Mini Case (Southwest Airlines) Southwest Airlines has the highest-profit margins in the airline industry in the USA. Southwest Airlines grew 4,048 percent in the 1990s. Its no-frills strategy has been highly successful in the U.S. domestic market. Its strategy is based on a narrow but well-defined market niche. Southwest concentrates on short-haul routes with high traffic densities and offers frequent flights throughout the day. Efficiency has been improved by eliminating costs associated with hub routes involving large major U.S. airports. Southwest limits the number of U.S. states and cities of operation, and it targets secondary airports because of their less expensive structures. Southwests fundamentally different operating structure allows it to charge lower fares than more established airlines. A typical flight, which lasts 1 hour on average, has no assigned seats; in-flight service consists of drinks and snacks only, and the company does not offer transfer of luggage to other airlines. Southwests fleet consists of 284 Boeing 737s, which make more than 3,510 flights per day. Having one type of aircraft allows for greater efficiency and easier turnarounds. All Southwest 737s use the same equipment, thereby keeping training and maintenance costs down. Finally, high-asset use, reflected in a turnaround time averaging 20 minutes, which is less than half the industry average, reduces its operating expenses by 25 percent. Refer to the mini case above, answer the following questions: a) What would you think the business strategy of Southwest Airlines (in terms of Porters Generic Strategies). Explain why? b) What are the advantages and disadvantages of this strategy? c) Is this strategy sustainable? What would you recommend that the management of Southwest Airlines should keep an eye on in the industry competition? Explain.