Week 7 • From the e-Activity, analyze the essential manner in which the new Southwest-AirTran merger and resulting low-cost structure strategy could maximize both companies’ long-term profitability. Support your response with at least two (2) examples that illustrate the manner in which each company would avoid risks associated with becoming too dependent upon its corporate partner. • From e-Activity, determine the fundamental drawbacks associated with horizontal integration. Suggest another corporate-level strategy that could redefine the Southwest business model and thus allow the company to increase its competitive advantage within a changing industry environment. Provide a rationale to support your response. Watch the video titled “Southwest Eyes Market Growth With AirTran Merger” (6 min 4 s). Video Source: PBS NewsHour (2010, September 27). Southwest Eyes Market Growth With AirTran Merger [Video file]. Retrieved from http://www.youtube.com/watch?v=D0d6y1xRqGU.
Watch the video Chapter 9, titled “Southwest merger” (1 min 46 s), by following the link. You can also find this video in the “Supplemental Resources” area in the menu to the left. Be prepared to discuss.