilities in question 2. The purpose of the Five Forces Model is to gain a deeper understanding of the intensity of competition in the industry and which forces are the key influencers. The more intense the competition, the less attractive the industry, the lower the average level of industry profitability. The reverse applies to less intense levels of competition. You must analyse each force individually through an examination of the structural factors which determine the impact of this force. The discussion of how these factors influence each force means that your answer will go beyond the description of each force. For each force arguments should be presented as to whether the force’s influence is high, medium or low. Your arguments should reach formal conclusions: • Is this an attractive/unattractive industry (high/low/average profit margins) as result of the intensity of the competitive forces? • What are the most significant forces facing the US airline industry in the future that all competitors should take into account in their strategy formulation? Question 2 Conduct an internal analysis (Unit 4) of Southwest Airlines’ capabilities, then to identify and evaluate its core competencies: • Use the Value Chain framework to analyse Southwest Airlines’ capabilities. You must go further than describing what it does in each activity through a discussion of what it does well (strengths) and what areas it needs to improve (weaknesses to address). • To identify Southwest Airlines’ core competencies, analyse critical linkages/processes in the Value Chain, some of which should be the basis for your choice of core competencies (CCs). The explanation of Value Chain linkages is an intermediary stage to identifying CCs. Assess which linkages are “core” by applying either Barney’s or Grant’s criteria. • The final part of the question requires you to identify its choice of generic competitive strategy – differentiation, cost leadership or hybrid (Unit 5). Your choice should be supported by the capabilities and CCs you have derived from your preceding value chain analysis. Question 3 The focus here is on the organisational culture of the airline, and how this is able to influence its strategic choices and implementation. Use the cultural web (Unit 10), and back up your description with evidence from the case study. Again, you must go further than simply describing what the culture is, by discussing the strengths and weaknesses of different elements of the framework, and how they might impact the ability of the company to make and implement strategic decisions. Question 4 Consider three international strategy approaches (multi- domestic, global or transnational), and to select which strategy you think Southwest Airlines should pursue, in the context of the case study. To develop an argument to support your choice, work through the elements of the Integration-Responsiveness Grid (from Unit 7) which apply to the industry and also to Southwest’s own capabilities.