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Case Analysis RCC
Transcript of Case Analysis RCC
Dusan Vasic
Royal Caribbean Cruises Ltd.
Step 1
Vision statement
Our vision is to empower and enable our Employees to deliver the best vacation experience
for our Guests, thereby generating superior returns for our shareholders and enhancing the
well-being of our Communities.
Mission statement
We always provide services with a friendly greeting and smile. We anticipate the needs of our
customers. We take ownership of any problem that is brought to our attention. We are loyal to
Royal Caribbean and Celebrity and strive for continuous improvement in everything we do.
Objectives
Royal Caribbean Cruise (RCC) ultimate objective is to maximize long-term shareholders
value.
Strategies
RCC strategy is to increase the awareness and market penetration of their brands globally.
Step 2
Vision
We intend protect the health, safety and security of our guests and employees and protect the
environment in which our vessels and organization operate.
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Mission
Focus on cost efficiency, manage our operating expenditures and ensure adequate cash and
liquidity, with the overall goal of maximizing our returns on invested capital and long-term
shareholder value.
Step 3
Opportunities
Construction of new mega-ships creating publicity
European Market
Increase in online booking by customers
Increase in social media popularity
Six primary cruise line brands
Asia’s large population market
Moderate growth in the U.S. economy
Threats
Cruise ships are heavily regulated
Different countries have different laws and regulations
Environmental impacts of large ships
MARPOL laws and regulations
Rising fuel costs
Slow recovering world financial crisis
More efficient competitors
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Step 4
Critical success factor RCC, Ltd. Carnival Norwegian Cruise Weight Rating Score Rating Score Rating Score
Market Share 0.30 3 0.90 4 1.20 2 0.60Advertising 0.20 3 0.60 4 0.80 1 0.20Revenue Expectation 0.10 3 0.30 4 0.40 3 0.30Financial Position 0.10 4 0.40 4 0.40 3 0.30Customer satisfaction 0.10 3 0.30 3 0.30 3 0.30International expansion 0.10 3 0.30 4 0.40 2 0.30Cruise Entertainment 0.10 3 0.30 3 0.30 3 0.30
Price comparative 0.10 2 0.20 2 0.20 2 0.20TOTAL 1.00 3.30 3.80 2.50
According to the Matrix, it is evident that Carnival Cruise is dominating the market. Carnival
Cruise has 50% market share and it generates much more profits then RCC. Therefore, RCC
should not try to overtake Carnival rather be more efficient in their operations than Carnival.
In Addition, Norwegian Cruise does not seem to be a big threat to RCC.
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Step 5
Opportunities Weight Rating Weighted
Score
Construction of new mega-ships creating
publicity0.10 4 0.40
European Market 0.10 2 0.20
Increase in online booking by customers 0.07 4 0.28
Increase in social media popularity 0.03 3 0.09
Six primary cruise line brands 0.08 3 0.24
Asia’s large population market 0.05 2 0.10
Moderate growth in the U.S. economy 0.07 3 0.21
Threats Weight Rating Weighted
Cruise ships are heavily regulated 0.10 4 0.40
Different countries have different laws and
regulations 0.09 3 0.27
Environmental impacts of large ships 0.04 3 0.12
MARPOL laws and regulations 0.11 3 0.33
Rising fuel costs 0.07 3 0.21
Slow recovering world financial crisis 0.03 3 0.09
More efficient competitors 0.06 2 0.12
TOTAL 1.00 3.06
According to the EFE Matrix value of 3.06, I would have to say that the company is
responding in an outstanding way to existing opportunities and threats in its industry.
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Step 6
Strengths
Strong Market Position
Brand Recognition
Increasing Revenue over last 5 quarters
Customer Satisfaction
2nd biggest Cruise liner by Market Share
2 new high class ships on order
Different Cruise lines from its competitors lines
Weaknesses
Primarily targeting higher income customers.
Political unrest in the Mediterranean
Piracy off the African coast reduced the demand
Recent Shipwrecks decreased the demand
Dependency on high cost fuel
Expansion into unknown markets (EU, Asia)
Step 7
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Strengths Weight Rating Weighted
Score
Strong Market Position 0.10 4 0.40
Brand Recognition 0.10 3 0.30
Increasing Revenue over last 5 quarters 0.09 4 0.36
Customer Satisfaction 0.04 3 0.12
2nd biggest Cruise liner by Market Share 0.04 3 0.12
2 new high class ships on order 0.07 3 0.21
Different Cruise lines from its competitors lines 0.06 2 0.12
Weaknesses Weight Rating Weighted
Score
Primarily targeting higher income customers. 0.13 4 0.52
Political unrest in the Mediterranean 0.05 3 0.15
Recent Shipwrecks decreased the demand 0.14 2 0.28
Piracy off the African coast reduced the demand 0.07 3 0.21
Dependency on high cost fuel 0.10 4 0.40
Expansion into unknown markets (EU, Asia) 0.01 2 0.02
TOTAL 1.00 3.21
According to the IFE Matrix score of 3.21 for RCC, I would have to say that the company is
doing well managing its Strengths and Weaknesses. In addition, by looking at the IFE Matrix
one can determine the possible strategy for the company going forward.
Step 8
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Strengths-Weakness-Opportunities-Threats Matrix (SWOT)
SWOT Strengths:
1. Strong Market Position2. Brand Recognition 3. Increasing Revenue over last 5
quarters 4. Customer Satisfaction 5. 2nd biggest Cruise liner by Market
Share 6. 2 new high class ships on order 7. Different Cruise lines from its
competitors lines
Weaknesses:
1. Primarily targeting higher income customers.
2. Political unrest in the Mediterranean
3. Piracy off the African coast reduced the demand
4. Recent Shipwrecks decreased the demand
5. Dependency on high cost fuel 6. Expansion into unknown
markets (EU, Asia)
Opportunities:
1. Construction of new mega-ships creating publicity
2. European Market 3. Increase in online booking by
customers 4. Increase in social media popularity5. Six primary cruise line brands 6. Asia’s large population market 7. Moderate growth in the U.S.
economy
SO Strategies
1. Find new Ports (S1, O1)
2. Increases Internet accessibility
(S2, O3)
3. Expand into Asia (S5, O6)
WO Strategies
1. Reduce Prices to target
middle-high class (W1, O3)
2. Offer discounts to European
Market customers (W2, S2)
3. Advertise safety of new ships
(O1, W4)
Threats:
1. Cruise ships are heavily regulated 2. Different countries have different
laws and regulations 3. Environmental impacts of large
ships 4. MARPOL laws and regulations 5. Rising fuel costs 6. Slow recovering world financial
crisis 7. More efficient competitors
ST Strategies
1. Increase employee productivity
(T7, S1)
2. Develop more energy efficient
ships (T5, S6, S3)
3. Be protective against laws and
regulations (T1, T2, S3)
WT Strategies
1. Reduce Energy use (T3, W5)
2. Expand to Asia instead of
Europe (T1, T2, W2)
3. Increases safety awareness
(T4, T3, W4)
According to SWOT analysis the RCC is doing good overall. However, RCC should focus its
attention on safety and quality of its passengers as well as safety of marine life. RCC should
closely evaluate its opportunities of expanding into unknown markets.
Strategic Position and Action Evaluation Matrix (SPACE)
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-1 -2 -3 -4 -5 -6 -7
Internal Strategy Position
Financial Strength (FS)
Return on investment 3.00
Cash flow 4.00
Inventory turnover Revenue growth
2.004.00
Average Financial Strength 3.25
External Strategy Position
Environment Stability (ES)
Technological changes -2.00
Laws and Regulations -4.00
Customer Demand -3.00
Competition -3.00
Average Environment Stability -3.00
Competitive Advantage (CA) Market share -3.00 Cruise entertainment -3.00 Customer satisfaction -2.00 Building of new ships -2.00 Average Competitive Advantage -2.50
Industry Strength (IS) Growth potential 4.00 Profit potential 3.00 Financial stability 4.00 Average Industry Strength
3.67
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0 +1 +2 +3 +4 +5 +6 +7
+1 +2 +3 +4 +5 +6 +7
-7 -6 -5 -4 -3 -2 -1
X-Axis= .25Y-Axis = 1.17
The BCG Matrix
Return on investment Cash flow Inventory turnover Revenue growth
Stars II
Technological changes Laws and Regulations Customer Demand Competition
Question Marks I
Market share Cruise entertainment Customer satisfactionBuilding of new ships
Cash Cows III
Growth potential Profit potential Financial stability
Dogs IV
According to the BCG Matrix, I would have to say that RCC is a Stars II organization. It has
best long term opportunities for growth and profitability. However, I would argue that it is
also a Question Market I, because of rapidly changing factors in the industry.
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High Medium Low 1.0 .50 0.0
Relative Market Share Position
According to my Space Matrix RCC should be more aggressive in their operations
The Internal-External (IE) Matrix
Grow
I
Grow
II
Grow
III
Hold
IV
Hold
V
Hold
VI
Divest
VII
Divest
VIII
Divest
IX
EFE Score =3.06 IFE Score = 3.21
According to the IE Matrix, I would have to say that RCC is growing rapidly. This is also
evident by the company profit increases over the last year and a half.
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Strong Average Weak 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
The IFE Total Weighted Scores
The EFE Total Weighted Scores
3.0 2.0 1.0
The Grand Strategy Matrix
According to The Grand Strategy Matrix, I would put RCC in Quadrant I. Therefore, RCC
should continue to concentrate on current market conditions. In addition, RCC should think
about backward, forward, or horizontal integration in their strategy going forward.
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SLOW MARKET GROWTH
RAPID MARKET GROWTH
STRONG COMPERATIVE POSITION
WEAKCOMPERATIVE POSITION
Quadrant II
Return on investment Cash flow Inventory turnover Revenue growth
Quadrant IV
Growth potential Profit potential Financial stability
Quadrant III
Market share Cruise entertainment Customer satisfactionBuilding of new ships
Quadrant I
Technological changes Laws and Regulations Customer Demand Competition
Royal Caribbean Cruise
The Quantitative Strategic Planning Matrix (QSPM)
Strengths Weight AS TAS AS TAS
Strong Market Position 0.10 0 0.00 3 0.30
Brand Recognition 0.10 3 0.30 4 0.40
Increasing Revenue over last 5 quarters 0.09 3 0.27 3 0.27
Customer Satisfaction 0.04 0 0.00 4 0.16
2nd biggest Cruise liner by Market Share 0.04 3 0.12 3 0.12
2 new high class ships on order 0.07 2 0.14 2 0.14
Different Cruise lines from its competitors lines 0.06 1 0.06 2 0.12
Weaknesses Weight AS TAS AS TAS
Primarily targeting higher income customers. 0.13 2 0.26 2 0.26
Political unrest in the Mediterranean 0.05 0 0.00 0 0.00
Recent Shipwrecks decreased the demand 0.14 0 0.00 0 0.00
Piracy off the African coast reduced the demand 0.07 0 0.00 0 0.00
Dependency on high cost fuel 0.10 0 0.00 0 0.00
Expansion into unknown markets (EU, Asia) 0.01 1 0.01 2 0.20
Subtotal 1.00 1.16 1.97
Opportunities Weight AS TAS AS TAS
Construction of new mega-ships creating publicity 0.10 4 0.40 4 0.40
European Market 0.10 2 0.20 3 0.30
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Global Market Expansion Penetration
Increase in online booking by customers 0.07 3 0.21 3 0.21
Increase in social media popularity 0.03 2 0.06 2 0.06
Six primary cruise line brands 0.08 0 0.00 0 0.00
Asia’s large population market 0.05 2 0.10 4 0.20
Moderate growth in the U.S. economy 0.07 4 0.28 4 0.28
Threats Weight AS TAS AS TAS
Cruise ships are heavily regulated 0.10 1 .10 1 .10
Different countries have different laws and regulations 0.09 0 0.00 0 0.00
Environmental impacts of large ships 0.04 2 .08 3 0.12
MARPOL laws and regulations 0.11 2 0.22 2 0.22
Rising fuel costs 0.07 1 0.07 3 0.21
Slow recovering world financial crisis 0.03 1 0.03 1 0.03
More efficient competitors 0.06 3 0.18 3 0.18
TOTAL 1.00 3.09 4.28
According to the QSPM Matrix, RCC should definitely focus on market penetration. In order
to expand market penetration RCC should focus on targeting different age group. By targeting
different age group RCC could potentially expand its market share and potentially take more
market share in the future.
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Step 9
Some of the specific strategies that I would recommend for RCC would be to do the
following:
Direct target marketing to groups ages 25-40
Establish more departure U.S. port locations such as of coast of California or Georgia
and Florida.
Establish more departure ports in Asia such as Hong Kong and Shanghai, China.
On the other hand, the long-term objective that I would recommend to RCC would be to
invest in researching and potentially building new ships that run on cleaner and less harmful
fuel.
Step 10
The recommendations from step 9 could be implemented in the following way:
Aggressive approach in marketing to target groups or market, specifically groups ages
25-40.
Increase partnership with other entertainment and cruise companies
Intensive market research in Asia, including governmental regulations.
On the other hand, the long-term objective could be implemented by creating or establishing
compliance with the national and international research agencies that focus on developing
cleaner energy.
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Step 11
Specific annual objectives and policies that I would recommend would be to implement
employee incentives to attain industry leader status in customer service. In addition, I would
recommend to RCC to improve employee training with emphasis on the company’s mission,
values, and code of ethics. By doing this, the organization might develop customer loyalty and
possibly have regular customers that otherwise would not be possible.
Step 12
Obviously, current economic conditions include much speculation on the duration and
severity of the downturn. However, RCC was able to generate steady growth over the last two
years. Therefore, Financials and operational efficiencies must take a priority in the short-term.
In addition, work force size should be monitored and adjusted to ensure long-term
organizational success.
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