Royal Caribbean Cruise Line
Introduction
Cruise lines are responsible for offering both relaxation and a sense of adventure for all those who venture into the leisure activity. Various companies come to mind if any one person chooses to go for a cruise and they boast of stellar reputations synonymous with excellence and diversity. These companies are inclusive of P&O Australia, Princess Cruises, Carnival Cruise Line Australia, Norwegian Cruise Line and our focus, the Royal Caribbean International, which possesses one of the most innovative and unique components within its cruise line inclusive of the now renowned observation capsule.
Royal Caribbean is a global company that is situated in Miami, Florida. It comes in second as the largest cruise company that is currently in operation in terms of revenue. Carnival co-operation holds the first position when the matter of passenger counts come into play. RCCL is a company that was founded in Norway in the year 1968 and is operated as a separately owned subsidiary of the Royal Caribbean Cruises Ltd starting from the year 1977. Every forward-thinking company requires to have a vision for the future so that they are aware of where they are headed to as a company. For our chosen establishment, their vision propagates “looking beyond the now, sensing and feeling and intuiting what could be.” Both as interested parties and as the company as well, we are compelled to pose the question, ‘What If?”
Company Overview
As witnessed on most cruise ships, Royal Caribbean offers guests the chance to visit various unique and top of the line destinations across the country. They offer a myriad of onboard entertainment for the entire duration of your trip such as live theatre shows, access to casinos, live musical performances, self-actualization activities such as yoga and spin classes, comedy shows and so much more that ensure that the client is forever imbued with activities to ward off boredom. There is something for everyone. The Royal Caribbean currently owns a fleet of twenty-six ships and have the development of an additional three underway. Every single ship is unique in its way and offers a specific experience once on it in terms of cuisine and entertainment.
The destinations covered by the ships are also notably different since they all don’t end up at similar ports. This, in turn, provides an essential aspect of diversification that ensures that the products are ever-changing and ever-growing. The ships allow for activities that favour all ages such as toddlers, teens, middle-aged individuals and even those advanced in their ages. They also have provisions that would enable adequate movement for those who are disabled such as ramps instead of stairs. There are arcades, swimming and water slides and even arcade games. They have, therefore fine-tuned their product so that no one who wishes to patronize the said product is left out.
The forces that the company faces are political, social, economical and environmental. They are required to remain within the law even as they carry out their constant operations. The most important must have been their dealings with their environmental responsibilities. Currently, they are the most environmentally conscious company, but this was not the case before. In the early 1990s, the cruise line was responsible for various amounts of oil-based and photochemical waste dropped into the Port of Miami and the Caribbean, among others (Jones, 2017). Still, after a rigorous confrontation with the U.S governmental Law, they were able to streamline their operations better to achieve a better-placed company environmentally. Other forces would be the constant increase in ship size and capacity which is continually evolving and as such the members within the cruise ship industry are required to keep with the times and effect the changes as they should so that they are assured of a constant flow of revenue.
The various cruise ship ports located in the Caribbean are susceptible to natural phenomena such as hurricanes and storms experienced majorly within the tropics (Rossi, 2018). They are required to withdraw their services whenever a warning is issued with regard to extreme weather conditions and can only resume business once the threat is appropriately contained. That entire time that they are out of business the cruise ships incur substantial losses, and the Royal Caribbean is one of them. And this is a force that is constantly affecting the level of business that the company is capable of. Currently with the uncertainty being felt all over the world and the effects felt by the tourism industry because of the Corona Virus the company has been left quite vulnerable and even when the pandemic is completely eradicated it shall require a long-winded recovery process whose duration cannot precisely be foreseen.
Organization’s Hierarchal Structure and Stakeholder Systems
Royal Caribbean as at now boasts of a 67% stake within the Silversea Cruises. It should be noted that as at the month of November in the year 2006, they acquired a total of 49% within the Pullmantur cruises garnering a minority share within the establishment (Jones, 2017). This was closely followed by them going after the 50% stake within the TUI cruises. They were growing and building and effectively expanding into different areas where they initially weren’t involved. Their development spilt over to early 2019, where they embarked on a combined venture with the ITM group resulting in the coining of Holistica (Papathanassis, 2017). This company has the foresight to develop destinations located in the proximity of the Grand Lucayan Resort that is subsidized by the Bahamian Government.
The Royal Caribbean boasts of engaging service, and this is all due to the presence of employees who are well trained and are in the know of what exactly they are doing. The company has a total of 77,000 employees all who are under the President and CEO of the Royal Caribbean International known as Michael Bayley. The other CEO of the Royal Caribbean cruises and who also acts as the chairman is Richard D. Fain (Josep, 2018). Michael is responsible for both shore-side and ship employees, and generally how the cruise-line operates. He is also charged with the responsibility of inspiring the troops, so to speak so that they can perform in the best way they know-how and deliver excellent and favourable results. The company’s leadership trickles down from the CEO, followed by the members of the Board, Board Committees, and the other employees within the company within their different departments.
The stakeholders within the company can be said to range from the employees who work to ensure that the company is gainful. There are the guests on the cruise ships which provide the money for services rendered and without whom there would be no Royal Caribbean Cruises. The local communities, port authorities, creditors and suppliers form another part of the stakeholder group are all integral to the proper development and culmination of the company’s vision and mission as a whole. Richard D. Fain has bought shares within the RCL stock and as such, owns up to 777,137 shares (Josep, 2018). He is an investor within the company that he runs, and this shows a high level of commitment to the company that he is leading. He believes in it and is assured of its prosperity. The figure below gives direct visualization of the Stakeholders with a stake within the RCL group.
Royal Caribbean has brought various external stakeholders into the fold so as to validate their initial concerns stemming from their internal assessment by taking a survey of both their customers and their employees. They also went as afar as to engage in interviews for stakeholder positions among the various Non-governmental organizations including, the Fairtrade USA, their trade partner the Cruise Lines International Association, their industry peers and other avenues. The results of this hunt resulted in an assessment and consequential review by a reporting working group responsible for critical topics within the company. This group is then able to provide various avenues that would enable better and informed responses to various stakeholder concerns and work towards making them feel heard. A proper rapport among the different entities of the company from top tier leadership to the lowest level employee provides for the appropriate functioning of the company since the interests, and development goals of the said company are properly aligned.
Sustainability is a crucial aspect that the company is significantly focused on since it ensures that the company remains viable over time. The Royal Caribbean Cruise Ship line has a sound commitment to stewardship. It has the mind to see this continue regardless of the various situations that arise within their range of business (Carlos, 2018). Their sustainability report evidences not only a framework that provides for reflection on their performances and their specific internal and external factors that influence their operations but also the identification of various steps that they can adopt in order to improve upon their past successes and build on their proportionate value for both the company and associate stakeholders.
Standardization can be said to be the manner in which certain standards are put in place to ensure the proper, unique creation of a specific good or service taking into account the opinions of the relevant parties within the particular entity (Romero, 2015). This ensures uniformity and consistency of quality of the product. RCL has been consistent in the products that they produce, ensuring that they are unique and a step-up from the previous product to keep their current customers and attract new ones. They are known worldwide for their innovations, and they do not disappoint each time. They have practised both differentiation and diversification in terms of their product value and production and ensured that what they offer is entirely separate from what the other top of the line cruise ship companies offer. The different experiences that they provide within the array of ships provide guests with a large variety to effectively choose from.
The form of management within the cruise ship leadership systems has greatly evolved, although certain aspects remain the same such as the official ranking system. The traditional militarized hierarchy on cruise ships is still said to be entirely necessary by one of the captains within the Royal Caribbean’s outfit (Romero, 2015). There is a great deal of centralization since the information that trickles down from the CEO is what is effected within the various ships and among the offshore employees as well. Within recent cruise ships, the Captain is still the voice of the leader, and he is aided by various senior officers who deal with operations within the ship and report to the captain after that. These senior positions include posts such as those of Staff Captain, Hotel Director, Chief Engineer and lots more. This, therefore, also shows a de-localized form of leadership since it allows the different departments to carry out the orders from above in a way that they are certain will properly benefit their specific departments.
Royal Caribbean has made a point to come up with a system that ensures that they can identify their different employees in terms of what their duties entail. It is a stripe system that is dependent on the levels of the ship. The employees found on the deck possess black and gold stripes, those who work within the engine room wear purple and gold stripes, those in the hospitality department have white and gold stripes, and the medics on the ship have hold red and gold stripes. This differentiative system makes the employees visible even to the guests. The higher your position within the ship, the more stripes you get; it is indicative of rank. The Captain has the highest number of stripes across the board (Pallis, 2018). The military-style is not applicable nor comfortable for everyone, although it seems to be the most effective.
Organizational Domain.
Royal Caribbean Cruises Ltd. is one of the most prominent entities that function within the world cruises market. The company has been big on innovations from the onset and has been able to afford the company with a sustainable competitive advantage over its counterparts in the industry (Negret, 2016). Currently, the company’s marketing performance has been on an upward trajectory and is offering its products and its service on an increasingly worldwide scale. All these different strategies have been entirely instrumental in ensuring that the company maintains an upper hand and now the task falls to them to keep their winning streak alive. Notably, for the past four years, the company has been recognized by the Ethisphere Institute as one of the world’s most ethical companies (Gregoriou, 2017). Other than innovation, some other core competencies of theirs include top drawer customer service, expanding towards global operations and their high level of flexibility.
As mentioned earlier, one of the key stakeholders within the Royal Caribbean’s business fold is its customers. The tourism field is mostly focused on ensuring that those who patronize their intangible products are satisfied so that they can recommend your products to your friends and also come back again themselves (Tfaily,2018). Royal Caribbean Cruises is quality specific and has put into effect a rigorous quality control system which monitors the services rendered to the customers (Negret, 2016). They visualize their customers as part of the company and endeavour to provide them with the kind of service that even they would appreciate if the tables were turned. They possess effective communication systems that allow for the collection of customer and employee feedback so that they know how to build on whatever services they were offering initially and make it even better for later.
Another advantage that they have over their competitors is their ability to maintain their flexibility within their different operations, products, services and company policy. The company is responsible for six different brands within the cruise ship line of business, and all these brands attract different types of customers (Josep, 2018). They are yet to merge all these brands because they appreciate the differentiation of the product that they can provide to their clients. This is an aspect that sets them apart and makes them a hot commodity, especially among avid travellers looking for adventure and constant change of scenery. In terms of pricing for their products, Royal Caribbean is searching for different ways to make their prices more flexible so that they can reach a variety of customers (Josep, 2018). This is in terms of aspects such as discounts or alternate pricing for senior citizens and couples. Taking advantage of this kind of flexibility will go a long way in aiding the company to alter its performance and properly acclimatize to the rapidly changing business environment faster than their rival companies.
Expansion of operations is one of the major goals of all companies that are operating within any sphere today. Royal Caribbean has not been left behind in this regard, seeing as it is conducting business within a global capacity and that global market development forms a significant docket within its vital marketing strategies (Jones, 2017). The company is able to reach certain destinations where no other company has ventured into before henceforth creating certain exclusive products and services that appeal to different kinds of clients. They boast of new destinations and different remote areas that give them an increasingly competitive edge. Global Market expansion is not only a favourable business trend, but it is also a wise choice that any company should put in place if they wish to expand their business portfolio and build on their requirements. If they are only concentrating on local markets and fail to diverse their focus, then their competitors will overtake them.
Aside from what has made Royal Caribbean prosper over time, certain disadvantages are synonymous with them that have not allowed for their consistent growth and increase in revenue. They may be at the top as at now, but if they can deal with their disadvantages and turn them into advantages, they shall be able to surpass even their own goals. One of their weaknesses is that they are not capable of merging with firms that have a work culture that differs from their own. Their acquisition prowess is only limited to companies that share similarities to their operating processes. They are also at the losing end when it comes to the matter of financial planning. In the issue of financial planning, especially for a company that is this robust and far-reaching, it needs to be effective and transparent with an in-depth look into their liquid asset and current asset ratio, the numbers specific that Royal Caribbean requires to spend their cash in a more effective manner (Jones, 2017). Their inventory is considerably on the higher side compared to that of their competitors. So they are in a position to raise an increased amount of capital for investment in their network. This could prove to be a detriment in the long-term growth of the company.
Regardless of the fact that the focus of the company is on their innovations, they need to also place some emphasis on maintaining their financial investments so that they can see their developments to fruition. Given the extent of their vision for expansion, more money is required to be put into their technological advancements to integrate the processes across the board (Rossi, 2018). As the situation stands at the moment, the investments required to be put into technologies is not at par with the company’s vision. It is, therefore, a given that the Royal Caribbean Cruises Ltd needs to balance both its internal resources with their accompanying marketing strategy. Their choice to expand globally is very reasonable given the nature of their business, and at the moment, they own adequate resources to maintain their competitive streak within the market. Progress is, therefore, key for all intents and purposes.
Most Innovative Product Put forth by RCL.
Royal Caribbean’s main aim is to create different vessels that astound and provide experiences that amaze (Esteve-perez, 2015). With this mission in mind, they have been instrumental in the field of innovation. They have become increasingly more inventive in the subsequent ship class developments henceforth successfully claiming cruise industry firsts on nearly all their creations. Their innovations in providing an onboard wow factor are what has greatly driven up their status within the cruise ship industry.
Certain technologies that they have come up with that have completely revolutionized the industry range from facial recognition, GPS mapping and the utilization of Bluetooth-enabled beacons that have entirely streamlined the boarding process. Virtual environments and gaming systems have also transformed the experience on these boats. The guests feel as if they have been effectively transported, and this is what makes them want to come back and travel with them once more. Another innovative move is the introduction of the ‘WOW Bands’ which act as the mode of locking and unlocking the guests’ rooms without them actually having to get out of bed and doing it manually. They can use these same bands to control the temperature within their rooms. Royal Caribbean involves the use of various technological advancements to ease the boarding process since, according to them, ‘less time spent boarding affords even more time allocation for vacationing’ (Esteve-perez, 2015). Isn’t this the kind of philosophy that significantly aligns with the beliefs of the customer?
I believe that the most innovative strategies and products developed by the company are those that have the good of the environment in mind. This is because it ensures sustainability and avoids clashing with the different environmental groups and the government in part, especially where payment of fines is involved. Royal’s new command centres are now set to utilize augmented reality to assist with manoeuvring. Their ship’s energy efficiency has been greatly improved since the Captains of the vessels operate their vessels with a keen understanding of the various limitations that they will encounter as a result of weather constraints (Ajagunna, 2017). This information is integral to the maintenance of the schedules and itinerary commitments that the guests are especially concerned about. Reduction of fuel consumption across all of their commercial fleets will go a long way in cutting down not only on costs of operation but also the company’s environmental footprint. The company is geared towards conducting fuel cell tests within their existing ships so that they can adequately determine extensive utilization of liquefied natural gas and fuel in the Icon class of ships they are developing.
The steps that they have employed to save on water consumption is also another form of innovation that I believe has propelled them to greater heights. Most of their ships are employing the use of water-saving technologies within their kitchens and laundry rooms. This has resulted in the Royal Caribbean using an average of 52 gallons of water each day in comparison to an individual on land who would consume up to 100 gallons. They also employ other technological systems such as reverse osmosis and steam desalination so that they can produce fresh water to be used onboard. If this is not the case, they resort to using local sources by a process known as bunkering (Rossi, 2018). Historically, they have been very successful with the constant improvement of their technology systems. Each new class of RCL ships show excellent levels of fuel efficiency since the appliances that they have are responsible for reducing energy consumption. They can conclusively say that they are an environmentally responsible company.
Culture of the Organization
Royal Caribbean supports a culture that is focused on maintaining the safety of its clients and its employees (Carlos, 2018). It is big on employee engagement and as such, has been able to cut down on the levels of employee turnovers and retain good hardworking and loyal employees as well. There is the provision of a website whereby the employees are allowed to give the ratings of their work experience with the company. There is an open line of communication whereby the higher-ups can learn about what their employees feel and where exactly specific changes need to be made so that the provision of their services can be more productive. Within their reviews, the employees show a certain level of satisfaction and are comfortable working within their diverse environment.
The comments made by the employees also give credence to their managers and describe them as being fair, respectful and reserving judgement whenever there is a certain level of incompetence shown by their sub-ordinates. Royal Caribbean is concerned with the safety of its employees and has safety and medical centres where the same employees and the guest can raise any issues they may have in that respect. They have a telemedicine feature within most of the ships which allow those doctors on board to consult with other doctors who are on land whenever they are in doubt.
Royal Caribbean possess a performance management philosophy system which is responsible for giving out certain global core competency for all of the employees located in different parts of the world. Their management team is responsible for maintaining the ethics within the company and providing a strong sense of purpose among those who work within the entity (Jones, 2017). Their success would not have been made possible if they did not maintain a particular directive that ensures that all the employees and the employers co-exist within the company. One improvement that I would be remiss if I did not mention they require would be reneging on the employee benefits to spill over to their direct family members. They are constantly away from home, and as such, I’m sure they would be more comfortable if they knew that their families back home were properly taken care of even in their absence.
Current State of The Organization
The Royal Caribbean, just like all the companies that have been hard hit by the Corona Virus pandemic, is fighting to stay afloat. In the previous years, they have only been showing a steady progression and were well on their way to achieving record-breaking numbers this year. They are set to lose up to $1.44 billion as a result of the pandemic. They employed various approaches to dealing with the effects of the epidemic, such as prompt communication and accountability. With its systematic crisis aversion, they are more likely to recover faster compared to their competitors. They have provided options that would deal with cancellation such as 125% Royal Caribbean Cruise credit, a loft and shift program which gives the customer a chance to choose the same itinerary for a different sail date and year at no extra cost even though the new itinerary may be priced higher. The leaders are dealing with the matter strategically so that they can keep the company afloat. They are offering different incentives left and right for their guests so that they can encourage them to book with them even later on.
Richard D. Fain, the chairman and CEO stated that they are “responding to the dramatic changes in business conditions caused by the Coronavirus has required focus, dedication, ingenuity and improvisation from all their people and their efforts have been non-stop” In their capacity as company leaders they shall aim to anticipate and solve for the new environment so that their guests remain both safe and completely healthy.
Conclusion
As seen from the above research, Royal Caribbean is capable of coming up from under this dire situation on top owing to their incredible track record over the years. They are poised in the right direction for the development, and they shall continue to strategically think and build all while incorporating the necessary changes required by the aftermath of the pandemic.
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