International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

The Application of McKinsey Matrix in Determination of Route Attractiveness and Resource Allocation in Kenya Airways
Samuel Obino Mokaya, Beatrice Wakhungu, Raphael Mwiti Gikunda

Abstract
The study sought to assess the application of the McKinsey Matrix in determination of route attractiveness and resource allocation in Kenya Airways (KQ), as basis for resource allocation. The positions of KQ routes were plotted on the matrix and possible alternatives of resource allocation decisions highlighted. The study was explanatory using a survey questionnaire to collect data from 100 managers and supervisors. Both descriptive and inferential statistical tools were used to analyze data. 14 factors were used to study the applicability of the Matrix on market attractiveness; market growth, market size, barriers to entry, competitive rivalry, market concentration, fares, customers, economic growth, market segmentation, product differentiation, bargaining power of suppliers and airline, substitutes, and technology development, all with a mean score of 2.24. The mean on the 12 factors for the competitive strength was 2.79. The factors considered were marketing, customer loyalty, frequency of flights, market share, distribution strength, customer service; partnerships, loyalty programs, market segment, baggage allowance and customer complaints. Business strength variables had a mean of 2.46. The results show that the matrix is indeed applicable within KQ operations. The three variables under study have positive linear relationships; market attractiveness against business strength 0.821, while against resource allocation; it has a correlation coefficient of 0.849. The correlation coefficient between business strength and resource allocation was found to be positive at 0.955. From the findings, 96.1% of changes in resource allocation can be attributed to market attractiveness and business strength. The matrix is used in market assessment and is a key determinant in resource allocation. Resource allocation for routes in the “Grow/Penetrate” cell should be geared towards seeking dominance while those in “Invest for Growth” cell should focus on identifying weaknesses and building strengths for market leadership. In the “Selective Harvest or Investment” routes, resources should be channeled towards identifying growth segments and investing heavily in them. Routes in the “Segment and selective Investment” cell, should identify growth segments, invest selectively and specialize in them.

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