Strategic IssueSouthwest Airlines has never strayed from its niche: short-haul, high-frequency, low-fare service, all delivered with award-winning customer service.1-- Herbert D. Kelleher, President, President and CEOSouthwest's current strategy is to position itself as a cost leader with a focused strategy. The company's management and employees aim to fly large numbers of customers reliably and affordably on short, direct flights, and to have fun doing it. They are committed to making flying available to everyone. The company has succeeded in implementing this strategy, having experienced strong growth and profitability. Southwest is now the fifth largest carrier in the United States in terms of total customers. It has operated profitably for 24 consecutive years in an industry with a history of volatile earnings. The main strategic question facing Southwest right now is evaluating this strategy and determining its future course of action. SWOT Analysis: An assessment of internal strengths and weaknesses, as well as external opportunities and threats, based on the case study and further references. is as follows: Strengths1. Southwest has successfully adopted a cost leadership strategy. • Southwest keeps operating expenses per available seat mile below average by 15-20%. • The company does not provide baggage management services, meals, centralized reservations and assigned seats. its planes are Boeing 737, maintenance, turnaround and training costs are low. • The company has adopted technology that will reduce costs (e.g. ticketless travel).1. The company is famous for excellent customer service. • Southwest has won the Department of Transportation's Triple Crown 5 consecutive years for on-time service, baggage handling and fewest customer complaints. • The company has exceeded the National Airline Quality Rating for three consecutive years. 1. The company has a strong, fun-loving, employee-oriented culture. The company mission focuses on these aspects of the business. The result is a base of loyal employees willing to work hard to achieve company goals. • Culture starts with strong leadership. CEO Herb Kelleher is known for his laid-back management style. •Southwest was voted one of the “100 Best Companies to Work For in America” by Fortune magazine. • Southwest has implemented programs to retain employees, including the first profit-sharing plan in the industry and a 401k plan that matches contributions dollar for dollar. • Although 84% of the workforce is unionized, they share responsibilities (for example, pilots who handle baggage) and have flexible working hours. • Southwest shares information with all levels of employees so they understand the company's goals.1.2. The company is in a strong financial position. (Refer to the exhibition 1)