Southwest Airlines

What are the four components of strategy?
(Chapter 1)
b. Internal and external analysis: SWOT (strengths,
weaknesses, opportunities, threats)
c. Porter’s five forces industry analysis.
Attractiveness of an industry (external analysis)
d. Components of corporate level strategy
e. Understanding of cost leadership strategy
f. Understanding of differentiation strategy
g. Barriers to imitation (how to sustain competitive
advantage)
h. Capabilities and resources (Internal analysis;
VRIO analysis to see if competitive advantage is
sustainable)
i. International expansion
j. Horizontal and vertical analysis of financial
statements and commentary on analysis

Sample Solution

1. Objectives: Establishing the goals and ambitions of a company or organization.
2. Context: Understanding external factors that can affect strategy such as competition, technology, market trends, customer preferences and regulations.
3. Actions: Identifying the specific actions needed to achieve objectives within the context of an organization’s mission, vision and values.
4. Implementation: Developing plans to ensure successful execution of strategies; considering resources needed and how they will be used most effectively.

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