Royal Caribbean International: Business Strategies

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Table of Contents

Introduction
Generic Business Strategies
Business Strategy
Business Model
Corporate Strategy
Strategic Fit
Conclusion
References

Introduction

Royal Caribbean International, also known as Royal Caribbean Group, is a successful representative of the cruise vacationing industry. The organization provides customers with decent service and exciting opportunities, which makes individuals deal with this business when they want to choose a cruise line. This research paper focuses on Royal Caribbean Group and analyzes its generic business strategies, business strategy, business model, corporate strategy, and strategic fit between the business and corporate strategies.

Generic Business Strategies

Generic business strategies are important since they allow a company to get a competitive advantage in the market. Firstly, Royal Caribbean International relies on the cost strategy, which implies establishing costs that are lower than their customers’ (Islami et al., 2020). Secondly, a differentiation strategy is more vivid because the organization offers additional cruise services, including rock climbing, surfing in the open sea, and ice skating (Royal Caribbean International, n.d.). Thirdly, the selected company relies on a focus strategy because it concentrates on a limited service line (cruises) and a specific group of customers who are interested in the service (Islami et al., 2020). Consequently, Royal Caribbean International successfully implements a few generic business strategies.

Business Strategy

Royal Caribbean International relies on a specific strategy to position itself in a competitive environment. On the one hand, the organization provides its customers with luxury offerings that include exceptional food, lodging, and entertainment options (Matousek, 2018). That is why the organization is popular and requested among wealthy passengers. On the other hand, Royal Caribbean International focuses on middle-class customers because it relies on good service, various waterslides, and reasonable prices to attract these individuals (Matousek, 2018). Thus, one can state that the organization occupies a specific niche in the market.

Business Model

The organization has developed a particular business model to operate and succeed. Royal Caribbean International offers cruises to various international markets, and these offerings are the leading products of the business. Royal Caribbean Group consists of a few brands, and Royal Caribbean International is among them, while bring their money to these brands to book a cruise. The business earns money by providing vacation protection insurance, tours, and cancellation fees (Sheth, 2022). Furthermore, while on a ship, customers are offered numerous excursions, bars, and additional services that they can purchase (Matousek, 2018). The customer value proposition relies on the statement that the organization promotes innovation, leadership, trust, respect, and sustainability (Royal Caribbean Group, n.d.). In recent years, the coronavirus pandemic resulted in significant challenges for the company, and Royal Caribbean Group reported losses ($20.89 per share) in 2021 (Royal Caribbean Group, 2022). This business model allows for suggesting that the organization can start receiving profits once the coronavirus is over and the demand is restored.

Corporate Strategy

The organization’s corporate strategy demonstrates how the business has reached successful results. Royal Caribbean Group emerged in 1968 when a hospitality entrepreneur and three ship owners created a cruise line to sail the Caribbean (Royal Caribbean Group, n.d.). Over the years, the business has expanded its offerings, and modern customers are provided with cruises across the Asia and Pacific region, Europe, and Latin America (Sheth, 2022). The organization relies on vertically related activities because it has developed its own brands to have better access to customers and maximize profits.

The organization follows a specific corporate structure and management system to enable its operations. The Chief Executive Officer of Royal Caribbean Group is the leading officer responsible for leading the business. Each of its brands has individual management boards, and Royal Caribbean International is no exception. The organization’s official website displays the composition of the board and demonstrates who occupies the positions of Chief Executive Officer, Chief Marketing Officer, Chief Product Innovation Officer, and various Vice Presidents (Royal Caribbean International, n.d.). This structure is efficient because it implies that each board member is responsible for a specific area, which promotes better decision-making.

It has already been mentioned that the organization relies on vertical integration. Diversification is not the best choice for Royal Caribbean International, but globalization requires additional attention. Sending cruises to various parts of the world implies that it is necessary to establish business contacts in the destination country, and globalization makes this process more accessible for the organization. That is why one can state that Royal Caribbean International gains an advantage from the globalized world.

Strategic Fit

It is worth acknowledging that there is a strategic fit between the company’s business and corporate strategies. The organization requires skilled and experienced professionals to stay afloat and impress customers with exceptional and attractive offerings. That is why the management board consists of numerous professionals who are responsible for making good decisions in accountable areas. In addition to that, the focus on vertical integration has proved its efficiency because Royal Caribbean Group relies on many brands to reach more customers and increase profits.

Conclusion

The business analysis of Royal Caribbean International has demonstrated that this organization relies on specific and effective business and corporate strategies. The company has relied on particular generic strategies and appropriate measures to position itself and occupy a specific niche in the market. Royal Caribbean International attracts customers with fair prices, exceptional service, and decent offerings. The organization’s corporate structure ensures that the company has a sufficient number of professionals who can promote the business’s growth and development.

References

Royal Caribbean Group. (2022). Royal Caribbean Group reports on 2021 results, provides business update. PR Newswire. Web.

Royal Caribbean Group. (n.d.). About us. Web.

Royal Caribbean International. (n.d.). About us. Web.

Islami, X., Mustafa, N., & Topuzovska Latkovikj, M. (2020). Linking Porter’s generic strategies to firm performance. Future Business Journal, 6(1), 1-15. Web.

Matousek, M. (2018, April 2). Royal Caribbean’s CEO reveals how the world’s biggest cruise line got travelers to spend more money – And doubled its earnings. Insider. Web.

Sheth, N. (2022). How does Royal Caribbean make money? Finty. Web.

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