The internal external ie matrix

Learning Activity #1

Using the company you selected for the Week 3 Learning Activity (Southwest Airlines or Subway), it is now time to evaluate the strengths, weaknesses, opportunities and threats you uncovered and determine what strategy is best suited based on the outcome of the IFE and EFE.

Discuss which generic business-level strategy is best suited to keep the company you selected competitive. Offer supporting rationale for your explanation and be sure to reference your statements using proper APA formatting

Southwest

The business-level strategies are based on competitive advantage (cost and uniqueness) and scope of operations (broad target and narrow target). These decisions occurred from: cost leadership, differentiation, focused cost leadership, and focused differentiation. Southwest is the focused cost leadership because of the cost and narrow target.

Southwest uses one type of aircraft the Boeing 737 and not only has rewards card, but also has low cost flights and include two bags free. Using only one type of aircraft is cost effective for maintenance costs and fuel. The routes that Southwest chooses to use are high consumer demand and they have quick turnaround time which allows them to be in the air more than their competitors. This allows them to keep the maintenance cost low and helps increase profit margin growth.

Reference

Pandora Group. (2006, April 12). Strategic report for Southwest Airlines. Retrieved March 16, 2017, from http://economics-files.pomona.edu/jlikens/SeniorSeminars/pandora/reports/southwest.pdf

Learning Activity #2

For the company chosen above, select one of the strategy formulation analytic tools and complete based on the information gathered in the Week 3 Learning Activities; the tools to select from are:

Space Matrix

Boston Consulting Group (BCG) Matrix

IE Matrix

Once you have completed the tool discuss the outcome in terms of what strategic direction the selected company should take and why. As always, offer supporting rationale for your explanation and be sure to reference your statement using proper APA formatting.

Southwest I used the Internal-External Matrix (IE). The IE matrix is used to analyze strategic position of a business and working conditions. My EFE score was 1.33 and my IFE score was 1.49. The point falls under cell IX which is characterized with harvest or exit strategy. I thought it would fall under grow and build strategy. The harvest or exit strategy should have Southwest to revitalize their business. I thought Southwest would fall under grow and build because it has had strong growth over the last 35 years. They provide point-to-point operational strategy, low-cost, passenger friendly with great staff. Even though other airlines have flounder, Southwest has been able to continue to grow and remain profitable.

Reference

Pandora Group. (2006, April 12). Strategic report for Southwest Airlines. Retrieved March16, 2017, from http://economicsfiles.pomona.edu/jlikens/SeniorSeminars/pandora/reports/southwest.pdf

Maxi-Pedia. (2015). Internal-External (IE) matrix. Retrieved March 16, 2017, from http://www.maxi-pedia.com/internal+external+IE+matrix