Strategy Case Analysis

A.Role and Requirement?

CASE
DIAGNOSTIC
B. Key Stakeholders?
Just like any other case

SQ + SPs: REALLY bad fit (if

Compare feasible options

1. Identify trigger [why need strategy decision]?

2. Generate
possibilities
*Resorts
w/ strong identities
and reputations for quality service were doing well
a. Identify Status Quo (SQ) Strategy, using
*Develop a more distinguished identity in the scuba diving
CASE FACTS
Role: Jonathan Greywell owner of Coral Divers Resort (a small private allb. Identify
1 or more Strategic Possibilities
around scuba
diving resort)
(SPs) in the CASE
Requirement: Develop new strategic/specialized offering to differentiate
Analyze fit of SQ and SPs, using CASE FACTS
from3.
competition
(CF),
with: barrier conditions? TOO unlikely
SQ
+ SPs:
Key Stakeholders: Jonathan Greywell; Rascals in Paradise (travel company
Coral Divers Resort

specializing in family diving vacations), staff, bank (holds mortgage)

SQ SP1 SP2

Trigger:

a. External Environment

Declining revenues over last 3 years

Porters
5 forces
o Bookings
flat first half
of the year
Growing families
market segment
PEST

b. Internal Environment
Gap analysis
1. Status Quo focus on improving current operations
Objective
Financial analysis
Grow revenues by 15% YoY & gross bookings over the next 3
4. Summarize
SQ SP1 SP2
years fit with SWOT
a profitable enough business to help his family
5. Make a Maintain
choice
Value Prop
6. Communicate
Small, more conclusion:
personalized divingrecommendation,
experience
Safewhat.
environment with beachfront location
why & so

Possibilities:

Knowledgeable and skilled employees

Target Customer
Recreational divers, vacation groups
Want more personalized diving experience
Bahamas travellers
Average age 18 49. 36 is the average age.
Internal Advantage
Diverse team (multiple nationalities) of diving instructors with
multiple certifications
Convenient location to dive sites
Knowledgeable staff
New providence quieter
Established customer base
Strategy Statement:

To grow revenues by 15% YoY for the next 3 years

By offering a safe, personalized diving experience
To recreational divers and vacation groups
Through a diverse team of diving instructors and a convenient
resort location for dive sites
To maintain a profitable lifestyle sustaining business by offering safe and knowledge
scuba diving experiences and a beachfront resort, to single and family scuba divers
vacationing in the Bahamas, through their prime South Providence beachfront
location with 6 double rooms and 6 individual cottages, their fleet of 3 boats and
associated diving equipment, and their certified and skilled diving staff.

Strategic Possibilities
1.
2.
3.
4.

Status Quo Strategy Costs Status quo is not feasible. When the trigger is so extreme, that we are
losing money, the status quo is not feasible
Partner w/ Rascals to specialize in family diving vacation
Revamp business model to focus on adventure diving
Leave New Providence and relocate business to another location Not possible
because it gets rid of one of their main advantages

He has potential for advantage. Lots of internal advantage but not

included in value propr
EXTERNAL ANALYSIS:
Porters 5 Forces:
Scope Vacation groups in the Bahamas & Caribbeans
Threat of New Entrants (M-H)

Low capital requirements (equipment and boats)

Easy for resorts to hire certified divers (increasing certifications 10% each
year 22M globally in 2007) and expand scope for scuba diving programs
Dive sites are public domains no restrictions on who can use

Substitutes (L)

A lot other potential activities (beaches, snorkelling, sightseeing, other

resort entertainment, etc) must fight to attract guests

Power of Buyers (H)

Large selection of alternatives

No switching costs

Competitive Rivalry (M)

Many large competitors; many small competitors all offering a diverse

selection of activities to vacation goers
Industry is growing fragmented, no large dominant competitor

So What?

1.
2.

3.
4.

Forces very unfavourable high threat of entrants, many substitutes,

low bargaining power w/ buyers, large number of competitors
Coral Divers needs to differentiate and come up with stronger and
more clear value proposition to counter the forces of competitive
rivalry and low customer switchin costs
Hes a little bit at risk
SQ low differentiation, offers as much as a new entrant - poor option
SP1
a. Allows for focused target group, can cater offerings (less
substitutes)
b. Resort operations more complex (more human capital,
equipment, processes)
SP2 offering a little more diverse (but many groups already do it)
SP3 will still face the same forces

PEST Analysis:

Macro
Force

Political

Future Trend
(e.g. increase or Impact on demand,
decrease)
competition, +/or supply

Implications for the

Business
(Opportunities +
Risks)

-Shark feeding
-Lower demand for scuba/shark -Consumers may be
banned in 2001 by feeding activities
dissuaded from
Florida Fish &
participating in scubaWildlife
diving activities
Conservation
(waivers)
Commission, but
still legal in
Carribean
-Scuba-related
accidents
excluded from
most life/travel
insurance

Economi
c

Social

Growing middle
class in emerging
markets (BRICs,
etc)

-Growth in demand for tourism -Opportunities to

activities
attract & retain new
customer base

Strong and
healthy
demographic
Growing family
segment of
vacation travel
industry

-Growth in demand for familyfriendly vacation packages

-Opportunities to
attract & retain new
customer base

Tech

So What?

Not many relevant factors growing demand in vacation industry

overall due to growing middle class

 Positive trends for core business and both SPs

1. SQ N/A
2. SP1 capitalize on growing family segment more demand
a. Families prefer pre-paid packages
3. SP2 controversy over shark feeding may place long-term pressures
on the success of the business models
4. SP3 N/A

INTERNAL ANALYSIS:
Resource Gap Analysis:
See chart
Well positioned with core physical and huanm resources
Status Quo

Customer
Value
Proposition
Diverse
team
(multiple
nationalities)
of diving
instructors
with multiple
certifications

Required
Resources

Available
Resources

Experienced
diving
instructors to
guide
customers

-Diverse
team of
certified
divers

Solid variety
of diving
locations

-Convenient
location close
to variety of
diving sites

Convenient
location to
dive sites

Actions to
Close Gap [if
any]

Is it
feasible to
close gap
(Y/N)?

Actions to
Close Gap [if
any]

Is it
feasible
to close
gap (Y/N)?

SP1 (Partner)

Customer
Value
Proposition

Required
Resources
Experienced
diving
instructors to

Available
Resources
-Diverse
team of
certified

guide
families

divers

Solid variety
of diving
locations

-Convenient
location close
to variety of
diving sites

Strong family
accommodati
on programs
(babysitting,
children
menus)

-Few units
upgraded
-No family
accommodati
on
-External
restaurants/b
ars in walking
distance

-Invest in
more familyfriendly
accommodati
on
-Upgrade
units (larger)
-Train/hire
new sitters/
internal chefs

SP2 (Shark Diving)

Customer
Value
Proposition

SP3 (Relocate)

Required
Resources

Available
Resources

Actions to
Close Gap [if
any]

Is it
feasible
to close
gap (Y/N)?

Experienced
diving
instructors/sh
ark feeders

-Diverse
team of
certified
divers no
experienced
shark dive
master

-Hire dive
master
comfortable
w/ shark
feeding

Convenient
shark diving
locations

-1 hour away
from shark
drop-off
locations

-Relocate
closer to the
dive sites

Debatable

Shark diving
equipment
(chain mail
diving suit,
feeding
equipment)

Basic diving
equipment

-Invest in
shark diving
equipment

Customer
Value
Proposition

Required
Resources

Available
Resources

Experienced
diving
instructors to
guide
customers

Actions to
Close Gap [if
any]

Is it
feasible
to close
gap (Y/N)?

-May need to
hire new
divers if
current
unwilling to
relocate

Solid variety
of diving
locations

Resource Type
Physical

Human Resources

Financials

Current
Resources
Beachfron
6 villas / 6 rooms
3 diving boats and
gear

Gaps for SP!

Adventure Dives
Additional
equipment
(chainmail diving
suit, protective
spear guns)

Knowledgeable and
skill diving
instructors
Resort and admin
staff
Few financial
resources
Little free cash
High existing
mortgage
Minimal resources
required to
improve efficiency

Driving instructors
willing to take on
higher risk role

10 20k in new
equipment

Gaps for SP2

Family Resort
Renovate 2
remaining villas
and maybe the
rooms at 15 25k
Kitchen and dining
facilities
Rascal rooms and
outdoor play areas
Baby sitters / child
activity
leaders
Chef and wait staff
30k to 50k in
immediate room
rennos, plus
another 90k over
time, plus kitchen
and dining facilities
andp lay ares
100 200k total?
Will require more
financing

Intangible

Good Reputation
High demand
location

Will need to build

brand perception

Will need to build

brand / perception
Will need a
partnership with
Rascals
So what? expansion to family all inclusive report will require financing
No reason you acant combine sp1 or sp2 with the efficiency improvements
Criteria

Costs
Time to implement
Graph
ROI

SWOT Analysis:
Status Quo

STRENGTHS
-Convenient diving location
-Professional, qualified staf

OPPORTUNITIES

WEAKNESSES
-Lack of diferentiation in relation to
competition

THREATS
-Growing family trend business
model not geared towards family
-More entrants into the sector

SP1 (Partner)

STRENGTHS
-Convenient diving location
-Professional, qualified staf

OPPORTUNITIES
-Growing family segment
-Opportunity to leverage expertise
from partner

WEAKNESSES
-No infrastructure in place

THREATS
-Isolating the diving hobbyists
-More entrants into the sector

SP2 (Shark Diving)

STRENGTHS
-Convenient diving location
-Professional, qualified staf
-Diferentiated, focused ofering

OPPORTUNITIES

WEAKNESSES
-Shark dive spot distant from base
-No previous shark diving
experience

THREATS
-Possibility of political regulations

SP3 (Relocate)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Decision Matrix: