Question

Develop a BCG Matrix for Southwest Airlines using BCG Matrix, Stars II, Question Mark I, Cash Cow III, and Dogs IV for SOUTHWEST AIRLINES

Answer 1

“A BCG Matrix is a method by which we can assess the company’s unique position in term of its product range and offerings”.

This tool helps an organization to analyze its range of products and make a business decision on changing or innovating the range to maximize returns and improve customer satisfaction level. The decision to eliminate a product or service can also be taken.

Southwest Airlines: An Overview:

Southwest Airlines is a low-cost airline in the United States of America, it is based out of Dallas, Texas. As per statistics of 2009, it operates around 3500 flights daily, is the third largest airlines in the world, and the largest airline in terms of a number of passengers carried during the year.

The business model uses only one type of aircraft, has multiple short flights to secondary airports. The flights are efficient in turnaround and priced least cost per seat. They have a free seating system and no-frills service.

South West Airlines is a Star and fall in quadrant II:

They have low fares and short flights, high growth strategy which generates a lot of cash flow and has a huge market share but also high consumption of the cash to match the growth rates. Over a period of time cash and growth balances out but when the market share becomes constant, the star becomes a cash cow with an unlimited flow of resources and decline in market growth. Currently south-west should continue adding new sectors to maintain its start position and continue its market growth.

They have also collaborated with other market players to increase the market share. Their product range is unique and differentiated as follows:

• Great customer service
• Free seating
• Lowest Fares
• Short efficient flights
• Fun and customer engagement on the flights

To sum it up the Southwest airlines have to keep its unique product spread by a continuous supply of low-cost seats, no-frills airlines by reducing costs and maximizing customer service to maintain its unique position in the airline industry.