Royal Caribbean Case Analysis

794 Words4 Pages
BAIT Case Analysis I Royal Caribbean Cruises Ltd Issues: External Issue: There appeared an overall depression in traveling industry since 2001. On the one hand, the outside business climate has become perilously changeable. In addition, customers tended to book more at the last minute, putting the company to a disadvantage position due to the mis-prediction of customer resources and an average 15% commission given to agents. On the other hand, the economic downturn also impacted the travel industry. Internal Issue: There is a misalignment of IT Strategy and the whole business strategy in RCCL. RCCL’s corporate strategy is to enhance customer experience, reduce cost, and increase revenue. All these three strategies need technological support from IT department. However, Murphy’s Leapfrog Project was shelved due to financial problem. Causes Analysis: As to external issues, there are mainly three reasons causing overall industry downturn. Firstly, the nightmare of 9/11 deeply stroke customers’ confidence in traveling, leading to a drastic price cut. Secondly, many uncertainties, such as geographical climate, terrorism, terrifying virus, and increasing fuel prices, also gives great pressure to this industry. Thirdly, a fierce competition among three biggest players also gave great buyers’ power. The industry wide capacity is growing much faster than the demand growth. Three main causes to the isolation of IT Department Strategy to the whole business plan are analyzed as follows. To begin with, the matter of money counted for the most obvious excuse for the blackout of previously on-going Leapfrog Project. Actually, the problem is that RCCL did not figure out how best to spend its budgets, not just to meet growing demand but to boost repeat bookings. Further more, the decision of shelving the whole Leapfrog plan indicated that RCCL lost its
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