British Airways

The BCG model classifies products under four areas. These are stars, cash cows, question marks and dogs. Stars are SBU’s with high share or high growth market. Virgin Atlantic is clearly the cash cow of the Virgin Empire but we have undertaken a portfolio analysis from the viewpoint of Virgin Atlantic. With regards to Virgin Atlantic Airways we believe that there is no star. The cash cow is the Upper Class section. Cash cows have high share of a low growth market and generate higher cash revenues.30 This high end product targets wealthy customers and business passengers. This is the highest costing ticket available, usually around $9,000, and there are 50 seats available in this class. Therefore, upper class generates much higher revenues compared to premiumeconomy and economy. Dogs are SBU’s that have low market share in low growth market.31 We see Virgin Atlantic’s economy class as a dog. Question marks are that have high potential but will require great resources to build market share.32 We SBU’sbelieve that Premium Economy is a question mark as it has potential to be a cash generator. Premium economy targets cheaper flying business class passengers and high end couples. There are 38 seats in this class and tickets generally sell for around $3,000.Economy class focuses on families and groups flying together. Tickets for economy class are priced around $500 and there are 271 seats.

Table describes the BCG model.

Low
Low
Relative Market Share
High
High

Stars- None | ???- Premium Economy | Cash Cow-Upper Class | Dogs- Economy | High
High

Low
Low

Relative Market Share
High
High
Low
Low Low
Low
High
High

Stars- Upper Class | ???- None | Cash Cow- Premium Economy | Dogs- Economy