Running Head: GROUP 4 CASE STUDY 2 1
GROUP 4 CASE STUDY 2 2
Case Study 2: Southwest Airlines
Southwest Airlines Case Study
Questions11 and 12 completed on Excel sheet
Specific recommended strategy and long-term objectives. Explain why you chose the strategy and discuss how much the strategy will cost to implement and how much new revenue your strategy will create. Include your action timetable agenda for accomplishing your strategy.
The strategy used in this paper was to increase revenues through boosting sales. While this appeared to be a good outcome, the general outlook was that there were increased overhead expenses, which resulted in poor NPV for the projected years. For example, the model in the cash flow statement shows that the projected NPV value stands at $4,723.94 whereas the NPV from the previous year showed that the NPV stood at $8,268.44. In other words, this says that the projected year, although bearing profits, will see a larger number of incurred costs. The result will be reduced profits for the airline despite higher sales. Due to the nature of this enterprise, it is therefore not possible to implement this strategy. Increasing sales for the airline embodies unique circumstances, which do not improve the outcomes of the company.