Case Assignment Royal Caribbean Essay

2485 Words Dec 4th, 2014 10 Pages
a. Describe Royal Caribbean’s business. How important are international operations for the company?

At the end of the 1960’s, Wilhelmsen and Stephan came up with the profitable idea that the wealthy residents of Florida will consider paying top dollar amounts to cruise to the Caribbean Islands as a great alternative for a week or weekend getaway. After proposing this idea to Norwegian entrepreneurs, Royal Caribbean Cruise lines, was born.
Forty five years and forty ships later, based out of Miami Florida, Royal Caribbean is the second largest cruise line in the world, behind frontrunner Carnival. RCCL operates its ships under the brand names Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Cruises, and Croisières
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Quantum of the Seas will be deployed to Asia, currently considered the emerging market with the highest potential for cruising revenue.

The global cruise industry continues to be the fastest growing travel sector in the world with strong consumer attention and substantial cruise line investment in a diversity of mind-blowing ships that travel to the most exotic locations in the world and offer exceptional vacation experiences.

b. Discuss the main opportunities and risks faced by Royal Caribbean due to its global nature.

Some of the opportunities from global perspectives would be vertical growth, such as constant improvement, close financial monitoring, reducing costs, differentiating, or horizontal growth as territorial expansion, occupying new potential niches.
Product differentiation is one of the main strategies in order to face some of the risks; however, Royal Caribbean, as well as, Carnival Corporation and Norwegian Cruises are the most visible players in this industry. It is not easy to differentiate with their huge size, economies of scale. The industry is very lucrative, has high profit margins; hence, the level of risk is extremely high as well.

Some of the risks Royal Caribbean face could be anything from tax laws and regulations, economic issues, geo-political uncertainties, terrorist activities, armed conflicts, pirates, oil spills, and even unavailability of air service and other conditions, like unusual weather, or more serious natural