Good Essay On Royal Caribbean Cruise LTD

Business

Royal Caribbean Cruise Ltd (RCL) is the world’s second largest cruise line with six subsidiaries that offer cruise vacation services at nearly 500 destinations worldwide. The total revenues of RCL were just under $8 billion during the financial year ended December 31, 2014. The company significantly underperformed during the 4th quarter of 2014 when its revenues and net earnings dropped well below analysts’ expectations. However, the overall performance of RCL remained strong due to massive promotional campaigns, loyalty programs, capacity expansion and financial saving through implementation of Double-Double strategy, which aims to double return on capital, investments and EPS (Cramer, 2015); (Yahoo Finance, 2015). RCL’s core competences are its financial strength and customer orientation that foster innovative culture and lead the cruise company to develop unique vacations deals and travel experiences for consumer attraction. In addition, the company also replaces old ships with new substitutes because of its proactive approach not only for capacity expansion but also for service distinctiveness. Examples include Anthem of the Seas and Mein Schiff that have been inducted in fleet during 2014 - 2015. The main strategic focus of the cruise company is cost reduction in a challenging external environment taking into account the currency fluctuations and fuel price changes. The strengthening of dollar is a major currency risk for bottom-line; however, the substantial decline in international oil prices is a positive external factor for cost minimization during 2015 (RCL Report, 2015). Nonetheless, the major strategic issue for RCL will emerge when oil price rebound (expected 2016) adversely affects cost structure. Thus, it is time for the company to focus on capacity expansions and greater customer engagement to ensure high load factor and business volume.

References

Cramer, B. Royal Caribbean Cruises Ltd (RCL) Falls On Poor Q4 Results. Bidness Etc, Jan. 29, 2015. Web http://www.bidnessetc.com/33632-royal-caribbean-cruises-ltd-rcl-falls-on-poor-q4-results/
RCL Report (2015). Royal Caribbean Reports 2014 results and provides 2015 guidance. RCL Investor, Jan. 29, 2015. Web. http://www.rclinvestor.com/phoenix.zhtml?c=103045&p=irol-newsArticle&id=2011691
Yahoo Finance. Royal Caribbean Cruise Ltd (RCL). Yahoo Finance, March 2015. Web http://finance.yahoo.com/q/is?s=RCL