Weebly



Senior Case: Fred ButlerCoral Divers Resort (Revised)SMG 495Fall 2013Introduction: Coral Divers Resort, which has been in business for 10 years. Over the years, it was noted as an established and solid diving resort located in the Bahamas. It has a beachfront location and although it is small it is well-regarded and known as an all-around dive resort for tourist. The resort property is located on a deep water channel on the southwest coast of the island of New Providence in the Bahamas. The three acre property had beach access and featured six cottages, and 6 unit attached motel-type structure, and a small family restaurant and bar within walking distance. Greywell had 3 boats that could carry 8-20 passengers and also had facilities for air dispensing, equipment repair, rental and sale, and a tank storage. The resort has a staff of 11 including two boat captains, two mates, a housekeeper, a groundskeeper, a person who minded the office/store, and four scuba diving instructors. Greywell’s wife, Margaret, is a part time employee taking care of administrative activities such as accounting and payroll. She spends the rest of her time at home looking after their two children. Jonathon is a fulltime diving instructor at the resort certified by both PADI and NAUI. Jonathon is faced with a loss of revenues over the past three years and he needed to do something to increase business before the situation continued to get worse. He was indecisive on if he should add specialized features that would help distinguish his resort from others, relocate, or focus on another type of diving or family oriented vacation resort which will result in additions and investments to current operations. Rascals in paradise, which is a travel company that specialized in family diving vacations, offered him help on how to convert his resort to a more family oriented resort by showing him demographics of the area, how to accommodate for children and just about how much things were going to cost him. Even with the advice, Jonathon didn’t know what would be best for the resort without costing him an extensive amount of money. Mission: The primary mission of Coral divers resort is to provide fulfilling enjoyment of the vacation site being noted as one of the safest and knowledgeable scuba diving resorts located in the Bahamas. Proper lessons and safe dives are what we offer and with our well know instructors, we strive to be the resort tourist chose to check into and dive with for many years to come. Customers: Scuba divers all over the worldProducts or services: Vacation resort in the Bahamas, scuba diving and lessons.Markets: Competes geographically in the BahamasTechnology: Advanced/certified instructors Concern for survival, growth, profitability: Yes this organization strives to be not only the best resort but also one of the well-known and safe scuba diving resorts in the Bahamas for years to come. Philosophy: Fulfilling enjoyment of the place and promoting safe and instructional dives.Self-concept: They have well known and certified dive instructors at their resort. Concern for public: There is much emphasis on the safety of each diver.Concern for employees: The well-known and certified instructors are a great asset to the company. Vision: The coral divers resort is committed to excellent products and services. They want to ensure every dive goes injury free and is conducted safely as possible. We want to be recognized worldwide as the best recreational scuba diving resort in the world and be the number 1 diving resort in the Bahamas.Core ideology- Coral divers resort reason for existence is to provide not only the best scuba diving experience but also the safest with our knowledgeable instructors. Core Values- Quality/safe dives, customer satisfaction (consumer 1st), loyalty to our customers, feelings of freedom and enjoyment, adventurist get away Core Purpose- Coral Divers resort’s core purpose is to give customers and tourist the best experience of their lives at one of the best vacation spots in the world.Envisioned future- Coral Diver’s wants to become the leading scuba diving resort located on New Providence Island, the capital of the Bahamas.BHAG- Become the Bahamas leading diving resort. Vivid Description- We will ensure that our customers have the greatest experience of their lives here at our resort. We want to succeed in the overall excitement, stimulation and visual gratification seeing as that were located on the most beautiful island in the world. Another 10 years from now we’ll be known as the best diving resort specializing in safe and quality dives. Due to overall excitement and feelings of freedom customers would not want to leave this resort Critical milestones:Decided to open diving resort on New Providence Island (Nassau) which is the capital of the Bahamas in 1998. More than two-thirds of the population is located on the island (180,000).Resort located on the quieter side of the island which consisted of more residential and neighborhoods areas.Coral Divers Resort being affiliated and instructors getting certified through organizations such as PADI (Professional Association of Diving Instructors) and NAUI (National Association of Underwater Instructors).Hired a former U.S Navy SEAL to work for coral divers resort as a way for them to gain experience. Coral divers created a price guide with only 2 types of packages. (Standard accommodations and deluxe accommodations). Put more money into the advertising and promotion of the operation in 2006 and 2007Renovated 4 of the 6 cottages on the three-acre land of property in 2006 and 2007. New paint, a kitchenette, tile floors, a microwave, a color TV, and a DVD player. The renovated units Jonathon wanted to be used for families and couples. Took out a bank loan of $ 20,000 in the year of 2007.Reduced much of their inventory in hope to cut back on cost in fear of bigger loss in revenues. In 2008 with the company being in business for 10 years, revenues continued to decrease until they became negative revenues totaling at $ - (5,174)Previous Strategies:The renovation of four of their six cottages on the resort for families and couples. They added color TV’s and DVD players because families became a rapid growing segment in the industry which means parents are bringing their children along. Some of the younger children won’t be able to experience some of the things the diving resort offers. Meaning they will spend a lot of time in the cottages or motel units. With the addition of some of the extras such as TV’s, a DVD player, and microwave, they will be able to accommodate for more families at their resort. (Product Development)The coral divers resort being affiliated with PADI which is the largest certifying organization in the world and NAUI(Joint Venture)Cut back on the amount of inventories they kept. There was a rapid decrease in the assets from the year 2005 to 2007 (Retrenchment) Increased advertisement and promotion efforts on the island of new Providence to attract more customers to their resort. (Market Penetration)Not many previous strategies implemented as the case shows. Current strategies: In this case Jonathon Greywell doesn’t really have or state any current or ongoing strategies at this point. Within his 10 year existence, he is now starting to see is revenues become negative. He has been getting advice on what he should do from Rascals in Paradise so that he could come up with some strategies that will help his company incur revenues or ultimately help Jonathon decide if he should just pack up and leave the area and start somewhere new.SWOT analysisStrengths:Location being at the capital of the Bahamas (New Providence Island, pop. 180,000)Beachfront locationAnnual revenues had reached a high of 554,000Well regarded and all around diving resortMany local divers preferred Greywell’s resort to tourist rather than other crowded resorts Located on a deep water channel on the southwest coast of the island.Three-acre property of land.Featured six cottages with their own kitchenette, full bath, a bedroom with two full-sized beds and a living room with two sleeper sofas. Upgraded four of the six cottage units adding new paint, tile floors, a microwave, a color TV and a DVD player.Six unit motel-type structure Solid reputation A small family-run restaurant and bar within walking distance of the resort. Coral Divers resort being affiliated with PADI and NAUI which were certification organizationsHiring a former Navy SEAL to gain experienceGreywell had 3 boats that could carry from 8-20 passengers at a timeHad storage facilities for air dispensing, equipment repair, rental and sale, and tank storageDivers were always accompanied/supervised by a dive master who was responsible for the safety and conduct of the divers underwater Site seeing that happens on the boat ride out to the dives Located at one of the three main diving locations outside of the U.SWeaknesses: One of the smaller resorts on the island Revenues were negative $(5,174) in the year 2008Many professional dive operations located in the same areaOnly offering a few different types of dives Profits only being in the two percent rangeNo strong identity that distinguished themselves from the other diving and resort operators Located on the quieter side of New Providence Island (Southside)Space in the resort wasn’t being used Small staff of 11 Margaret, Jonathon’s wife, working part-time at the resort Other diving instructors not having certifications or proper backgrounds.Resort guests could ride and dive free of charge if enough paying divers were signed upMinimal package deals on their pricing guide. Renovating four of the six units cost them a lot of moneyNo select target marketServices or products weren’t differentiated Long boat trips out to dives Opportunities: Scuba diving had grown steadily in popularity over the last 20 yearsFrom 1989 until 2001, certifications increased an average of 10 percent each yearIn 2007, the number of certified divers worldwide was more than 22 millionThe National Sporting Goods Association, which conducted annual sports survey’s, projected the number of active divers in the U.S at 2.1 millionMarket share data from resort destinations showed 1.5 million active traveling U.S-based scuba divers, not including resort diversApproximately 65% of certified scuba divers were male, 35% were femalesAbout half of all scuba divers were marriedApproximately 70% of scuba divers were between the ages of 18-34Scuba divers were well educated and had an average annual household income of 75,00045% of divers traveled with their families Warm climate in the Bahamas Diving course available to take Steady increase of junior divers New Providence Island best known for its major population centerMany banks located in the Bahamas New Providence Island famous for underwater filmingNumerous types of diving available Added amenities ranging from babysitting to kids camps to accommodate for families who brought their childrenDiving resorts being affiliated with PADI and NAUIFamily oriented resorts usually strived the most in the industryPADI having multiple main headquarters located around the worldFilms being shot at some of the underwater dive sites Magazine publishing’s and promotions Threats:Cozumel in Mexico and the Cayman Islands were the other top diving destinations outside the U.SBuying power of the divers Junior divers being able to earn certification at the age of 10Operators losing divers to other resorts due to better accommodations/deals/packagesShark fatalities and incidents Lack of promotion and programs Insurance not covering accidents that were scuba-related Safety of children and younger divers Caribbean diving market/operators Growing interest in the industry of more adventurist dives High pricing cost of travel/resorts/diving Decrease in air travel due to September 11, 2001 Bleaching impact of climate change in the coral reefs. Cost of required equipment Competitive analysis: Threats of entry (Barriers) – The barriers of entry into the scuba diving industry are high because it would be hard to enter this industry. This also means that the threats are low. To enter the scuba diving industry there will be a lot of capital requirements involved such as all of the specified equipment, proper facilities, and proper certification required to conduct dives. Each resort is going to differentiate from one another based on the types of products and services they’ll offer to their customers. In the industry it would be hard for a new scuba-resort to strive because customers are loyal if they enjoyed their experience and even refer others to that specific resort. New resorts would struggle gaining overall identification. To construct dives instructors must be certified through one or more of the international and domestic organizations. Some government regulations would be present.Power of suppliers – There are many specialized materials needed in the scuba diving industry such as face mask, pressurized gas tanks, buoyancy compressor, etc. There won’t be many suppliers in the industry that will supply those specific products so the supplier has the power in this industry. When buying these supplies you may agree to contracts that you pay monthly or bimonthly and so if you chose to switch to another supplier you may be subject to pay exit and cancellation fees. Power of buyers – The buyers would have the power in this industry because there more than likely to spend their money on the diving resort with the most favorable prices. Scuba diving is mostly done vacationing and people often vacation with their families meaning they are looking to find the best resorts but also for the best price. The buyer in this industry always feels if they can find better prices.Threat of substitutes – In the scuba diving industry, substitutes would be any other adventure sport that people would take part in. These substitutes could be biking, horseback riding, surfing, golfing, etc. Jockeying/Rivalry- The scuba diving industry would be intense and warlike because there are many scuba and adventure diving resorts located around the world and each of them is in direct competition with one another. They want tourist to visit there resorts and want frequent customers to refer other there as well. If someone wanted to start up a new scuba diving resort they would find it hard to survive due to the direct competition. If their product isn’t differentiated from the others then they won’t stand out and be successful.IFEEFEFinancial ratios: For the year 2007 (Most recent)Return on equity = Net income/ Shareholders equity = (34,559)/39,705 = -.87Return on assets = Net income/ Total assets = (34,559)/22,106 = -1.56Debts to assets ratio = Total liabilities/Total assets = 88,467/601,206 = 0.15Total revenues – expenses = 502,908 – 537,467 = -34,599Financial analysis: Over the last three years, Jonathon is seeing revenues for the Coral Divers Resort declining and overall bookings to his resort are flat. In reviewing his financial statements the biggest expense he had incurred was the cost of repairs/ renovation of the cottage. This costs him thousands of dollars and although it was a great thing for him to do, the problem is that he has no differentiation at his resort so people simply aren’t checking in and diving at his resort as much as he’d like to. Due to the renovation he has experience more expenses towards utilities as well. As far as revenues go, over the three years, diving/lodging packages and day diving haven’t been good sources of revenues. They have drastically lessoned from the year 2005 to 2007. This shows that year after year less and less people are looking to have their vacations at this resort. Jonathon had even said it himself, there just isn’t anything that the Coral Divers Resort has done to distinguish themselves in any particular aspect to bring in customers. TOWS Matrix:Opportunities Scuba diving had grown steadily in popularity over the last 20 yearsFamily oriented resorts usually strived the most in the industrySteady increase of junior diversWide array of dive types 1.5 million U.S traveling divers(Outside U.S) Magazine publishing and promotions Threats Shark fatalities/incidents Not responsible for scuba-related accidents Other dive/travel resorts in the Caribbean and Bahamas High pricing/costLack of certification Safety of children and younger divers Strengths Beachfront location3 8-20 passenger Boats New renovated cottages Family restaurant/bar within walking distance of resortCoral resort affiliations with PADI and NAUINavy SEAL instructor S2,O2 (Market Development)“Coral Cruise” which gives families discounted prices to cruise along the channel with their children and enjoy the many sites and wildlife. S5,O4 (Horizontal Diversification)Get instructors to get certified in various types of dives through “Dive School” to be able to offer them to tourist and frequent customersS5, T5 (Joint Venture)If divers visited the resort for more than 3 nights, give them a $50 coupon towards the PADI and NAUI organizations to become “Certified Divers”S6,T2 (Concentric Diversification)Have Navy SEAL to conduct instructional dives and lessons to prevent some scuba related accidents. Weaknesses Small staff of 11Many professional dive operations in the areaMinimal package deals Limited dive options at resortAll of resorts space wasn’t being usedSmaller resorts on the island W5,O3 (Concentric Diversification) Create day care/sitter space called to accommodate for more families with younger children “Scuba School”W3,O2 (Product Development) Add “Family blitz” package for 2 months with discounted prices for the resort/dives/dinning/sitter and cost per night for families of 4 or more W2,T3 (Liquidation) Sell their property and move to a less dive populated city in the Bahamas W6,T6 (Concentric Diversification)Build children’s structure called “The Junior Center” consisting of a play place, dining area, and a small pool. Recommended Strategy:I would recommend the Product development strategy which is to add a new pricing package specifically for families during 2 of the months in the low season (June through November). Families became a rapidly growing segment of the vacation travel industry. Many parents were busy and did not spend lots of time with their children as would like to. This is why increasing numbers are shown for parents traveling with their children. So when looking for resorts, parents would look for those who accommodate best for children and have special deals/packages for families. Greywell would best be able to turn his negative revenues to positive ones by adding more family accommodations and package deals for families to his well-known scuba diving resort. My recommended strategy suggest that he add a “Family 2 month Blitz” package/s which would have special rates, all-inclusive, accommodations, special activities, and water games/sports at a set price. This would increase his total bookings of capacity and mainly his bookings in the low season since this will be offered during the months in that season. He can also accept the help that the Rascal’s in Paradise offered so that he would have proper insight on all he needs to do to implement this strategy. Greywell’s main problem with his diving operation is that his resort doesn’t really have any product or service that sets them apart from other neighboring resorts and that he doesn’t really have products or services to accommodate for traveling families. People are getting referred to his resort but when they see that there are no family based accommodations they quickly turn to look for resorts that do offer those specials and discounts. Implementation:Finances:To emphasize more of a family diving vacation resort, some physical changes to the property’s structure will have to be made. There were four of the cottages that had already been renovated and the other two should be as well to make the cottage totally family oriented. This will cost anywhere from $15,000 to $25,000. Also more money is going to have to be put towards the advertisement of the new packages and discounts offered. To finance this renovation Jonathon will have to take out another bank loan amounting up to $40,000 to pay for construction and also this would cover wages for the newly added employees.Control:We will need to add customer surveys to gain feedback of the resort, how there stay was, and what can be changed/altered so that we always know how things are going with our operations and our offered services. Jonathon and his staff/departments would meet at the end of every month to discuss revenues and overall progress of the newly added services and packages to the resort. This will also allow him to do any re-hiring or firing if he sees a need to. This is something that needs to be added so that we will monitor several factors of our resort such as how we were with their children and were our facilities/accommodations safe. Some things could be minor and changed immediately while others may result in us having to change or alter our strategies regarding certain areas. Structure:Office Supervisor/manager (1)Coral divers Accountant (1) Jonathon Diving instructors(4)Housekeeper (1)Groundskeeper (1)Boat Captains (2)Babysitters(2)Activity supervisors (2)Leadership:Jonathon Greywell is going to be in charge of the whole operation as he is now. He is going to oversee a few more additions to the operation which would be the staff. Margaret, Greywell’s wife, will be put in charge of handling the babysitters and make sure they are properly trained and meet requirements upon hiring. Families will only feel safe if their children are in the hands of certified and fully capable staff members. Product: The product that is being added is called “The Family 2 Month Blitz”. This is going to be offered in the months of July and August, which are the months the operation is in their low season. Special rates, all-inclusive, accommodations, special activities, and water games/sports at a set price will be highly advertised and offered for 2 months to our rapidly increasing target market which are families. Promotion: Promotion aspects of the operation will have to be altered and more money will have to be spent from the budget to this market. Commercials via television, magazine advertising, and local flyers will be how we promote this product. We will team up with the family restaurant that’s located within walking distance. We will have specials available to those who purchase the newly added family packages. We will also advertise to local/neighboring businesses receiving sponsorship so that eventually look into joint venturing with one of them to also expand our operation. Promotion also will be added through the internet on the resorts website. Price:Special rates for families of 4 (2 adults 2 children aging from 2-12) will be added to our price guide. Also there will be discounted prices when customers stay more than 3 nights at our resort. Families will have a choice of choosing the all-inclusive package that includes a babysitter, children’s activities, meals for the stay, and an escort that will show them around the resort, the island, and all available sites. The other choice is the same package excluding features or services they do not wish to have throughout their stay at the resort. Place:We are going to sell our product at the Coral Divers resort. There will also be a website that the price guide will be available on. Customers will be able to purchase their selected package and days/nights that they are going to stay via the website. Research and Development:Rascals in Paradise had specialized in family diving vacations and gave Jonathon all the demographics that indicated how fast families were growing in the industry. Jonathon will be targeting divers ranging in age 35-39 traveling with their children. He will also have to do a lot more research on what families want and what type accommodations for them he will have to have in order to become more of a family oriented resort. Such as daycare/babysitting, technology available in cottages, and space available for other activities offered. Legal:Babysitter and new employees need to have proper screening, credentials and certifications due to the governing laws and regulations of working with children. Technology:More databases will need to be added to our computer systems due to the addition of new packages and services to the price guide. We will have to update our official website due to the newly added packages and discounts so that customers are brought up to speed with our changes via the web.Control Methods:InternalConsistency- We are going to ensure that our staff is fit and that they meet requirements specified for each job so that there are no problems with our staff not being able to handle their job. Upon a customer’s stay we will continuously ask how everything is going and if they are enjoying their time at our resort to ensure the quality of our services. Meetings will be held to discuss if there are any problems with our staff and if so we will make changes at that time. Also during our meeting that we will hold each month we’ll encourage all of our departments to have successful news and numbers. Competition won’t be really present because each of our departments wants the same growth for the resort and will encourage that on a daily basis. Feasibility- This strategy is very feasible with the renovation of the other rooms at the cottage, addition of a few staff members, and the help from the “Rascals in Paradise” family travel resort. We have the resources available to carry out this strategy to make this organization become more family oriented, attract more customers, and become a top resort known for its scuba diving and family resort accommodations. We are accepting the support from the rascals in paradise resort because they are one of the top family travel company and specialize in family accommodations. The staff will meet by-weekly and review surveys and feedback that the customers give to ensure that they are doing their job properly and make changes if needed. We will request the presence of a Rascal’s in paradise representative to look at statements and overall progress of the strategy to let us know if any changes need to be made and if it is feasible to still carry out this particular strategy. Every month we will still meet and make sure that this strategy can be carried out and progress can be made towards ensuring that this diving operation will come out on top and make increasing profits. External:Consonance- We are currently adopting to a rapidly growing market trend which is the growth of more vacationing families traveling to the Bahamas to enjoy diving attractions. There is much competition on this island but it’s very hard to compete if you don’t have any accommodations for this rapid growing market segment. To monitor the shifts in trends that the industry has, we will constantly look at numbers and any shifts of certain segments. This will be something we do by-monthly due to the industry and how it shifts. A shift of segments wouldn’t happen every week in this industry.Advantage:Superior Resources- This organization has specialized physical assets that competitors do not have. Our company has newly renovated rooms at the cottage in which customers will be more attracted to. We also have a former Navy SEAL available as one of our lead instructors so that he brings forth a good reputation to the resort, making customers feel as if they receiving proper teaching and lessons for the amount of money they spent on this particular service. With the help from Rascal’s in Paradise, we will be very knowledgeable of our target market and know what needs to be done or change to continue to make the strategy work. To ensure that we have the advantage in superior resources, we will constantly look at our competition in the industry to see what new structures they are building and products and/or services they are adding. This will allow us to make sure we still have the advantage as far as resources or tell us if we have to specialize in something else to have the advantage over our competitors. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download