Flevy Management Insights Case Study
Digital Transformation Strategy for Scenic Cruises in the Caribbean Market
     Joseph Robinson    |    Business Process Management


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Business Process Management to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR A Caribbean cruise company saw a 20% drop in bookings and 15% in satisfaction due to outdated systems and rising competition. After launching a digital booking platform and enhancing customer experience, bookings rose by 25% and satisfaction by 15%. This highlights the critical role of Digital Transformation and Customer Engagement in reclaiming market share.

Reading time: 9 minutes

Consider this scenario: A leading Caribbean scenic cruise company, specializing in unique, high-end sea experiences, is facing significant challenges in adapting to Business Process Management in the digital age.

The company has observed a 20% decline in customer bookings and a 15% decrease in customer satisfaction scores over the past two years, primarily due to outdated booking systems and lack of personalized customer engagement. External pressures include increased competition from new digital-first entrants and changing consumer expectations towards more customizable and digitally accessible services. The primary strategic objective of the organization is to undergo a comprehensive digital transformation to enhance customer experience, streamline operations, and regain its market position as the premier provider of scenic cruises in the Caribbean.



This organization, a pioneer in the scenic cruise industry, is now at a crossroads, with digital transformation being imperative for survival and growth. The underpinning issues seem to be the company's reliance on outdated technology and processes, alongside a culture resistant to change. These factors have not only affected operational efficiency but also the ability to innovate and meet evolving customer expectations.

External Analysis

The scenic and sightseeing transportation industry is witnessing a paradigm shift, with technology playing a pivotal role in shaping consumer behavior and expectations. Digital platforms are now essential for customer engagement, booking, and service customization, setting new standards for industry practices.

Analyzing the competitive landscape reveals several key insights:

  • Internal Rivalry: The industry sees moderate to high internal rivalry, with a mix of established players and new, agile entrants competing on digital offerings and customer experience.
  • Supplier Power: Limited, as the main resources are the scenic locations themselves and the vessels, which are owned by the operators.
  • Buyer Power: Increasing, as customers have more options and information, enabling them to demand higher quality services and personalization.
  • Threat of New Entrants: High, especially from digital-first companies that can offer innovative and flexible experiences with lower overheads.
  • Threat of Substitutes: Moderate, with alternative tourism and entertainment options vying for the same discretionary spending.

Emerging trends indicate a shift towards experiential travel, digital integration for personalized experiences, and sustainability. Changes in the industry dynamics include:

  • Increased preference for customizable and immersive experiences, offering opportunities to create differentiated, high-value offerings but also requiring significant investments in technology and content.
  • Adoption of digital platforms for booking and customer engagement, necessitating upgrades to IT infrastructure and capabilities.
  • Heightened focus on sustainable practices, presenting both a challenge to adapt operations and an opportunity to appeal to environmentally conscious consumers.

For a deeper analysis, take a look at these External Analysis best practices:

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PEST Analysis (11-slide PowerPoint deck)
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Internal Assessment

The organization has a strong brand and loyal customer base, underpinned by its unique cruise experiences and deep knowledge of the Caribbean. However, it struggles with digital adoption, operational inefficiencies, and an organizational culture resistant to change.

SWOT Analysis

Strengths include a well-established brand and exclusive access to certain scenic routes. Opportunities lie in leveraging technology to enhance customer experience and operational efficiency. Weaknesses are evident in the company's digital infrastructure and resistance to change. Threats include the entry of new, agile competitors and changing consumer expectations.

VRIO Analysis

The company's brand and unique scenic routes are valuable and rare, offering a competitive advantage. However, its digital capabilities are neither rare nor costly to imitate, indicating a need for significant improvement in this area to sustain competitive advantage.

Distinctive Capabilities Analysis

Success in the scenic cruise market requires excellence in customer experience, operational efficiency, and innovation. The company's strong brand and unique offerings are key assets, but it must develop capabilities in digital innovation and customer engagement to maintain its market position.

Strategic Initiatives

Considering the insights gathered from the External Analysis and Internal Assessment, the management has decided to pursue the following strategic initiatives over the next 24 months :

  • Digital Platform Development: Launch a comprehensive digital booking and engagement platform to offer customizable cruise experiences, aiming to enhance customer satisfaction and operational efficiency. This initiative will create value by improving the customer journey and streamlining internal processes. It requires investment in technology infrastructure and digital marketing capabilities.
  • Customer Experience Innovation: Implement new onboard and offboard customer engagement programs, utilizing digital tools to create personalized experiences. The intended impact is to increase customer loyalty and attract new segments. Value creation stems from leveraging data analytics for personalized offerings, necessitating investments in data analytics tools and staff training.
  • Sustainability Integration: Develop and implement a sustainability program, focusing on reducing environmental impact and promoting eco-friendly practices. This initiative aims to align the company with emerging consumer values around sustainability, potentially increasing brand loyalty and market differentiation. Resource requirements include sustainability consulting, operational changes, and marketing to communicate efforts.

Business Process Management Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


Without data, you're just another person with an opinion.
     – W. Edwards Deming

  • Customer Satisfaction Score: Essential for measuring the impact of digital transformation and customer experience initiatives on overall satisfaction.
  • Digital Platform Adoption Rate: Tracks the effectiveness of the new digital booking and engagement platform in attracting and retaining users.
  • Sustainability Program Impact: Measures the success of sustainability efforts in reducing environmental impact and enhancing brand perception.

These KPIs offer insights into the effectiveness of strategic initiatives, enabling timely adjustments and demonstrating progress to stakeholders. Monitoring these metrics closely will ensure the strategic plan remains on track and delivers the intended outcomes.

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Business Process Management Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Digital Transformation Roadmap (PPT)
  • Customer Experience Enhancement Plan (PPT)
  • Sustainability Program Framework (PPT)
  • Implementation Timeline and Milestones (Excel)

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Digital Platform Development

The strategic initiative to develop a digital platform was significantly bolstered by the application of the Blue Ocean Strategy and the Technology Acceptance Model (TAM). The Blue Ocean Strategy, a framework for creating uncontested market space and making the competition irrelevant, was instrumental in guiding the organization towards innovative digital offerings that differentiated it from competitors. The organization embarked on this path by:

  • Conducting a thorough analysis of the scenic cruise market to identify overserved and underserved customer needs, focusing on digital engagement and booking processes.
  • Developing a value innovation initiative that combined an easy-to-use booking system with unique, customizable cruise experiences, thereby creating a "blue ocean" of new market space.

Simultaneously, TAM was utilized to ensure the digital platform met user expectations for usefulness and ease of use. This was achieved through:

  • Gathering data on perceived usefulness and ease of use from potential users via prototypes and beta versions of the digital platform.
  • Iteratively refining the platform based on feedback to maximize adoption rates upon launch.

The successful deployment of these frameworks enabled the organization to launch a digital platform that was not only innovative and differentiated but also highly accepted by users. Customer bookings through the digital platform increased significantly, demonstrating the effectiveness of combining Blue Ocean Strategy with the Technology Acceptance Model to create and successfully introduce a market-leading digital service.

Customer Experience Innovation

For the strategic initiative focused on customer experience innovation, the organization implemented the Service-Dominant Logic (SDL) framework and the Customer Journey Mapping technique. SDL, which emphasizes the co-creation of value with customers, was pivotal in shifting the organization's approach towards a more customer-centric model. Following SDL principles, the company:

  • Engaged directly with customers through digital channels to understand their needs and preferences in real-time, fostering a co-creation environment for service innovation.
  • Transformed its service offerings by integrating customer feedback into the customization of cruise experiences, thereby enhancing perceived value.

Customer Journey Mapping was employed to visualize and understand the end-to-end customer experience. This process involved:

  • Identifying all the touchpoints customers have with the organization, from initial awareness through post-cruise engagement.
  • Analyzing these touchpoints to identify opportunities for improvement and innovation in service delivery.

The application of SDL and Customer Journey Mapping led to a profound transformation in how the organization approached customer engagement and service delivery. The initiative resulted in a notable increase in customer satisfaction scores and repeat bookings, validating the effectiveness of these frameworks in driving customer experience innovation.

Sustainability Integration

The strategic initiative for sustainability integration was advanced through the application of the Triple Bottom Line (TBL) framework and the Stakeholder Theory. The TBL framework, which considers environmental, social, and economic impact, guided the organization in developing a comprehensive sustainability program. The organization proceeded by:

  • Assessing its operations and supply chain to identify areas with significant environmental impact, setting measurable goals for improvement.
  • Implementing eco-friendly practices and technologies, and measuring their impact on the organization's environmental, social, and economic performance.

Stakeholder Theory was crucial for understanding and balancing the diverse interests of all parties affected by the organization's operations. This understanding was achieved by:

  • Mapping key stakeholders, including customers, employees, local communities, and suppliers, and identifying their specific interests and concerns related to sustainability.
  • Engaging with these stakeholders through forums and surveys to gather input on sustainability initiatives and incorporate their feedback into the program's design and implementation.

Implementing the TBL framework and Stakeholder Theory enabled the organization to launch a sustainability program that not only reduced its environmental footprint but also strengthened its relationships with customers, employees, and the community. The program contributed to an enhanced corporate image and increased customer loyalty, demonstrating the value of these frameworks in guiding successful sustainability integration.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Launched a digital booking and engagement platform, resulting in a 25% increase in customer bookings.
  • Implemented customer experience innovations, leading to a 15% improvement in customer satisfaction scores.
  • Developed and executed a sustainability program, achieving a 20% reduction in carbon footprint.
  • Increased digital platform adoption rate by 40%, indicating successful user acceptance and engagement.
  • Enhanced brand perception and loyalty through sustainability efforts, as evidenced by a 10% increase in repeat bookings.

Evaluating the results of the strategic initiatives reveals a successful digital transformation that significantly improved customer engagement, operational efficiency, and sustainability. The 25% increase in bookings and 15% improvement in customer satisfaction scores are direct outcomes of the digital platform development and customer experience innovations. These results underscore the effectiveness of the Blue Ocean Strategy and the Technology Acceptance Model in creating a differentiated digital offering that meets customer needs. However, the results also highlight areas for improvement, particularly in further increasing the digital adoption rate and sustaining the momentum of customer engagement. The 40% adoption rate, while significant, suggests there is room to expand digital engagement to a broader customer base. Additionally, the sustainability program's success, while impactful in reducing the carbon footprint and enhancing brand loyalty, could be further leveraged to differentiate the company in a competitive market.

Recommendations for next steps include focusing on increasing the digital platform's adoption through targeted marketing campaigns and further personalization of the customer experience. Leveraging data analytics to gain deeper insights into customer preferences can drive more customized offerings, enhancing customer satisfaction and loyalty. Additionally, expanding the sustainability program to include more innovative and visible eco-friendly practices could further differentiate the company and appeal to environmentally conscious consumers. Continuous engagement with stakeholders, particularly customers and employees, will be crucial in identifying new opportunities for innovation and improvement.


 
Joseph Robinson, New York

Operational Excellence, Management Consulting

The development of this case study was overseen by Joseph Robinson. Joseph is the VP of Strategy at Flevy with expertise in Corporate Strategy and Operational Excellence. Prior to Flevy, Joseph worked at the Boston Consulting Group. He also has an MBA from MIT Sloan.

To cite this article, please use:

Source: Sustainable Transition Strategy for Forestry SMB in Pacific Northwest, Flevy Management Insights, Joseph Robinson, 2024


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