Southwest's Economic Environment

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After 2001, there have been several environmental shifts in the macroenvironment that affect southwest airlines. There are several causes for these shifts, such as the 9/11 terrorist attacks (which has caused increased fear, political regulation, and pressure), a change in travel preferences, and increased environmental protection initiatives. Within the macroenvironment, the affected components are the: economic environment, demographic environment, political environment, technological environment, and the natural environment.
Relating to the economic environment, competition among airlines has become fierce, which has hurt the operating margins of Southwest. Because margins are so low, Southwest employs several tactics that are designed to ensure profitability. For example, most of their flights are statistically guaranteed to be booked, and they overbook these flights to compensate for customer cancellations. However, in recent events, overbooking flights has …show more content…

Because of this, Southwest has needed to adapt by offering more flights to tourist attractions and landmarks. Southwest has also needed to create more luxury accommodations for passengers with high expectations on vacation. These trends are directly related to lifestyle marketing.
For the political environment, Southwest has faced harsh regulation. especially after the attacks of 9/11. Due to the increased security and discomfort by the TSA, Southwest has needed to adopt various ways to ensure customer comfort and accessibility to their flight.
For the technological environment, Southwest has needed to implement initiatives to protect the brand image from bad press, social media, and customer reviews that has exploded in the digital age. They utilize special social media teams to vigilantly watch Facebook, twitter, and various blogs to ensure they can respond to any concern before it

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