Royal Caribbean Cruises, LTD: A Case Study
1. Using the Information Systems Triangle as a framework, evaluate the alignment of RCCL's business strategy, organizational strategy, and information systems strategy before Tom Murphy became CIO and then after Tom Murphy took over as CIO (up to 9/11/2001).
Prior to Tom Murphy's tenure as CIO, Royal Caribbean Cruises Line's (RCCL's) business strategies were not fully aligned with the organizational and IT strategies. Tom Murphy was instrumental in bringing these together.
A threefold business strategy was in place. It consisted of 1) design better cruise experiences, 2) reduce costs and 3) grow revenues. It improved guest experiences through luxurious ships with rock-climbing walls and
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Royal Caribbean's expenses for the year were based on much higher volumes (based on the income statement for December 31, 2001), and it had recently invested additional capital in several new ships to maintain. The company had to do what was necessary to survive, until travel returned to previous levels.
The updated business strategy was to stay alive in the face of low volumes and large capital assets. The organizational strategy consisted of immediate layoffs (33% staff and 90% consultants) to focus on support needs only resulting in eliminating new technology talent in favor of retaining legacy support skills. Finally, the IT strategy was to shelf Leapfrog and return to the basics to make common processes efficient. To accommodate business needs and cash flow concerns, Tom followed a micro-strategy approach with smaller, incremental project implementations. In this way, the company was able to continue until volumes began to approach previous levels, and many laid-off employees were reinstated.
3. Should Tom Murphy recommend a modest budget increase, a significant budget increase or a return to the glory days before 9/11 to the corporate planning committee? Support your answer.
By mid-2003, the industry was in recovery mode but prices were still relatively low to entice customers and utilize the hotel capacity available
The company likewise has already employed various strategies in order to maintain the high growth rate of the company. However these strategies is soon to reach its capacity to ensure growth. Based on the case as well, what seems to be lacking in the strategies that the company employed before is marketing, control of costs, and
Organisations today find themselves operating in an environment that is changing rapidly. The process of analysing the implications of these changes and modifying the way that the organisation reacts to them is known as business strategy.
A. Pause Strategy (CI#1, 2, 3): Carnival Corp has been known for health and safety records, a key component in consumer decision-making in the cruise industry. In order to begin improvements, a pause strategy needs to be utilized to allow the company to take a step back from aggressive growth and focus more towards consumer necessities. Many complaints stem from issues like sanitization of rooms, quality of food, and ship malfunctions. Keying in on ship maintenance, restoration, and efficiency will significantly decrease the chance of malfunctions. While implementing more stringent and attentive guidelines towards guest amenities and conditions of food storage/quality to help increase consumer appeal.
The original business strategy, which is still not fully implemented or thought out, is still intact and being somewhat utilized. Part of getting from where we are now to where we want to go, is to put together a comprehensive business and growth strategy plan that, brings about the most results. The original business strategy resembled that of a small business that had the most growth with the least risk. With little risk also means little or no technology. The company has changed, the competition is more intense and the economy is weakened. A new strategy that aligns with technology is essential in order to be successful. As business and technology have become increasingly intertwined, the strategic alignment of the two has emerged as a major corporate issue. With the emergence of IT from the back room to the forefront of business brings the alignment issue under the spotlight like never before. And as
Summary: The cruise line industry has been experiencing a period of massive expansion over the last decade thus heightening the competitive profile for the industry in terms of market share and competitive rivalry. Now cruise industry is one of the most competitive across all.
Carnival is “The World’s Most Popular Cruise Line” with 24 “Fun Ships” operating voyages ranging from three to 16 days in length to the Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, Canada, New England, Europe, and Bermuda. Carnival’s success is attributed to its marketing program directed towards
◦ If the asset group is tested for recoverability while it is classified as held
Cunard is facing a problem as to whether their marketing efforts should go towards tactical promotions or if they should be applied to marketing the overall brand while facing the effects of a recession.
Carnival Cruise’s, Disney Cruises and Norwegian was the only other clear competitors to RCL but in terms of subsidiaries Crystal Cruises was the only direct rival in terms of size and scale and position in the industry but in analyzing the demand increase from 1999 to 2001 a 16.7% increase in demand showed that Celebrity cruises had to maintain their position as a luxury brand to continue being a major player in the industry. The demand was strong and the competition was average, as it relates to entries to market the cruise line industry requires multiple stipulations and regulations required thus unless one of the major players mentioned above acquired a smaller cruise line to increase in operations and services Celebrity’s position was relatively strategic and smart. The competitive landscape was relatively small so quality improvement process should be the main focus during this time, they already created the process needed to offer superior service thus tweaks such as management training, career progression programs and increases in standard of performance programs would set Celebrity’s consistent quality assurance position in the industry to better
Strategy formulation has been acknowledged as one of the most crucial factors of ensuring the long-term growth of the business. However, the manner in which strategy is formulated, and most importantly, the nature of the strategy chosen for the company determines its future position in the marketplace (Grant, 2005).
4. Given Mr James charge to the senior vice president, how would you portray and assess sales and marketing initiatives, expenditures, and outcomes for fiscal 2004 and 2005? 5. What should Kelly Elizabeth propose in her fiscal 2006 sales and marketing plan and budget Astor Lodges Caase 1 4
Carnival’s value proposition was to be a cheaper alternative to land vacations at all inclusive resorts while providing a variety of activities and destinations in one trip. Carnival was the “fun ship”, providing contemporary vacationing to first-time and repeat cruisers. Because customer retention is low, Carnival uses a more traditional style of marketing, focusing on the short-term customer.
The cruise-line industry has changed drastically over the past several years. What was once thought of as a luxury to most people, is now affordable and convenient. The industry now focuses on targeting the working middle class, as well as the upper class. One cruise-line in particular, Carnival, has mastered the informal cruise for the mass market. Carnival offers numerous cruises that are inexpensive and exciting. Nevertheless, Carnival operates internationally with shipyards and ports all over the world. Being an international business, Carnival is affected by many global forces, both controllable and uncontrollable. In order to maintain the corporation’s success, Carnival must be aware of all global forces while
The final uncontrollable force affecting the cruise line industry is competition (Montalvo, 2007). This is probably the least influential force since 91% of the cruise line industry is made up of three companies-Carnival, Royal Caribbean, and Star. These three organizations are world-famous and have developed the cruise concept to the point that there is a cruise that will fit just about every person’s destination dream and budget reality.
Carnival has a strong market expansion strategy for selling the mass-market cruise category and first-time cruisers. Furthermore, Carnival Cruise Lines are successful because they have a clear vision and a commitment to their brand essence,