Strengths, Weaknesses and Opportunities of Carry-On-Cruising - Case Study Example

Strategic Marketing Situation This report is going to analyse the business environment under which a company known as Carry-On-Cruising which is a leisure river cruise company operates under and how to improve its operations and ensure sustainability through use of marketing plan. As an advisor to the marketing director we are going to analyse Carry On Cruising Ltd.’s business and come up with a marketing plan that will ensure the company achieves its short term and long term goals within the next 1 year for short term goals and within 3 to 4 years for the long term goals. In the process of analysing the situation of an organization we usually consider the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis in order to come with a plan meant to achieve the company’s goals. The SWOT analysis for Carry On Cruising Ltd is outlined below: Strengths Carry on Cruising Ltd has well qualified and large workforce who offer services to its clients and this workforce is an asset to Carry-On-Cruising Ltd. Carry-On-Cruising Ltd has been operating on the river Thames offering niche services such as offering meals on boats and transporting to landmarks within London. Licenses given to Carry-On-Cruising Ltd for a period of 5 years, for 32 weeks for each year. These licenses enable the company to plan ahead without being interrupted therefore the company has an advantage with licensing issues. The financial status of the company is also strong after the contracts it acquired in 1998 with Millennium Dome. Recently in the year 2010, the company acquired an outstanding clientele of about 1.5 million passengers where it managed to serve 1000 meals and earned over £ 1.5 M with a significant turnover of about £13 M. The other major strength that the company has with respect to its competitors is the fact that given that London is viewed as a major tourist destination, Carry-On-Cruising Ltd is very strategic and of good reputations. Weaknesses Weaknesses can be summed up as internal factors that could hamper the growth of Carry-On-Cruising Ltd from achieving its market leadership position in the market. Weaknesses that Carry-On-Cruising Ltd exhibit include the high cost of maintaining boats as these machines consume fuel and costs of maintenance. Carry-On-Cruising Ltd could also face licensing issues so that in case once the boat licenses expire the company might face hitches in case the licenses are not renewed. Carry-On-Cruising Ltd has secured some loans to finance some of its projects; the high cost of paying back these loans could be a weakness to the company. Opportunities Opportunities are factors external to the company that could favour the company in extending its market share. In the leisure boat industry, Carry-On-Cruising Ltd has been offering niche services to its clients. Some of these services include offering food and drinks to its clients through its stationery boats anchored along the River Thames. Carry-On-Cruising Ltd services have enabled the company to grow tremendously over the years and in 1998 the company won a contract to transport passengers to the famous site of the Dome in London. The company has an opportunity to win another contract in transporting people to the O2 arena once negotiations are complete. The other potential opportunity for the company is the forthcoming 2012 Olympics Games which will experience a surge of visitors interested in experiencing London over a short period of time (Ranchhod 2004). Threats Operating boats in the leisure industry is a costly affair and Carry-On-Cruising Ltd could face the threat of high running costs such as high fuel prices. Another threat that the company faces include high competition from other boat operators along the River Thames, this competition could erode earnings to the company and thus significantly reduce its market niche. The lack of market focus can eventually reduce its market share. Carry-On-Cruising Ltd rely on factors such as good weather and earning power of consumers, therefore in case of bad weather or economic crises among its consumers the company could suffer a lot. Tourist numbers to destinations such as London also affect Carry-On-Cruising Ltd’s operations since they rely on visitors to use its boats in touring the River Thames. SWOT forecast The strengths of the company are more pronounced and hence the need to foster the strategic plan in order to take advantage of the company’s financial status. The forecast for the two years set to achieve the objectives of the company are as follows. The strength of the company will grow given the opportunities such as the London Olympic Games which is to take place in London. This opportunity will enhance the financial and customer base of the company if optimized well. Upon the implementation of the strategic plan the maximization of the proposed market mix will help in mitigating the potentials of the competitors and hence reducing the level of competition which will then yield more income for the company. The implementation of the online marketing strategy will be of essence in maximising the opportunities through making the companies functions known to the outside world which will be imperative to the company in 2012 Olympics Games in London and thereafter (Richards 2006). Cutting down operations that require fuel and through the use of minima ships and boats will help in cutting down expenses. PESTLE Political The political climate of the UK is sound and thus conducive for both local and international business. Carry-On-Cruising Ltd can thus benefit from the predictable climate condition of the country. Economic The United Kingdom has a strong economical base with about GDP $2.71 trillion and about 7th in purchasing power parity. This is a strong indicator that the consumers in the UK are willing to spend on leisure services such as boat services offered by Carry-On-Cruising Ltd Socio-cultural The United Kingdom experiences less disruption as a result of social or cultural influences. London is a mixed city with people from different ethnic groups and races. Despite the fewer cases of racism, the socio-cultural climate still remains favourable especially Technological The United Kingdom is among the most developed countries technologically and as compared to other countries in the world. Technological communication in the United Kingdom is thus efficient and reliable. Legal requirements The major legal restrictions that were facing boat services in the early 1990’s was the provision of boat licensing for 32 weeks in a year. The current provision has been increased to 32 weeks of the year for the next 5 years to 2016. Environmental issues The business environment in the UK is favourable for business prosperity with European Union on its doors coupled with an ever increasing GDP and hence increased consumer spending, the UK is a gateway to Europe and hence a perfect business environment to both local and foreign investors. Porter’s forces Threats of new entrants There are is a possible exploitation of the market gap which is present as a result of unutilised market opportunities in London. Threats of substitute products or services There are other companies offering the same services as Carry-On-Cruising Ltd such as Bankside Pier commuter boat and hence a good substitute for its services. Bargaining power of the customer The modern day customers have a stronger bargaining power because of the availability of different options. Thames clippers for instance offer peak hour boat services and hence a direct competitor to Carry-On-Cruising Ltd which results in increased customer bargaining power. Bargaining power of suppliers This is evident by the ability of the suppliers to increase the cost of fuel and hence increasing the cost of doing business. Suppliers of new boats and supporting equipments can also influence the cost of doing business to the company and hence a major consideration. Rivarly among competitors in the market There are several competitors of Carry-On-Cruising Ltd like the Thames Clippers of Bankside Pier commuter boat services, Thames River boat services and River boat services among others. These companies offer direct competitors to Carry-On-Cruising Ltd and each other. All these companies are sensitive to their customers and have increased several options of ensuring customer satisfaction and hence loyalty. An off-peak time option from Thames River boat is an example of how services offered by the company have increased their strategic position of the company. Carry-On-Cruising should thus foster ways of increasing its market sustainability given the endless efforts offered by these competitors. Objectives There are two major objectives of the company that ought to be achieved, the first objective is the short term goals of generating more income while the second and the most important aspect is ensuring sustainability in the market considering that the company is a market leader in the Boat service industry. The |BCG model, marketing mix (7P’s) the Anshoff’s market matrix model provides a clear picture of the ways in which the company can achieve its short and long-term objectives. Strategy Target markets Carry-On-Cruising Ltd should ensure optimization of its resource through the increase of its services in order to improve its strategic position in light of the 2012 London Olympic Games as well as sustaining its market niche over the next 3 to four years. BCG model Cash Cow Cash Cow in Carry-On-Cruising represents the successful boat and hotel services that constantly generate income to the business. It is thus useful to use these income generating services of the business to fund and increase other services such as deep sea diving that are potential for attaining the short term goals in light of the 2012 Olympics games and also lay a sound foundation for the company’s long term goals of becoming a sustainable market leader because of the strong financial position of the company that can initiate creativity. Star Some services that are still considered star and have the ability of achieving a Cow cash status in the company includes; offering night meals in the boats a night. This business sector can achieve maximum of 1400 people seeking the services per night as well as transporting 4 million passengers per year. Question Mark (problem child) The new services like the VIP and the deep sea diving can be considered problem child because of the developed market yet the services have not obtained a substantial market share to became a star. These services on the Carry-On-Cruising need to be promoted in order to achieve the star status or even the Cow Cash status as one of the major objective of the company in short term as well as long term(Kaynak 2002). Dog Additional services offered by the boats bought after the trip to Millennium Dome are considered dog because of their relative less market and thus important for the company to hire them off to other companies in return of some commission. This strategy is important for both short-term and long term goals of the company. Anshoff’s market matrix model Market penetration In the short term perspective, the Olympic games of 2012 that are coming up will result in increased market opportunities and hence the need for increased strategic planning that will optimize on the market opportunity provided by the Olympic Games. The Long term objective of the company is to ensure that it maintains its market niche and work on ways of reducing cost. Market development Addition of services such as deep sea diving and VIP service provision are in-line with core competencies of the company. This is thus an important market segment for Carry-On-Cruising to consider. Product development The existing customers form a fundamental basis of increasing service provision such as VIP service sand deep sea diving. This is a less risky option for the business since its existing clientele can use the services. This is therefore imperative for the long-term aims of the company. Diversification The company should not diversify to other market segment that does not meet the core competencies of the company since it will be a risky venture which may reduce the company’s market niche. Maximising the existing market segment is thus an important consideration before the company can opt to diversify. Market Mix Product Carry-On-Cruising Ltd needs to introduce new services to enrich its market niche and also ensure that it maximizes its fleets of boats that it obtained after securing the Millennium Dome contract in 1998. Some of the available options that Carry-On-Cruising Ltd should consider the introduction of deep river diving activities and VP boat travel, meals and cater for executives that visit the company. This is especially in light of the forthcoming 2012 London Olympic Games. Price There are several considerations that Carry-On-Cruising Ltd should make with regard to its pricing strategies. The first consideration is to ensure that it prices its services with respect to its competitors and also maintaining a margin that easily allows it to earn considerable profits. In order to decrease the cost of operation, the company should reduce its debts from $ 3.1 million to less than $1.5 million in less than a year. Placement Considering that Carry-On-Cruising Ltd deals with boat transport and other services, it should thus form its placement strategies by forming partners outside the United Kingdom. This will enhance its channel of service distribution while at the same time ensuring sustainability of its position as a market leader. Promotion Some of the promotional strategies at the disposal of the company mainly include online marketing. The rationale for opting to initialize online marketing is mainly because of its significance in terms of geographical coverage and cost incurred. The online marketing options that Carry-On-Cruising Ltd can opt to utilise includes, redesigning the company’s website and ensuring that the website is ranked highly in the famous search engines (Kaynak 2002). This can be achieved by using pay per click where the keywords representing the company’s products and service can be easily accessed. The other available is the use of newsletters and video advertising; this is one of the most effective ways of reaching a wider audience online in a cheaper way as compared to the use of radio of TV advert. The visitor can revisit and easily learn about Carry-On-Cruising Ltd as compared to the short commercials offered by TVs and radios. The other potential marketing opportunity for Carry-On-Cruising Ltd is through social media network like Facebook, twitter and Linked. Fostering a strong customer relationship through effective communication skills will promote customer loyalty and repeat customers. Processes In the modern business, it is mandatory to ensure sound processes of handling customers’ inquiries and complains handling and establishing customer requirements and needs and how to effectively handle an order from the customer. Carry-On-Cruising Ltd should thus ensure that this process is improved and made effective in order to ensure sustainability of the business in the modern environment. Provision of customer service This is a critical aspect that should be considered by Carry-On-Cruising Ltd because in the modern world, the clientele can make or break a business. Ensuring that the customers are served well is an essential consideration to Carry-On-Cruising Ltd in order to ensure sustainability as a market leader in its niche. Physical layout In order to ensure market sustainability, Carry-On-Cruising Ltd should find ways of increasing the presentation aspect of its hotels, ships, boats and other customer facilities because of the higher expectation of the customers. As an example, Bankside Pier commuter boats have always worked on how to present their services and facilities to the customer and hence a mandatory requirement of Carry-On-Cruising Ltd if it is to be sustainable in its market niche. Quality is the key issue and of great importance for market sustainability in the current world. Action For the period of 1 year, 3 quarters, the company needs to increase options of decreasing expenses in order to decrease its debts level to lower than $2.0 million before the end of the year. The company can accomplish this by increasing online marketing because it is the cheapest way of marketing yet the most effective because of its far reaching effect. Carry-On-Cruising Ltd can then concentrate on its debt payment and increasing of market opportunities. The company should enhance customer experience through addition of services to optimize its boats and ships. One of the potential activities is deep water diving for swimming enthusiasts, formation of boats and ships for executive customers who need more privacy, service delivery and so forth. This will mainly anticipate the forthcoming 2012 London Olympics Games. Increasing international partners will also be a way of increasing customer base as well as reducing marketing across the borders (Wilson 2005). This will also be a potential customer boost before 2012 London Olympics Games. It is also an important consideration to look at what the competitors are doing to increase their market share, Thames river boats for example have established off-peak hours for their trips as a way of attracting customers as well as maintaining their loyalty. Budgets Details 1st year 3 quarters 2st year 3 quarters Personnel Salaries Commissions and bonuses Employees £ 1,000 per employee £ 200 per employee Employees £ 1,000 per employee £ 200 per employee Market research Primary research Secondary research £ 2,000 £ 500 £ 1,300 £ 300 Marketing communication Branding Websites Direct marketing Internet marketing TV and Radio Events £ 3,000 £ 3,000 £ 1,500 £ 2,000 £ 1,900 £2,300 £ 2,000 £ 1,200 £ 1,200 £ 1,900 £ 1,800 £ 2,200 Others Postage Telephone Computers and office equipments £ 8,000 £1,000 £ 1,500 £ 7,000 £800 £ 1,300 Total spending £ 27,900 £22,200 Control A comprehensive market control approach should be adopted by Carry-On-Cruising Ltd, the fundamental guidelines for this process includes; what does the Carry-On-Cruising Ltd wants to achieve through its strategy and objective, what is the current situation of the company and what should the company do about the situation (Groucutt 2004). The company wants to achieve a sustainable growth in terms of market share and also take advantage of its new boats and its formidable market niche. The current situation of Carry-On-Cruising Ltd is that its debts is about $ 3.1, it has substantial market and potential opportunities to expand despite the challenging lack of market focus and increasing cost of operations and competitors. The company should thus adopt new online marketing strategies such as emails; social networking and video clips to reduce the marketing expense and also reach a vast market niche (Richards 2006). In preparation for the 2012 London Olympics Games and the new contract from O2 ‘Arena’ this will be a fundamental base. The company will thus focus on service deliver, customer loyalty and acquisition of new niches while optimizing on the existing assets to create more product differentiation. Within the 12 quarters set, the company will have minimizes its debts to less than $1.5 while increasing its income through a comprehensive product differentiation through staff innovations which will subsequently enhance customer loyalty as well as keeping competitors at bay. References Groucutt, J, Leadley, P & Forsyth, P 2004, Marketing: essential principles, new realities, Kogan Page Publishers, Atlanta, GA. Kaynak, E 2002, The Global business: four key marketing strategies, Routledge, London. Ranchhod, A, Gauzente, C & Tinson, J 2004, Marketing strategies: a twenty-first century approach, FT/Prentice Hall, Boston, MA. Richards, V 2006, ‘Online marketing success stories: insider secrets from the experts who are making millions on the internet today’, Journal of Business and Marketing, vol. 12, no. 3, pp. 12-18. Wilson, R & Gilligan, C 2005, ‘Strategic marketing management: planning, implementation and control’, International Journal of Business, vol. 9, no. 2, pp. 27-31. Read More