Introduction:
In 1968, Royal Caribbean Cruise Line was founded with one ship. Over the next twenty-five years RCCL has expanded its fleet to 29 ships, with 2 more ships being built. RCCL has made its way in the cruise industry as one of the top three cruise lines. Over the past 5-7 years RCCL has experienced some problems with the external environment. These and other factors have placed RCCL in a situation of future organizational uncertainty. The time of this case is 2004.
Current Mission, Goals, & Strategy:
RCCL markets 3-17 day cruise vacations to over 160 destinations. Their current #1 goal is to provide the highest level of service and the best vacation experience on land and sea. RCCL is currently engaged in a capital expansion program, by drawing revenue growth through the purchase of new and larger ships. These new and larger ships will be the largest cruise ships in service. Each ship will have a new variety of innovative design features. RCCL’s international marketing team is focused on active adults and families interested in exploring new destinations. “Get Out There” campaign was launched in 2000. This campaign was designed to reposition the brand dispel consumer misperceptions of cruising and generate increased demand for Royal Caribbean.
Internal Analysis:
RCCL is a STRONG company internally with an IFEM score of 2.94.
Finance:
RCCL is weak financially. This is due to the experience in weaker margins due to the pricing pressures caused by a weak U.S. economy, traveler safety concerns, and increasing capacity. RCCL has a LT debt-to-equity ratio of 1.31, which is much higher than the industry average of 0.69. Assuming no significant changes in interest rates RCCL net interest expense is expected to fall in the range of $290-$310 million.
Management:
While the overall financial situation of RCCL is weak, factors that boost their overall appearance are the strategic decisions that have been made by management. RCCL has maintained one of the youngest fleets on sea. RCCL’s capacity continues to grow. It represents a capacity increase of 65% since the beginning of 2001. RCCL has begun tackling passenger’s safety concerns by implementing a 100% screening policy on all passengers, crew, luggage and carry-ons. RCCL has also had an impact on international travelers through fleet deployment and expanding it...
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..., dates of cruises, itineraries, and space availability.
Competition:
There are really only three key players in the cruise line industry that pose a threat to one another. Carnival Cruise Line offers better berthing facilities in various ports. Carnival also has a larger market share than RCCL; 52% compared to RCCL @ 33%. Carnival has greater access to capital markets. Even though there are really only two close competitors to RCCL, there are many smaller lingering potentials.
Overall the external environment is not all that bad. At this point the economy is getting better. Individuals are beginning to travel in larger numbers. The industry is keeping up with technical time and are allowing for the convenience of booking reservations from the convenience of your own personal home computer, or that of a travel agency.
Recommended Strategic Thrust:
RCCL should adapt to a strategic thrust which is aimed at making them more of a dominant leader in the industry. RCCL should try to break away from the close competitiveness of Carnival Cruise Line. They would do this by continuing to expand their fleet and add new destinations to their itineraries.
The term “big business” attracts a wild frenzy of bad connotation that leads us to believe that the leaders in the business world are innately a bunch of no good, greedy, old men in black suits. The corporate world is cutthroat and if you want to survive in it, you will spend your days walking on thin ice, because any mistake you make can affect everyone below you. The business being analyzed in this paper is going to be Regal Entertainment Group. The exploration of the stakeholder models, internal and external factors will be discussed throughout the course of this paper.
To keep American Airlines on top of the industry, one of Crandall's visions was to accelerate the company's efforts into the rich overseas markets. By tapping into voids created by Pan Am, Eastern Air, Braniff Int’l and TWA, Mr. Crandall’s ambition acquired promising overseas routes to Asia and Europe, and Latin America.
Looking at the individual ratios seen in exhibit 1 and comparing it to the industry average shown in exhibit 2 gives a sense of where this company stands. Current ratio and quick ratio are really low and have been decreasing. For 1995, the current ratio is 1.15:1, which is less than the industry average of 1.60:1, however to give a better sense of where this stands in the industry, as seen in exhibit 3, it is actually less than the average of the bottom 25% of the industry. The quick ratio is 0.61 is less than the industry is 0.90. Both these ratios serve to point out the lack of cash in this company. The cash flow has been decreasing because, it takes longer to get the money from customers, but the company still needs to pay for its purchases. Also, the company couldn’t go over the $400,000 loan limit, so they were forced to stretch their cash.
Despite the growth in the market, Qantas International’s market share has been falling over the past 10years, from 34% in FY02 to 16% in FY13. The entry of Virgin Australia in 2000 in part explains this, however Virgin’s growth also coincided with the demise of Ansett in 2001 “… Virgin Blue will initially increase capacity on existing routes while evaluating what c...
No matter how a business operates, change is inevitable and affects all businesses. CAMERON SMITH investigates the changes Qantas have had to undergo in order to keep up with their competitors, whilst navigating the challenges of low cost of fares.
These factors have brought about the strategies which are now shaping British Airways for the rears ahead. Firstly, a major cost saving Business Efficiency Programme has been underway for some time, which has enabled the airline to remain to profitable by delivering savings that are targeted to reach £1bn per year by 2001. Secondly, product improvements have included the World Traveller re-launch in 1998 followed by a Club World upgrade including fully flat beds, and improvements to first class and Concorde, plus an on-going drive to improve the basic service standards which passengers expect, such as good punctuality and baggage delivery performance. The airline is also concentrating on attracting more high-yielding premium-fare passengers and operating the routes which maximise profitability. Other significant strategies include a major revision of the airline’s fleet plans and further development of its partnerships and alliances.
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Royal Caribbean has cruises departing from and going to places all over the world. Royal Caribbean’s cruises range in destinations from the Caribbean to Alaska and even Asia, Royal Caribbean provides a different cruise for all personality types as well as interests. Whereas other cruise line such as Carnival and Princess Cruise lines stick to the same mundane destinations and mainly travel to places in the Caribbean (Uhle). Other than just the variety of destinations to choose from, when a cruise is booked with Royal Caribbean the vacationers have a wide range of options to choose from for excursions. Excursions are basically just booked tours for the entire family to enjoy while they are docked in the destination.
It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the
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The Singapore Airlines needs to thoroughly understand the plans being pursued by the British Airways, Cathay Pacific, and Virign Atlantic in improving the comfort and quality of service it provides to its customers. The Singapore Airlines needs to continue differentiate itself by examining the strengths/weaknesses, and key points of these and other competitive airlines.
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