Southwest started out as a small Texas airline that served the cities of Dallas, Houston and San Antonio. Now, it is one the most successful domestic airlines today. They have expanded beyond their intra-state flights in Texas and by 1992, they were serving cities in fifteen states. And by 1996, they served 49 cities in 24 states. They have consistently reported annual growth in their net income.
Part of Southwest's strategy was to offer low fare, short haul flights. Many of their flights do not offer meals since the flights were only about an hour long. This resulted in lower costs and faster turnaround between flights. Their human resources was another competitive advantage. Southwest has created an environment for employees where they are respected and the employees have fun. In turn, the employees work hard and efficiently for the company.
Many airlines have watched the success of Southwest Airlines. Large airline companies such as United have attempted to enter into the low fare, short haul market. United Airlines had created their own low fare airline, United Shuttle. United Shuttle served only the western region of the United States. Other airlines such as United Shuttle that desire to copy the success of Southwest Airlines are potential threats and need to be addressed.
Finally, a current/future concern could be that the company may lose touch with its feeling of "family" with the employees while the company continues to grow.