Coral Divers Case Study Essay

1097 Words Nov 27th, 2011 5 Pages
After investigating Coral Divers diligently, I am delighted to be hired as a consultant to evaluate Coral Divers strategic situation. Based on my findings, I believe Coral Divers is in a decreasing state of financials and diminishing competitive position. Their net income is negative and increasing in 2005 through 2007. In addition, there is a lack of differentiators at Coral Divers, hindering them from their competition. The issue at hand is whether Coral Divers should take on a potential growth strategy, which consists of adding a family vacation portion to their resort, and an adventure diving aspect. This would enable them to cater to a greater variety of people and allow increased competition.
Exhibit 1.1
Supplier Power *
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Coral Divers revenues are also declining since 2005, I believe due to increasingly competitive markets and no strong differentiators. After analyzing the company, it is clear that Coral Divers needs to use opportunities and strengthen their differentiators. However, it is essential to analyze costs involved with new opportunities compared to potential revenues. The alternatives for Coral Divers includes: Alternative | Cost | Revenue Potential | Family Vacations / Rascals in Paradise | * $40,000 in renovations on rooms * Children’s play structure = $15,000 * Babysitter = $7/hr @ 5 hrs/week = ~$2000/yr | * Return client base * 90% annually * Higher prices for families * ~$1600 per family vacation * 90% rooms booked per week @ $3500 per special family week= $18,900/week = $982,800/yr | Adventure Diving | * $10 per dive = shark dive * Employee discouraged * $15,000 Chain mail suit | * Extra $50 per dive per person | Both | * Large upfront cost | * Good long term investment | Neither | * Differentiators in market | * None * Current operations |

Exhibit 1.4
As a consultant to help assess Coral Divers strategy, I recommend that Coral Divers add the family vacation element to their business and utilize Rascals in Paradise. By adding the Rascals Paradise, Coral Divers will be able to service families more efficiently and easily. In addition,
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