ROYAL CARIBBEAN CRUISE Harvard Case Solution & Analysis

Royal Caribbean Cruise Case Study Solution

Main issue:

Problems

The company Royal Caribbean Cruises Limited faced major issues and challenges, as the impact of 9/11 had some major effect on the company. Tom Murphy CIO of Royal Caribbean Cruises developed an IT project by the name of “Leapfrog” to provide better customer services, handling employees and its supply chain. But as soon as the devastation of 9/11 occurred in September 2011, the project had to be stopped which was half-way implemented.

Opportunity:

Even though the company has struck a huge blow due to the 9/11 which will cause a problem for the company in the short run. But looking at the long runof the company and its plan to resume the IT project “Leapfrog”, Royal Caribbean Cruise could still have the capability of performing better in the long run comparatively to its competitors.

Analysis:

To analyse the problem and the situation of the Royal Caribbean Cruises, the best tool which would be used in analysing is the PEST. The PEST is used for conducting an external analysis and explains the impact of political, economic, social and technological factors on the company. Since the issue mainly arose due to 9/11 which was an external environment factor, the most appropriate tool used in analysing the condition would be PEST.

PEST

Political:

The political factor which significantly influenced the Royal Caribbean cruise on its IT plan was the occurrence of 9/11. The shipping Cruises operate in a highly regulated political environment where passengers are handled with a lot of restrictions. The impact of 9/11 caused the government to take certain actions such as thecreation of strict rules and regulation, especially in shipping and transportation industries. This caused the passengers to gain anadvantage as they can push more lowering the prices.

Economical

The economic factor which was greatly inclined by the 9/11 as the stock market was closed for some days which had an impact on the Royal Caribbean cruise limited since it is a public company. The company also faced difficulty due to high growing prices and cost of commodities, insurance and others.  The Royal Caribbean had to cut around 50% of employees in which it caused high unemployment in the country.

Social

One of a major problem for the Royal Caribbean Cruise was the customers decline in the airline and shipping industry. The United States of America was in the state of war ever since the 9/11 due to which people have stopped going outside the country and are in astate of fear and high alert. Most of the shipping companies have also started to relocate its business due to the war in Iraq and SRAS.

Technological

The technological factor is generally the main influence on gaining a competitive edge and customer satisfaction. Due to the technological changes, it is essential for the Cruises Company to adapt to the changes in such tough environment. The technology areas that benefits the cruises companies are the improvement of IT on customers, supply chain and employees.

The impact of 9/11 on the company:

The impact which greatly influenced on the Royal Caribbean Cruise was that the company had to stop the IT project “Leapfrog” which the main function was to improve the supply chain, employee system and customers. The program was half way implemented, and its process was halted as soon as the 9/11 occurred. There was also another various influence of 9/11 which was greatly impacted on the company which are discussed below:

  • Total 50% of the company staff had been cut off which significantly reduced its operation and its costs
  • Some of the projects had to be cut off or slow down by shelving the whole thing.
  • The company had to halt the small part of supply chain.
  • IT department had been significantly impacted by the 9/11.

Alternatives:

After addressing the main issue and opportunities of Royal Caribbean Cruise Limited and analysing the external environment, some of the alternatives have been developed in order to solve its issue and availing the opportunities.

ROYAL CARIBBEAN CRUISE Harvard Case Solution & Analysis

 

 

Alternative # 1:

The first alternative the Royal Caribbean Cruise have is to do nothing beyond current expenditure level. The company had already taken so many steps for the survival in the current condition such as thefiring of employees, halting its projects and stopping its main Leapfrog.  One of the options the Royal Caribbean Cruise have is to just to observe and wait for the country’s economic and political condition to improve.

Pros:

  • Taking no necessary actions would generally help the company to save money
  • Would help the company in taking agood decision when an opportunity occurs.
  • Reduction in the operation costs

Cons:

  • Puts the company in a reactive position
  • Competitor gaining advantage if the company decides to take no action

Alternative # 2:

The second alternative which was developed by Murphy was that the company could make an additional investment in the next 12 months in improving the infrastructure of the company. This would be completely funded on improving the reservation system of customers as the program was stopped after 9/11. The issue on the reservation system was that the system was not able to handle 45,000 calls per day, this investment would mostly help in improving the technology for the reservation system.........................

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