Coral Divers Resort Case Solution Essay

1879 Words Oct 2nd, 2012 8 Pages
Problem: 

The issue that Coral Divers Resort (CDR) is facing is that it has been unable to distinguish itself from other resorts in the New Providence, Bahamas region and has been experiencing declining revenues and unprofitability for the past three years as a result. Other resorts that have been able to specialize in certain segments of the diving industry have been doing well over the past years as the industry continues to grow. CDR must look for opportunities in the diving industry to find a unique niche and gain a competitive edge that will lead to an increase its revenues. The SWOT analysis (Exhibit 1) looks at the current state of CDR and the environment it is operating in.


Conclusion and Recommendation: 


The most effective
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This alternative provides quick cost cutting to reduce CDR’s expenses, provides additional revenue through the new adventure diving option, and is very easy to implement into its operations. This solution manages to post a positive profit in the first year of implementation (Displayed in Exhibit 3). However, this alternative does not provide a sustainable revenue stream into the future because the lack of competitive advantage it builds and the intense competition of other shark diving focused resorts in the area (See decreasing profits from years 2010 to 2011 in Exhibit 3).
Comparison of Solutions:
When it comes to judging the alternatives with the most important factors of profit maximization and competitive advantage, the recommended option to become focused on family diving vacations is much stronger than the option to specialize in shark diving. (Displayed in detail in Exhibit 2). Partnering with Rascals posts the highest first full year profits of $166,000 compared to the adventure focused and cost efficiency alternative that posts a first year profit of $112,000. Further, the partnering with Rascals has projected revenues that are sustained further out in the future because of the competitive advantage gained when moving into the family oriented diving segment rather than the adventure oriented segment. The difference in estimated revenue between the two in 2011 is approximately $620,000 with the family specialization solution

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