D. Bargaining Power of Suppliers
It is known that Southwest Airlines gets a good deal on their fuel in its current orientation but during refuel at airports in other countries that Southwest Airlines is not established in, a negotiation for fuel cost must occur. Southwest will have little power to manipulate the negotiations in their favor until they become established in the global market.
E. Substitute Products
There are many substitutes to the service that Southwest Airlines provides. In the International market, the number of good alternative industry providers increases. This may pose to be a threat to Southwest Airlines and will create more challenges as the company expands. Due to the lack of differentiation in the services provide
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Each country will have to have an analysis of the demographics, such as; income, education level, family composition, geographic location, and country specific demographics as well. With a growing global population, The United States of America’s Federal Aviation Administration projects the global aviation industry to have growth in all areas. Countries that are expected to see the most growth are India and China, both countries are yet to be expanded into by Southwest Airlines.
B. Economic
Global air travel is growing and many economic factors affect the success of this industry. According to Business Insider, “Global air travel boomed over the past 12 months, providing further anecdotal evidence that the global economy is strengthening.” (Business Insider Australia, 2017). This is a good sign for Southwest and may provide an opportunity to capture a larger share of the international market.
C.
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The company will need to dedicate much effort and capital to continue to expand, but with the reported growth and forecasted future growth in the industry, there is much opportunity to increased revenue and capture target market share. Constant monitoring of the general and specific environment is required to continually adjust for success in the volatile, global environment. Despite the high initial capital investment Southwest will see benefits from securing assets that would allow them to reach untapped or growing markets. Initial staffing costs will be high to increase the expansion into regions of the world that Southwest does not currently travel to, but the potential for increased customer base and increased revenue in the future will be worth the initial investment. I believe that Southwest needs to expand more rapidly