Operations Management - Cruise Inc - Case Study Example

Operations Management - Cruise Inc. Table of Contents Table of Contents 1 Question 1: 2 Question 2: 3 Question 3: 4 Question 4: 5 6 Question 5: 6 Question 6: 7 References 8 Question 1: How would you measure productivity at NCL? Is productivity measurement important to NCL? Be very specific with your response. Try to determine the implications of any productivity measure that you propose. The insight of the Norwegian Cruise Line’s Pearl gives a great understanding of the massive $30 billion cruise industry. Almost every activities of the cruise generate business for the company in any way through the intensive demand of the customers to avail the royal offering from the cruise. NCL generates revenue from every section of the cruise in each and every tour from the company. Every section of the cruise is productive for the firm either through direct or indirect way of generating revenue. This productivity of the firm can be measured from the earning from each activities carried out on the cruise by analyzing the travel partner performances, analyzing cost of sale for the firm and also analyzing the trend of the ticket booking. Analyzing these sections of the firm gives a better understanding of the financial condition of the company. The EBITDA of NCL improved a lot from $6.6 million to $37.4 million in the fourth quarter and a huge increment of over the year from $228.1 million to $324.1 million in the year 2009 (NCL, 2011). Since EBITDA don’t include interest expenses, income taxes and amortization it can also be a good addition if the additional elements are calculated for more accurate productivity measurement. Question 2: Describe the service package offered by NCL to its customers. Visit the “Life Onboard” section of several cruise line websites and the insight provided by the film, “Cruise Inc” to gain a better understanding of service packages offered by cruise lines. The service packages offered by Norwegian Cruise Line ranges from high premium class to the economic class to attract all types of customer specially who have not experienced their journey on a cruise in their life. The ‘Free Style’ introduced in the year 2000 from the company attracts each and every people of the society to avail the service with huge collection of services and entertainment for the customers on the cruise. The resort vacation experience of the customer on the cruise is the major attraction for the customers. The cabin rates of NCL Pearl ranges from $35 to $2000 per day for each person on the cruise depicts the strategy from the company how they implemented the competitive advantage to grab the market from low to high market segment. The seven specialty restaurants provide foods for every need of the customers with variety of food habits and taste. The company provides over 100 plus activities and services like casino, spa, and art gallery, medical center, laundry and bar to entertain and meet the demand of each and every customer on the cruise (NCL-a, 2011). Question 3: What are NCL’s competitive priorities and why do you believe they follow these priorities? Describe what should be in the service package so that it aligns with the company’s emphasized competitive priorities. The unique services provided by the company to the customers with wide range of services packages are target towards every customer on the cruise. The quality services induce the customers to get familiar with their services and avail a lifetime experience for the entertainment provided by the company. This diversified service provided by the company for every need of the customers and for every customer on the cruise is the major advantage for NCL to attract wide customer base. The competitive price of the cruise and the best buy technique to offer customers guaranteed low price for travelling on the cruise provides a great advantage for the company to attract customers to avail their services (NCL-b, 2011). The club of the company with travel agents for excursion and recommendation of the company for several stores and places according to the taste and preferences of the customers helps to gain the trust from the customer for the customer centric approach of NCL. The online service from the company facilitates the process of ticket booking at a more convenient way. The company can also include IT support for the customers with internet and wireless connection which can be very attractive for the customers to carry their work along with them while on a vacation if needed. This service can be a very attractive addition in the service to attract many customers. Question 4: Describe why it is important to have guests assess the quality of their cruise experience. How would you respond to critics suggesting that guests do not always have the necessary expertise to correctly judge the quality of the service? Cruise experience can be varied from person to person. NCL allows and attracts customers from every segment of the society. Customers have individual level of expectation of services and products offered by the company. Since huge customer base are attracted to the service it’s very difficult to understand the quality of services from the experiences of the guests. It may be sometimes have very good experience for a certain guest for paying high and accessing the premium services from the company but it may not be the case with the economic services from the company. Thus guest experience is needed to be evaluated from each and every segment of the services provided by the company to judge the quality of services. Many customers travel for the first time on cruise thus it’s not possible for them to understand the industry standard service quality. Thus appointing judges from outside who have enough experience on the quality of services provided by other companies on the cruise and the efficiency of service according to the cost of services will be the best way to respond to the suggestions of the critics. Question 5: Capacity planning is obviously very important in this industry. Discuss your ideas on how you would think NCL conducts this important function and also the steps they would take to maximize capacity as well as the steps when capacity exceeds demand. Capacity planning is one of the most important activities for the firm to maximize profit from the business operations. NCL always looks after their allocation of travelers to make the most of the capacity for the cruise to generate maximum revenue without any loss of space. The company always tries to sail with full capacity with a minimum of 102% occupancy on every sail. The company has a strategy of calculating the capacity with 2 people on each cabin but always the company allows families and friends with 3 to 4 members in a single cabin which always occupies 100% of the cabin and travel with minimum of 102% on every travelling (Arizona, 2009). But though the maximization of capacity planning can increase the revenue of the firm to great extent but the company should have a regulation to control the exceeding demand of the capacity for the cruise otherwise it might trigger a safety issue due to uncontrolled weight. To control the exceeding capacity NCL may attach additional cabins to the ship for convenient and safe travelling of the customers. Question 6: Discuss some of the factors that affect the supply chain of NCL and some of the things they may do in order to address those factors. The supply chain of NCL is mainly required for the various items needed for the customers ranging from foods and beverages along with other amenities like laundry items and maintenance materials. Various factors which affect the easy flow of these goods and items are mainly due to difficulty in availability of the components or timings of delivery. For a convenient easy flow in the supply chain NCL should make those products only which can be quickly dispatched by them. Minimizing the throughput time for every operation can help the company to manage its time on operations. To utilize materials and save from wastage the company needs to accept materials from the suppliers in small batches. It will also help the company to keep in constant contact with the suppliers for better communication. References Arizona. (2009). Cruise Inc: Big Money on the High Seas Airs and Brings Insight into the Cruise Industry. September 5, 2011 < http://cruisetalk.org/2009/03/cruise-inc-big-money-on-the-high-seas-airs-and-brings-insight-into-the-cruise-industry.html > NCL. (2011). Press Releases. September 5, 2011 < http://www.ncl.com/nclweb/pressroom/pressRelease.html?storyCode=PR_022310_2 > NCL-a. (2011). FREESTYLE CRUISING®: Overview. September 5, 2011 < http://www2.ncl.com/freestyle-cruise/overview > NCL-b. (2011). BEST PRICE. GUARANTEED. September 5, 2011 < http://www.ncl.com/nclweb/cruiser/cmsPages.html?pageId=BestPriceGuarantee > Read More