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Royal Caribbean Cruises Ltd.

Royal Caribbean Cruises Ltd. Megan Dow, Kristin Belanger Angèle Bourgoin. Overview of WAL- Mart History Stocks Stock Information The Divisions BCG Their Mission and Vision Statement New Mission and Vision Statement External Opportunities and Threats CPM EFE

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Royal Caribbean Cruises Ltd.

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  1. Royal Caribbean Cruises Ltd. Megan Dow, Kristin Belanger Angèle Bourgoin Megan Dow, Kristin Belanger, Angèle Bourgoin

  2. Overview of WAL-Mart History Stocks Stock Information The Divisions BCG Their Mission and Vision Statement New Mission and Vision Statement External Opportunities and Threats CPM EFE Internal Strengths and Weaknesses IFE Analysis SWOT Matrix SPACE IE Matrix Grand Strategy Matrix Key Ratios Different Strategies QSPM Decisions EPS/EBIT Analysis Implementation Evaluation Update! References Questions? Overview of Royal Caribbean Megan Dow, Kristin Belanger, Angèle Bourgoin

  3. Overview • Operates 26 ships under two brands • Royal Caribbean International • Celebrity Cruises • Over 200 destinations • Caribbean • North America • South America • Europe Megan Dow, Kristin Belanger, Angèle Bourgoin

  4. History • 1968 • Three Norwegian shipping companies • Anders Wilhelmsen & Company • I.M. Skauge & Company • Gotaas Larsen • 1970 • First Royal Caribbean Ship sails • 1971 • Concept of air/sea vacations • Fly guests to Miami from all over N.A. • 1972 • Three ships offer 7 and 14 night cruise vacations from Miami to Caribbean • 1978 • Passenger boat was split and mid-section was added – from 700 passengers to 1,000 Megan Dow, Kristin Belanger, Angèle Bourgoin

  5. History Cont. • 1986 • Labadee, Royal Caribbean’s own exclusive destination, opens cost of Hispaniola • 1988 • Royal Caribbean and Admiral Cruises merge • A 73,192-ton ship for 2,350 guests sets sail as Royal Caribbean triples in size • 1991 • CruiseMatch 2000 – a fully automated cruise vacation reservations system with access to over 29,000 travel agents • 1993 • Royal Caribbean goes public under ticker symbol “RCL” • 1995 • 25th Anniversary • 1997 • Royal Caribbean Cruise Lines changes name to Royal Caribbean International • Celebrity Cruises merges with Royal Caribbean Cruises Ltd. Megan Dow, Kristin Belanger, Angèle Bourgoin

  6. Important Facts • It is the 51st consecutive quarter Royal Caribbean's Board of Directors has voted to declare a dividend to shareholders. April 28th they decided to give a dividend of 15 cents. • Royal Caribbean executive nets $6.6M in sale of shares. • A new ship is going to sale soon, Freedom of the seas. • Only 10% of vacationing public in the United States. Megan Dow, Kristin Belanger, Angèle Bourgoin

  7. RCL • Services: Sector • Industry: General Entertainment • Full Time Employees: 111,690 • Index Membership: NYSE Megan Dow, Kristin Belanger, Angèle Bourgoin

  8. RCL Megan Dow, Kristin Belanger, Angèle Bourgoin

  9. RCL vs. Industry Megan Dow, Kristin Belanger, Angèle Bourgoin

  10. RCL Competitors Megan Dow, Kristin Belanger, Angèle Bourgoin

  11. RCL Historical Megan Dow, Kristin Belanger, Angèle Bourgoin

  12. Organizational Structure Megan Dow, Kristin Belanger, Angèle Bourgoin

  13. Important Facts Megan Dow, Kristin Belanger, Angèle Bourgoin

  14. Their Mission Statement • Royal Caribbean Cruises LTD. Strives to: • Compete principally on the basis of quality of ships, quality of service, variety of itineraries, and price. • Improve our competitive position with respect to the quality and innovation of our on-board product and state-of-the-art cruise ships. • Serve markets and provide itineraries worldwide • Value its employees as the company’s most valuable asset. They are counted on to represent the company professionally and do the utmost to serve the company’s customers. • Value the environment and remain committed to protecting and preserving environmental resources and preventing pollution. • Maintain strong relationships with travel agencies, the principal industry distribution system. • Participate in and make grants to numerous community charity organizations with priority to those helping children and families and education and the environment. Megan Dow, Kristin Belanger, Angèle Bourgoin

  15. Their Vision Statement • Royal Caribbean Cruises LTD. will build on its reputation of an unwavering commitment to service and a desire to deliver the best cruise vacation possible. Our 27,300 employees are singularly focused on one goal: providing the highest level of service and the best vacation experience on land or sea. Megan Dow, Kristin Belanger, Angèle Bourgoin

  16. New Mission Statement • Royal Caribbean International is for everyone ranging from active adults to families who are vacation enthusiasts interested in exploring new destinations and seeking new experiences. We serve markets and provide itineraries worldwide, which we plan to expand more in, as well as capital expansion. Our new technological software will make our operations run better in keeping our unwavering commitment to service and a desire to deliver the best cruise vacation possible. Employees are of great significance to the companies well being. We value being environmentally safe and helping out the communities by donating to charities. Megan Dow, Kristin Belanger, Angèle Bourgoin

  17. New Vision Statement • To be the leading Cruise Line and leader in market share by providing the highest level of service and the best vacation experience both on land or sea. Megan Dow, Kristin Belanger, Angèle Bourgoin

  18. Domestic Baltimore, MD Boston, MA Charleston, SC Fort Lauderdale, FL Galveston, TX Honolulu, HA Jacksonville, FL Los Angeles, CA Miami, FL New Orleans, LA New York, NY Philadelphia, PA Port Canaveral, FL San Diego, CA San Francisco, CA Seward, AK Tampa, FL International Barcelona, Spain Buenos Aires, Argentina Dover, England Ensinada, Mexico Hamburg, Germany Harwich, England Oslo, Norway Rome, Italy San Juan, Puerto Rico S. Hampton, England Stockholm, Sweden Valparaiso, Chile Vancouver, B.C. Venice, Italy Fleet Deployment (2003) Megan Dow, Kristin Belanger, Angèle Bourgoin

  19. Issues • Global • Capital Expansion Issues • Passenger Safety Issues • Finance Issues • Marketing Issues • eCommerce Issues • Economic Issues • Suppliers’ Issues • Natural Environment Issues • Capacity Issues Megan Dow, Kristin Belanger, Angèle Bourgoin

  20. Global Issues • AAA increase in vacationers driving to destinations • Adding more and new itineraries departing in different locations • Expanded itineraries in Alaska and Europe • Offered land-tour programs • Motorcoach or rail with railcars in Alaska and Canadian Rockies Megan Dow, Kristin Belanger, Angèle Bourgoin

  21. Capital Expansion Issues • Driving revenue growth • Purchase new and larger ships • Expanding the ships average size • Expanding Celebrity Cruise Line Megan Dow, Kristin Belanger, Angèle Bourgoin

  22. Passenger Safety Issues • Safety, health, security risks • Accidents, illnesses, and other incidents • War, terrorist attacks, hostilities • Heightened security • 100% screening of luggage, carry-ons • 100% photo identification of passengers and crew • Passengers are prescreened • Certain areas on boat restricted Megan Dow, Kristin Belanger, Angèle Bourgoin

  23. Passenger Safety Issues cont. • Aboard Magic – 100 people aboard contracted Norwalk virus • Amsterdam • 450 passengers on four cruises suffered flu • Boat was sanitized by Center for Disease Control Megan Dow, Kristin Belanger, Angèle Bourgoin

  24. Finance Issues • Prices for cruise lines depends on luxuries • Destination, cruise length, cabin style, time of year • Revenue from each passenger per day in 2002 was $190 • Suffered a 9% decrease in net income • Due to weak U.S. economy & Middle East conflicts Megan Dow, Kristin Belanger, Angèle Bourgoin

  25. Marketing Issues • Contemporary segment • 7 days or shorter • Out of season vacationers • Premium Segment • 7 to 14 days • Celebrity Cruises • Families eager to explore new destinations/experiences • Spent $97.9 million on advertisement in 2002 Megan Dow, Kristin Belanger, Angèle Bourgoin

  26. eCommerce Issues • Online booking • Virtual tour capabilities • Electronic documents for passengers • Online access to shore excursion • CruiseManager • Software packages • Pricing, inventory, marketing actions • First company in industry to develop automated booking system Megan Dow, Kristin Belanger, Angèle Bourgoin

  27. Economic Issues • U.S. economy recession in 2001 • U.S. inflation rates in 2003 – low • Unemployment steady at 6% • Hurts cruise industry • Lower operating margins and profits • Fuel costs • Rising about 60% • Better euro-dollar exchange Megan Dow, Kristin Belanger, Angèle Bourgoin

  28. Suppliers’ Issues • Suppliers include • Travel agency commissions • Food and related items • Port facility utilization • Airfare • advertising, • Fuel • Hotel supplies • Products related to guest accommodations • Shipyards • Sometimes make poor quality, delay in ships, mechanical problems Megan Dow, Kristin Belanger, Angèle Bourgoin

  29. Natural Environment Issues • Environmental groups • Stringent regulations on ships • Environmental and health and safety regulations • Could increase costs of compliance • Instituted Safety and Environment position • EPA – studies on waste water • Annual award program • Financially supporting ocean conservation groups Megan Dow, Kristin Belanger, Angèle Bourgoin

  30. Capacity Issues • Increased 9% over 2002 • Top 10 cruises carried over 2 million passengers on 932 North American cruises Megan Dow, Kristin Belanger, Angèle Bourgoin

  31. External Factors Megan Dow, Kristin Belanger, Angèle Bourgoin

  32. Opportunities • Expansion of fleet has allowed RCCL increasing amount of destinations, itineraries, and markets • Flexible strategy, moving their fleets throughout the year to meet the seasonal demand • RCCL operates the websites with customer booking capabilities for both Royal Caribbean and Celebrity Cruises • Offers competitive price on goods and services offered from suppliers in packaged deals. • Demand for cruises has increased and is predicted to continue to increase Megan Dow, Kristin Belanger, Angèle Bourgoin

  33. Threats • Terrorism • Viral outbreaks • Decreased tourism since 9/11 • Challenging U.S. economy • Environmental lobbyists • Illnesses aboard cruise ships • Reports of physical attacks while on board • Carnival Corporation Megan Dow, Kristin Belanger, Angèle Bourgoin

  34. EFE Megan Dow, Kristin Belanger, Angèle Bourgoin

  35. CPM Megan Dow, Kristin Belanger, Angèle Bourgoin

  36. Internal Factors Megan Dow, Kristin Belanger, Angèle Bourgoin

  37. Strengths • Increase net revenue yields • Revenues growing • Capital expansion of Celebrity Cruise Line • Expanding passenger capacity deal sign Finland’s Kvaerner-Masa Yards to build bigger Ultra Voyager ships with capacity of 3,600 • Using latest information technology software to manage operations Megan Dow, Kristin Belanger, Angèle Bourgoin

  38. Weaknesses • During 2002 & 2003 RCCL experienced weaker margins due to pricing pressure caused by a weak U.S. economy, traveler safety concerns, and increasing capacity • Net income falling • Higher marketing costs due to reduced demand because of weak economy and ongoing conflict in the Middle East • RCCL financed recent shop acquisitions by issuing debt • Highly leveraged with LT debt-to-equity ratio of 1.31 Megan Dow, Kristin Belanger, Angèle Bourgoin

  39. IFE Megan Dow, Kristin Belanger, Angèle Bourgoin

  40. SWOT Matrix Megan Dow, Kristin Belanger, Angèle Bourgoin

  41. Space Matrix Megan Dow, Kristin Belanger, Angèle Bourgoin

  42. IE Matrix Megan Dow, Kristin Belanger, Angèle Bourgoin

  43. Grand Strategy Matrix Megan Dow, Kristin Belanger, Angèle Bourgoin

  44. Matrix Analysis and SWOT Summary Megan Dow, Kristin Belanger, Angèle Bourgoin

  45. Key Ratios Megan Dow, Kristin Belanger, Angèle Bourgoin

  46. Key Ratios con. Megan Dow, Kristin Belanger, Angèle Bourgoin

  47. Key Ratios con. Megan Dow, Kristin Belanger, Angèle Bourgoin

  48. Different Strategies • Expanding fleet by two boats with larger capacity for passengers • Capital expansion to increase the amount of revenue to surpass the larger competitor Carnival Cruiseline Megan Dow, Kristin Belanger, Angèle Bourgoin

  49. QSPM Megan Dow, Kristin Belanger, Angèle Bourgoin

  50. QSPM cont. Megan Dow, Kristin Belanger, Angèle Bourgoin

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