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Royal Caribbean Cruise
Team members Team members
Javed Ahmed
Syed Mohsin
Zafar Nazki
Ravis Maqbool
Alekhika
Contents
• EFE Matrix
• IFE Matrix
• Tows Matrix
• Space Matrix• Space Matrix
• BCG Matrix
• IE Matrix
• Grand Strategy Matrix
• QSPM
EFE MATRIX
Key External factors Weight Rating Weighted
Score
Opportunities
1. Growth of cruise industry at 7.6%(average for 20 yrs) and
12 % growth in 2004 compared to 2003
0.08 3 0.24
2. Growth in internet use, around 93%of travelers access
information through net before deciding cruise
0.06 4 0.24
3. Cruise market generates $15mn a year from N America 0.07 3 0.21
4.By 2008, more than 29mn adults aged 25 or older with
household income of $40000 or more to cruise
0.07 4 0.2
household income of $40000 or more to cruise
5. Capacity utilization of cruise's consistently >90% for 2004 0.05 4 0.20
6.Industry target passenger market is between ages of 25 &
40,only 34% of this have ever cruised, 127 Mn have
never cruised.
0.07 2 0.14
7.Presence of players in every segment very low 0.07 3 0.21
8.Projection of >11mn passengers in 2005 (9.4 Mn in N
America)
0.08 3 0.24
9.Only 16 % of US population has ever cruised 0.06 2 0.12
Threats
10.Outbreak of Noro virus on cruise ships 0.05 4 0.20
11. Political unrest in Haiti, UK bombings 0.07 3 0.21
12. Effect of September 11 attack on Cruise industry 0.06 3 0.18
13. Change in US tax regulations 0.02 2 0.04
14. Average cruise customer is 50 yr old with income of
approx $99000
0.04 2 0.08
15. Cruise industry highly dependent on External promotions
and marketing
0.05 3 0.15
Contd….
and marketing
16. Of 10.6 Mn people that took cruise in 2004, 9mn were
from N America
0.04 2 0.08
17. 90% of bookings done through travel agents, who make
more than 50% of their sale.
0.02 3 0.06
18. Highly differentiated competition in terms of ships &
market between the top leader( carnival) and the rest
competitors
0.04 3 0.12
Total score 3.0
IFE MATRIXIFE MATRIX
KEY INTERNAL FACTORS Weight Rating Score
Strengths
1. RCC is worlds 2nd largest cruise line after carnival with 29 cruise
ships and 60,590 berths.
0.08 4 0.32
2. Covers approximately 160 destinations 0.06 3 0.18
3. Leader in ship design and cruise marketing, also order given to
biggest ship (1,60000 tons.)
0.07 4 0.28
4. Owns land properties in Miami, Florida, Cocay, Bahamas which are
given for lease as tourist destinations.
0.06 3 0.18
5. Offered industry’s first fully automated cruise vacation reservation
system helping 250000 travel agents to access it.
0.05 3 0.15
6. Occupancy rate of 105% compared to industrial average of 102%. 0.08 4 0.32
7. 30.2% market share in 2004(3.5mn out of 10.6mn) 0.07 4 0.28
8. Earning per share of $2.39 in 2004 compared to $1.45 in 2003 0.07 4 0.28
9. Offering unique midnight chocolate buffet. 0.04 3 0.12
10. Anchor programs which allows customers to accrue credits that
can be used for cruises, upgrades and RCC products.
0.04 3 0.12
weakness Weight Rating Score
11. substantial drop in RCC stock because of fears of
collapse in tourism resulting from London subway
bombing
0.06 2 0.12
12.In 2004 Company anticipated a decrease in net
income of $9.5mn to $11.5mn in 2005 when the new
tax regulations took effect.
0.04 2 0.08
13. Carnival cruise has 77 ships where as Caribbean 0.08 1 0.08
CONTD…
13. Carnival cruise has 77 ships where as Caribbean
cruise has 29 ships.
0.08 1 0.08
14. U.S presence 82% and other countries 18% 0.07 2 0.14
15. Passenger ticket are the primary source of
revenue for RCC
0.06 2 0.12
16. RCC’s Return on assets in 2004 is 0.039 as
compared to Carnivals 0.06
0.06 1 0.06
2.83
TOWS MatrixTOWS Matrix
S1.RCC is worlds 2nd largest cruise line after
carnival with 29 cruise ships and 60,590 berths.
S2. Covers approximately 160 destinations
S3.Leader in ship design and cruise marketing,
also order given to biggest ship (1,60000 tons.)
S4.Owns land properties in Miami, Florida, Cocay,
Bahamas which are given for lease as tourist
destinations.
S5. Offered industry’s first fully automated cruise
vacation reservation system helping 250000
travel agents to access it.
S6.Occupancy rate of 105% compared to
industrial average of 102%.
S7.30.2% market share in 2004(3.5mn out of
10.6mn)
S8.Earning per share of $2.39 in 2004 compared
to $1.45 in 2003
S9. Offering unique midnight chocolate buffet.
S10. Anchor programs which allows customers to
W1. substantial drop in RCC stock
because of fears of collapse in
tourism resulting from London
subway bombing
W2.In 2004 Company anticipated
a decrease in net income of
$9.5mn to $11.5mn in 2005 when
the new tax regulations took
effect.
W3.Carnival cruise has 77 ships
where as Caribbean cruise has 29
ships.
W4.U.S presence 82% and other
countries 18%
W5. Passenger ticket are the
primary source of revenue for RCC
W6. RCC’s Return on assets in
2004 is 0.039 as compared to
Carnivals 0.06S10. Anchor programs which allows customers to
accrue credits that can be used for cruises,
upgrades and RCC products.
Carnivals 0.06
O1.Growth of cruise industry at 7.6%(average for 20
yrs) and 12 % growth compared to 2004
O2. Growth in internet use, around 93%of travelers
access information through net before deciding
cruise
O3.Cruise market generates $15mn a year from N
America
O4.By 2008, more than 29mn adults aged 25 or older
with household income of $40000 or more to cruise
O5.Capacity utilization of cuisse's consistently >90%
for 2004
O6.Industry target passenger market is between ages
of 25 & 40,only 34% of this have ever cruised, 127
Mn have never cruised.
07.Presence of players in every segment very low
O8.Projection of >11mn passengers in 2005 (9.4 Mn
SO1.Capitalize on growing industry by adding more
and more destinations(s1,s2,o1).
2. Capitalize on present market position and built
more ships to cater the projected demand
(s1,s2,s3,o4).
3. More use of IT enabled online booking systems
to attract more customers.(s1,s2,s3,s5,02,08)
4. Enter maximum number of segments with
more variety of ships (s1,s3,o7).
5.Channelize present resources and marketing
strategies to attract 84% US population , and 127
Mn capable customers(s1,s3,s4s9,o6,o9)
6.Sustain present market position to cope up with
growing demand.(s6,s7,o1,o3)
WO1.Capitalize on growing market
(w1, o1,o3,o4,o6,o8,o9)
2. Capitalize on growing market to
reach the market leader (w3,o1,
o3, o4 ,o8)
3.Aggressive marketing in US (w4,
o9)
Contd..
T1.Outbreak of Noro virus on cruise ships
T2.Political unrest in Haiti, UK bombings
T3.Effect of September 11 attack on
Cruise industry
T4.Change in US tax regulations
T5.Average cruise customer is 50 yr old
with income of approx $99000
T6.Cruise industry highly dependent on
External promotions and marketing
ST1. Use of current market
position and marketing
strategies to overcome the
effect of political unrest
(s1,s2, t2, t3)
2. Use of brand value to
overcome advertising
promotional expenses
WT
1.Prepare to cope up with political
unrest and contingency (w1, t1, t2,
t3)
2.Generate more revenues to
overcome taxes (w2, t4)
3. More global presence required (
w4, t7)
4.Use of more IT enabled systems for External promotions and marketing
T7.Of 10.6 Mn people that took cruise in
2004, 9mn were from N America
T8.90% of bookings done through travel
agents, who make more than 50% of
their sale.
T9.Highly differentiated competition in
terms of ships & market between the top
leader( carnival) and the rest competitors
promotional expenses
(s1,s5,s9,s10,t6)
3. Use of online booking and IT
facilities (s1,s5,t8)
4. Need to show more global
presence ( s1, s2, t7)
4.Use of more IT enabled systems for
online ticket bookings (w5, yt8)
5.Capitalize on current position to
reach market leader (w3, t9)
Space MatrixSpace Matrix
Financial Strengths Rating
1. Working capital negative $ 1412896 1.0
2. Net income as on 2004 is $474691
compared to $280664 in 2003
3.0
3. Earnings per share of $2.39 compared to
last years $1.45
5.0
4. Return on assets is 0.03 compared to
Carnival’s 0.06
2.0
Average 11.0/4 .0 = 2.75
Industrial Strengths Rating
1. Growth 12% in 2004 compared to 7% in 2003 5.0
2.Cruise market generates $15 Mn a year in North
America
5.0
3.Growth in internet penetration 3.03.Growth in internet penetration 3.0
4. Player presence in every segment very low 2.0
Average 15/4 =3.75
Competitive Advantage Rating
1. 2nd largest cruise -1.0
2. Market share 30.2% in 2004 -2.0
3. Calls upon 160 destinations -2.03. Calls upon 160 destinations -2.0
4. Occupancy rate 105% -1.0
5. Leader in ship design and cruise marketing - 2.0
Average -8/5 = -1.6
Environmental Stability Rating
1. Effect of Sept. 11 attack on cruise industry -5.0
2. Political unrest and UK bombing -5.0
3. Change in US tax regulation -4.03. Change in US tax regulation -4.0
4. Norovirus attack -4.0
5. Highly differentiated competition in terms of
ships and market b/w top leader and the rest
-3.0
Average -21/5 = -4.2
Space Matrix
BCG MatrixBCG Matrix
Relative Market share Position
High Medium Low
1.0 0.5 0.0
Market share
� RCC (30.4%)
� Carnival (50.2%)
�Relative Market Share Ratio=0.6
�Industry growth= >7
RCCL
II I
III IV
High 20
Medium 0
Low - 20
Industry
Growth
Rate
IE MatrixIE Matrix
IFE Total Weighted Score
Strong
3.0 to 4.0
Average
2.0 to 2.99
Weak
1.0 to 1.99
IFE= 3.0
EFE=2.83
Strategy-Grow and Build
II IIII IIIIII
RCCLRCCL
IVIV VV VIVI
VIIVII VIIIVIII IXIX
High
3.0 to 4.0
Medium
2.0 to 2.99
Low
1.0 to 1.99
EFE
Total
Weighted
Score
Grand strategy MatrixGrand strategy Matrix
QSPMQSPM
Strategies
• S1= Channelize present resources and
increase market presence in North America.
(Market Penetration)
• S2= Increase Global Presence, Create New
Markets. (Market Development)
Key External factors Weight AS1 TAS1 AS2 TAS2
Opportunities
1.Growth of cruise industry at 7.6%(average for 20
yrs) and 12 % growth in 2004 compared to 20030.08 4 0.32 2 0.16
2. Growth in internet use, around 93%of travelers
access information through net before deciding
cruise
0.06 3 0.18 1 0.06
3. Cruise market generates $15mn a year from N
America0.07 4 0.28 1 0.07
4.By 2008, more than 29mn adults aged 25 or older
with household income of $40000 or more to cruise0.07 4 0.28 3 0.21
Market penetration Market Development
with household income of $40000 or more to cruise
5. Capacity utilization of cruise's consistently >90%
for 20040.05 4 0.20 3 0.15
6.Industry target passenger market is between ages
of 25 & 40,only 34% of this have ever cruised, 127
Mn have never cruised.
0.07 2 0.14 4 0.28
7.Presence of players in every segment very low 0.07 2 0.14 3 0.21
8.Projection of >11mn passengers in 2005 (9.4 Mn in
N America)0.08 4 0.28 1 0.08
9.Only 16 % of US population has ever cruised 0.06 4 0.24 1 0.06
Threats weight AS1 TAS1 AS2 TAS2
10.Outbreak of Noro virus on cruise ships 0.05 - - - -
11. Political unrest in Haiti, UK bombings 0.07 1 0.07 3 0.21
12. Effect of September 11 attack on Cruise industry 0.06 1 0.06 4 0.24
13. Change in US tax regulations 0.02 1 0.02 4 0.08
14. Average cruise customer is 50 yr old with income of approx
$990000.04 2 0.08 4 0.16
15. Cruise industry highly dependent on External promotions and 0.05 3 0.15 2 0.1015. Cruise industry highly dependent on External promotions and
marketing 0.05 3 0.15 2 0.10
16. Of 10.6 Mn people that took cruise in 2004, 9mn were from N
America0.04 4 0.16 2 0.08
17. 90% of bookings done through travel agents, who make more
than 50% of their sale. 0.02 - - - -
18. Highly differentiated competition in terms of ships & market
between the top leader( carnival) and the rest competitors0.04 2 0.08 3 0.12
KEY INTERNAL FACTORS Weight AS1 TAS1 AS2 TAS2
Strengths
1. RCC is worlds 2nd largest cruise line after carnival
with 29 cruise ships and 60,590 berths.0.08 2 0.16 3 0.24
2. Covers approximately 160 destinations 0.06 3 0.18 4 0.24
3. Leader in ship design and cruise marketing, also
order given to biggest ship (1,60000 tons.)0.07 3 0.21 4 0.28
4. Owns land properties in Miami, Florida, Cocay,
Bahamas which are given for lease as tourist
destinations.
0.06 2 0.12 4 0.24
5. Offered industry’s first fully automated cruise 0.05 2 0.10 3 0.155. Offered industry’s first fully automated cruise
vacation reservation system helping 250000 travel
agents to access it.
0.05 2 0.10 3 0.15
6. Occupancy rate of 105% compared to industrial
average of 102%.0.08 4 0.32 3 0.24
7. 30.2% market share in 2004(3.5mn out of 10.6mn) 0.07 2 0.14 4 0.28
8. Earning per share of $2.39 in 2004 compared to
$1.45 in 20030.07 2 0.14 3 0.21
9. Offering unique midnight chocolate buffet. 0.04 - - - -
10. Anchor programs which allows customers to accrue
credits that can be used for cruises, upgrades and RCC
products.
0.04 2 0.08 3 0.12
weakness Weight AS1 TAS1 AS2 TAS2
11.Substantial drop in RCC stock because of fears
of collapse in tourism resulting from London
subway bombing
0.06 2 0.12 3 0.18
12.In 2004 Company anticipated a decrease in
net income of $9.5mn to $11.5mn in 2005 when
the new tax regulations took effect.
0.04 1 0.04 4 0.16
13. Carnival cruise has 77 ships where as
Caribbean cruise has 29 ships.0.08 3 0.24 2 0.16
14. U.S presence 82% and other countries 18% 0.07 2 0.14 4 0.28
15. Passenger ticket are the primary source of
revenue for RCC 0.06 - - - -
16. RCC’s Return on assets in 2004 is 0.039 as
compared to Carnivals 0.060.06 2 0.12 4 0.24
Sum Total Attractive Score4.79 5.29
Favourable Strategy is to create new Markets globally, (Market Development)
Reference
• www.royalcarribean.com
• www.cruiseindustrynews.com
• www.cruising.org
• www.iccl.org• www.iccl.org
Strategic Management by Fred R. David
Thank you
Relative Market share Position
High Medium Low
1.0 0.5 0.0
Market share
� JK Cement (2.6%)
� ACC (12%)
�Relative Market Share Ratio=0.2
IFE = 2.61
EFE = 2.59
II
JK Cement
I
III IV
High 20
Medium 0
Low - 20
Industry
Growth
Rate
IFE Total Weighted Score
Strong
3.0 to 4.0
Average
2.0 to 2.99
Weak
1.0 to 1.99
IFE= 3.0
EFE=2.83
High
3.0 to 4.0
Medium
2.0 to 2.99
Low
1.0 to 1.99
IIJK Cement
I
III IV
EFE
Total
WeightedScore
IFE Total Weighted Score
Strong
3.0 to 4.0
Average
2.0 to 2.99
Weak
1.0 to 1.99
IFE= 2.61
EFE= 2.59
Strategy-Hold and Maintain
High
3.0 to 4.0
Medium
2.0 to 2.99
Low
1.0 to 1.99
I II III
IV V
JK Cement
VI
VII VIII IX
EFE
Total
WeightedScore
