Coral Divers Case Study
After investigating Coral Divers diligently, I am delighted to be hired as a consultant to evaluate Coral Divers strategic situation. Based on my findings, I believe Coral Divers is in a decreasing state of financials and diminishing competitive position. Their net income is negative and increasing in 2005 through 2007. In addition, there is a lack of differentiators at Coral Divers, hindering them from their competition. The issue at hand is whether Coral Divers should take on a potential growth strategy, which consists of adding a family vacation portion to their resort, and an adventure diving aspect. This would enable them to cater to a greater variety of people and allow increased competition.
Exhibit 1.1
Supplier Power * Minimal * Integrating vertically not likely * Service based
Degree of Rivalry * High Competitive industry = Low returns because the cost of competition is high * Tough economy = bad *
Buyer Power * High * Amenities and service important * Low cost in comparing resorts
Threat Of Substitutes * Vacations elsewhere doing other activities is likely
Threat Of New Entrants * High * Easy to open resort To analyze the industry I will start with a 5-forces analysis on the Scuba Diving Resort industry, shown in exhibit 1.1.
Based on the Five Forces Analysis, we can determine that the scuba diver resort industry exists in an intensely competitive market. It is a growing market in popularity over the years and is continuing to grow. Most divers range in age from 10 to 39. 80% of divers are educated and have families. Diving Resorts earn revenue from individual divers, family divers, accommodation and amenities, as well as types of vacations and dives offered. In this case, accommodation, amenities, and quality diving excursions is means in combating threat of new entrants, and the degree of rivalry. Keeping a close eye on costs for vacationers in the resort is also essential. Because of the
Exhibit 1.1
Supplier Power * Minimal * Integrating vertically not likely * Service based
Degree of Rivalry * High Competitive industry = Low returns because the cost of competition is high * Tough economy = bad *
Buyer Power * High * Amenities and service important * Low cost in comparing resorts
Threat Of Substitutes * Vacations elsewhere doing other activities is likely
Threat Of New Entrants * High * Easy to open resort To analyze the industry I will start with a 5-forces analysis on the Scuba Diving Resort industry, shown in exhibit 1.1.
Based on the Five Forces Analysis, we can determine that the scuba diver resort industry exists in an intensely competitive market. It is a growing market in popularity over the years and is continuing to grow. Most divers range in age from 10 to 39. 80% of divers are educated and have families. Diving Resorts earn revenue from individual divers, family divers, accommodation and amenities, as well as types of vacations and dives offered. In this case, accommodation, amenities, and quality diving excursions is means in combating threat of new entrants, and the degree of rivalry. Keeping a close eye on costs for vacationers in the resort is also essential. Because of the