Question

Create a BCG matrix for Southwest Airlines. Include competitors, JetBlue and United.

Answer 1

To draw BCG matrix, let's first do the SWOT analysis of Southwest airlines:

Strengths - One of the best low cost carriers. Strong Brand. Years of profitability resulting in abundance of cash. High domestic market share. Lowest turnaround time

Weaknesses - Negligible international presence. No premium class services, thus losing out on such customers. High fixed costs due to permanent employees.

Opportunities - Can expand in international markets easily because of sustained cashflows.

Threats - Other low cost carriers. Government regulations and fuel costs.

Southwest Airlines market share is approximately 21% and its growth rate is about 5-7%, which is close to industry growth rate itself. This leaves Southwest Airlines in the Cash Cow category because of high market share but average growth rate.

United Airlines is also in the Cash Cow segment because of growth rate of 3.5% (lower than normal) and substantially high 15% market share.

Jetblue is a question mark with high growth rate of ~7.5% and low market share of only 4%.