Finance and Marketing Coordination in Southwest Airlines' La Guardia Expansion Strategy
Overview
This paper examines how Southwest Airlines' proposed expansion to La Guardia airport would impact the airline's finance and marketing functions. The analysis argues that the shift from fixed to variable cost structures due to rising fuel costs necessitates coordinated efforts between finance and marketing departments to maintain profitability while building customer trust and market presence in a highly competitive market.
What this case study covers
- Impact of fuel costs and variable cost structure on La Guardia expansion feasibility
- Marketing strategies and digital promotion methods for customer acquisition in competitive airline industry
- Coordination between finance and marketing management for accountability and decision-making
Preview
Southwest Airlines
Name
Institutional Affiliation
Southwest Airlines
The Southwest Airlines plan of serving La Guardia might impact the fundamental business function of finance and marketing. The high cost of fuel affected the plan by contributing to a high price since the airline was used to the fixed cost structure. Therefore, the process of adapting to the variable cost structure resulted in a high cost of fuel (Heskett & Sasser, 2013). This makes the cost of serving the La Guardia rise which should be considered in marketing. After all, the airline needs to remain profitable.
Furthermore, the SWA needs the new airport to increase the number of future clients flying via La Guardia. Marketing is a crucial part of attracting customers because the industry is highly competitive. In a digitally grown area, individuals utilize the internet to market, more so the use of social media to gain publicity. However, there has been rising pressure on the financial accountability of marketing methods (Terblanche et al., 2013). According to Heskett & Sasser (2013), the SWA airline operated earlier in non-glutted airports. Therefore, providing services to La Guardia will impact their operations of providing low-cost flights. As a result, the airline needs to heighten its marketing capabilities pinpointing the benefits of serving La Guardia. In the process, it needs to be open on its changing operations to maintain trust in their customers.
Consequently, coordination efforts of marketing and finance will strengthen the airlines' image to serve La Guardia successfully.