Question

The purpose of this assignment is to assess the effectiveness of a company's operational organizational strategies and processes. assessing the next steps for the firm and how to increase value for the shareholders and stakeholders involved.

The company to be discussed is Southwest Airlines

how might the firm benefit from a strategic alliance? What are the risks of a strategic alliance and how might those risks be managed?

Answer 1

Strategic Alliance is defined as arrangement between two companies for their mutual benefits.it is less complex compared to a joint venture .

southwest airline is one of the major airlines of America . it is the world's largest low-cost carrier. the business strategy of his airline is to provide low-cost ticket and attract people.. a strategic alliance for southwest will give them the following advantages

1-possible to overcome the route restriction and airline ownership by different government

2-scale and scope can be improved, the price can be again bought down

3-better coordinated schedules and pricing to meet the demand of people

4-southwest can put a barrier for the new entries in the market

5-Although these airlines have the highest revenue,such an alliance will improve the profit

Risks involved in the strategic alliance

1-strategic alliance is not the universal solution for better profit

2-if southwest airlines join with such an alliance, it may lead to a loss in their brand identity

3-company won't be able to decisions independently , this will further lead to a loss in the flexibility of decision making

4-loss of supreme authority will affect in deciding the routes and capacities

5-it will restrict southwest future on some other alliance on particular projects or routes

6-the legacy and individuality of the brand can be effected

Managing risks in such an alliance is a complex process. the stages of partner selection , operation , and structuring should be studied well and the risks should be identified and thing should be planned while keeping future in mind

Try to get full access to partners' resources and gain full power on it meanwhile without damaging southwests resources.