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Discussion: Growth of Business

Royal Caribbean's revenue increased from $5.89 billion in 2009 to $6.74 billion in 2010 and their net income increased from $162.42 million to $547.47 million over the same period after applying business intelligence. They operate several cruise line segments that target different customer segments, from contemporary to premium. The debut of their largest cruise ship, the Allure of the Seas, provided a competitive advantage but rising oil prices posed a risk. Their main competitor is Carnival Cruises, which controls nearly half of the global cruise industry market share. The two main business drivers for Royal Caribbean were increasing access to data and better managing the business through understanding customer spending patterns during voyages.

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Ankit Choudhary
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33 views

Discussion: Growth of Business

Royal Caribbean's revenue increased from $5.89 billion in 2009 to $6.74 billion in 2010 and their net income increased from $162.42 million to $547.47 million over the same period after applying business intelligence. They operate several cruise line segments that target different customer segments, from contemporary to premium. The debut of their largest cruise ship, the Allure of the Seas, provided a competitive advantage but rising oil prices posed a risk. Their main competitor is Carnival Cruises, which controls nearly half of the global cruise industry market share. The two main business drivers for Royal Caribbean were increasing access to data and better managing the business through understanding customer spending patterns during voyages.

Uploaded by

Ankit Choudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Discussion

Growth of Business
Their Revenue increased from $5.89 billion in 2009 to $6.74 billion in 2010 and their
Net income increased from $162.42 million in 2009 to $547.47 million in 2010 after
applying business intelligence.
Segmenting
The Royal Caribbean International segment offers cruise options that appeal to the
widest market in RCL's brand portfolio, ranging from the contemporary to premium
customer segments.
Celebrity Cruises: Celebrity Cruises segment is for only RCL's premium customers. It
consists of around 9 ships and nearly 17,000 berths featured with live grass.
Pullmantur: Exclusively for Latin American and Spanish markets that targets
contemporary customer segment.
Azamara Cruises: This segment features only 2 ships, and only to target luxury
customer base of RCL. The target region is North American, U.K., Australia, and
German markets.
CDF Croisires de France: This segment specifically targets the French market and
its first ship, the Bleu de France.
TUI Cruises: This segment is a joint venture with TUI AG in which RCL has a 51%
stake. The segment uses one ship, which it received from Celebrity Cruises, and
operates in the German contemporary and premium market.

Advantage
Debut of the world's largest cruise ship could boost marketability and steal market
share from competitors. The launch of RCL's largest cruise ship, named the Allure of
the Seas, means that RCL has command of the two largest cruise ships on the
market. This could also prove to be an competitive advantage.
Disadvantage
Rising oil prices and reliance on American business. The rising oil prices have
negative effects on the company. Customers will have a negative impact on margins
as the ticket prices will be increased or company have to bear the loss.
Competitor

Carnival Cruises is the significantly the market leader and the largest operator of
vacation cruise ships in the world. With more than 80 cruise liners carrying over 7
million passengers worldwide, the company consists nearly half of the global cruise
industry. The company makes money from ticket sales as well as on-board revenue
from gambling, shore excursions, bar revenues etc.

Business Drivers
There were two main business drivers for Royal Caribbean:
1. Increase access to data
2. Better manage the business
Key Employees were provided limited ability to make decisions to affect onboard
revenue during a long journey. There was no clarity on the detailed guest level
transactions. Most importantly, the long journey information could only be collected
at the end of each journey. The company did not know how well a particular journey
was performing until they returned to port and all the passengers departed. This
was too late to affect change to in long journey revenue.
Top executives found the ability to better manage the business and grow the long
journey revenue by better understanding relationships between guests
demographics and their spending patterns. What country are our passengers from
and, based on historical data, what are they most likely to consume in the form of
food & beverage, on-board activities and on-shore excursions that could lead into
some useful information.
The pattern that revenue builds during a voyage is certainly not linear. One of the
important things was to show the expected pattern that revenue would have dayover-day and let the user see where we are relative to that pattern.

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