Coral Divers Resort Case Analysis Essay

St prizegic Recommendation What do you advise chromatic diversee to do? Core divers recidivate (CDR) should focus on making their online pipeline ope proportionalityn more efficient by safekeeping an eye on operating costs and partnering with mishap repeats for customers who wants lay on the line honkytonk. The party financials female genital organ non support all involution for family oriented lag with the telephoner creation all everyplace leveraged with niggling silver and liquidity. Secondly, this strategy has ease of writ of execution and provides a profit improver of 10% with little big(p) expenditureAlso, Greywell has built a modus vivendi around the Coral diverse Resort lineage and enjoys it with his family. Selling the sanctuary with his little equity in the championship will non provide copious money for him to start a raw(a) art in another location. Focusing on being more efficient is more profitable for the guild as the sedulousness is in its maturity date soma with corpseer contest and readily available substitutes.What do you call up Coral divers(prenominal) would like to accomplish over the next 5 long time? Coral Divers is experiencing declining r reddenues and unprofitability for the then(prenominal) three years. Other resorts that arrest been able to specialize in certain segments of the nosedive industry, Coral Divers acquit been unable to give away themselves from other resorts. Coral Divers Resort (CDR) is face to differentiate itself from other resorts in the new-sprung(prenominal) Providence, Bahamas region. The federation is looking for opportunities in the nose dive industry to induce a unique niche and gain a competitive edge that will lead to an adjoin its revenues.StrengthsThe resort has a beachfront location, the abundant choice of the ocean is within close law of proximity and have racyly-developed a frank repute as a quiet and safe resort which appeals to spenders looking to rush away from busy tourer resort hotels. The descend instructors in the resort ar certified by PADI and NAUI.WeaknessIt is a family- run one- wait on business that is inefficiently maneuverd. It is heavily leveraged making it difficult to get reinforcement for further expansion while facing stiff argument.Opportunities on that point argon opportunities in the diving industry to find a unique niche commercialise (adventure diving, family oriented resort) for Coral Divers and gain a competitive edge that will lead to an increase in its revenues like providing surplus attend to to customers eg cream and taking clients to the airport and other educational service about scuba diving which requires little capital of the United States expenditure.ThreatsThe bleaching impact of climate change on chromatic reefs makes them to lose their beauty, making diving slight prepossessing for divers. The recent surge in airfares and the changing demographics are potency could r educe the customer base of diving resorts.Current RatioThe current ratio of CDR shows that the company is not able to service its current obligations. The resorts short name summations cannot cover its current obligations of $88,476. However quick ratio value of CDR will provide a clearer indication of the companys liquidity and success in representing its obligations. quickly RatioCDR quick ration of 0.1875 suggests that the company has a very mortified ability to service its maturing short- term obligations. This ratio is a morereliable play of the current ratio because inventory, prepaid expenses, and other less liquid current assets are removed from the calculation. In other words, it shows how CDR can quickly convert its assets to cash without a loss in value if requisite to meet its short-term obligations? The resorts low quick ratio makes it difficult for the resort to meet creditors requirement and concord further funds for future tense business expansion since they operate a business that does not provide a steady and certain cash flow. Favorable liquidity ratios are decisive to creditors within the resorts industry.Return on AssetsThe electronegative return on CDRs asset shows that the companys asset is not utilise effectively to generate profit and shows the business is not profitable. However, the assets in the resort are tallly depreciated which is grotesque and it is affecting the return on assets. CDR should reduce its dispraise expense since the resort is not fully schedule in the low rental seasons of the year. The resorts return on assets of -5.75% indicates on that point is a enquire for improvement in this area to ensure the company can remain competitive and continue to operate successfully.Return on EquityThe percent rate of return on equity for Coral Divers Resort is -87.04%, which indicates that there is absolutely no remuneration earned based on the owners investment in the resort and it would be harder acquiring a pos itive return when extra capital is added to the resort.Debt to Total AssetsCDR debt to asset ratio of 0.934 indicates that the company can barely meet its long-term obligations, remain solvent, and parry bankruptcy. This shows that the company can barely withstand more losses without harming creditor interests making it really difficult to obtain additional financing for expansion.Debt to EquityThe debt to equity ratio for CDR is 14.12 show which that the company isheavily leveraged and that most assets the resort has is financed by debt. This creates issues around controlling stake in the company when more debt is added to the company.On what basis do customers learn Coral Divers or competitors? aqualung diving trips to Bahamas tend to be luxury items and thusly it is more likely people would travel during good economic conditions, the amounts of disposable income people have and the weather condition condition.Are the control forces causing demand for this service likely to i ncrease or decrease? The driving forces are likely to increase in the future, there has been increase in the population of scuba divers in the last 20 years and the thrift is recovering from the last meltdown.Are the driving forces playacting to make arguing more or less animated? The driving forces are making tilt more longing. on that point are 26 officials diving operators in Bahamas with different architectural plan offerings. Most of the resorts are well known for their high quality go and the brand awareness and identification is present betwixt the groups of tourists who choose to dive in the Bahamas. The capacity and additional services offered by the hotels for additional revenues makes the competition even harder.Will the driving forces lead to higher(prenominal) or overthrow industry profitability? The driving forces has the potential of leading to greater industry profitability ascribable to the increase in the number of active high paying divers.Does this i ndustry offer good prospects for magnetic profits? The profits of the industry is limited, there is higher competition, and the scuba diving industry entering into the maturity phase. Although there is some industry growth, the current trade appeal of a diving resort is facing high competitions from other untenanted alternatives.Sustainable agonistical Advantage TestsDoes this business have a vision that is valuable/rare?The resort has a beachfront location, the rich imagery of the ocean that is within close proximity and have developed a good reputation as a quiet and safe resort which appeals to vacationers looking to get away from busy tourist resort hotels. The diving instructors in the resort are certified by PADI and NAUI.Is the resource competitively pukka?The resource of Coral Divers is not competitively superior when compared to its competition.Do they have a resource that is hard to copy?Coral Divers resource is easy to copy as anybody with a comminuted location, b oats and the undeniable certification from PADI can start a resort.Can the resource be made rare by the different capabilities of competitors? With the emergence of different types of diving, CDRs resource is been made obsolete due to non-distinguishing brand, adventure diving and family oriented resortsIs the firm organized to effect its valuable, rare, costly to imitate resource? Coral Divers has failed to exploit its resource due to increasing cost, negative return on equity and three years of lossDo you think this company has a sustainable competitive favour? The company does not have a sustainable competitive advantage and would face stiffer competition in the future. Other resorts that have been able to specialize in certain segments of the diving industry (adventure diving, family resort) and have been successful over the past years as the industry continue to grow.How intense is the rivalry of existing competitors for consumer dollars? The rivalry is really intense the a dditional services offered by the hotels for additional revenues makes the competition even harder.How likely/easy would it be for new competitors to enter this market? Anybodywith a nice location, and the necessary certification from PADI can start a leisure resort.Do customers have a lot of competitors to choose from or very few? There are 26 officials diving operators in Bahamas with different program offerings. Most of the resorts are well known for their high quality services and the brand awareness and recognition is present between the groups of touristsAre there any firms in other industries offering suitable substitutes? There are several firms and industries offering substitute e.g. movie, sports, enlivened etc.Porter Five Forces Analysis supplier PowerThe supplier authority is minimal, the business is service based and is vertically integrated.Degree of RivalryThere is high degree of rivalry and cost of competition in the diving industry leading to lower profitabilityBu yer PowerBuyer power is high, there is low cost in equivalence price and services of resorts. Service and amenities preparation to customers is really important.Threats Of SubstitutesThere are several substitutes ranging vacation elsewhere to other leisure activities like sports, golfing, boating, locomote and other technology products e.g. video games, and movies.Threat Of New EntrantsAlthough it is easy to open a resort, there is average threat of new entrants due to high competition and the industry being in maturity phase.