In my opinion, the greatest way to utilize Southwest travel funds is to invest in a franchise. Franchises in this category are generally not acquired without serious research and analysis of the industry. When considering a franchising strategy, one must bear in mind that franchises offer an ideal opportunity to utilize Southwest travel funds.
There are a number of reasons for this, and I will outline some of them in the remaining portions of this article. However, before discussing the details of the franchising strategy, it is imperative to address the significant negative aspects of having Southwest Travel Funds in the first place. Before we delve into the merits of franchising, it is important to state that Southwest’s (NYSE: LUV) aggressive growth strategies have not lived up to the hype, and this has resulted in the company’s shares falling in recent months.
If you have a strategy to pursue, then that strategy has to be properly aligned with the specific business objectives. It is the job of the business team to determine this alignment by evaluating factors like competition, competition trends, and price/loyalty for each of their products. With all of the right information, the team can identify and plan for these types of market opportunities.
The long-term success of the brand name also depends on how well it is marketed. In other words, marketing must focus on its strengths while ignoring the weaknesses. Obviously, one of the weak points for Southwest is the amount of competition it faces. The more competition there is in the marketplace, the more valuable the brand name becomes.
However, this is not enough for any strategy. This is why a strategy requires consideration of several factors, and the franchise is a great way to utilize Southwest travel funds.
A franchise offers a single line of support from onesource for one low cost. This one source offers you substantial value, because the franchise is typically owned by one of the current leaders in the industry. An example of this would be when Delta Airlines, which owns the brand name, purchased Air Tandems, which owns the supply chain.
Air Tandems owns all of the airplanes that carry Southwest passengers, and Delta has built the aircraft supply chain around the brand name. Since both Air Tandems and Delta control the supply chain, their ability to influence pricing can be quite substantial.
Also, the one airline source typically has additional support that you will not find in a standalone airline. You might need to consider such support as maintenance, training, retail stores, personnel, etc. In this way, the brand name becomes uniquely positioned to meet the demands of the consumer.
Also, with a franchise, the airline source is usually backed by a strong management team. In many cases, the strategy involves combining the businesses. Therefore, the management team has the experience, knowledge, and expertise in both supply chain operations airline operations, and the brand name.
The combined forces, along with a sales strategy that balances the airline demand with the supply chain demand, results in a more efficient, reliable, and competitive enterprise. Therefore, this type of strategy is extremely beneficial for any investor who wishes to make a consistent return on his or her Southwest travel funds.
Finally, with a franchise, it is easier to secure financing. I am sure you have already heard of the advantages of franchising, and you may have heard of the franchise model. However, until you have the experience with the model, it can be difficult to determine if a franchise will be profitable for you.
Generally, the franchisors have been in the business for a number of years and therefore have established their reputation, expertise, and financing needs. You can purchase your franchise, obtain the financing, and start implementing the strategy and planning for success. This will allow you to see for yourself just how successful a franchise can be.