Case Notes/Answers
ROYAL CARIBBEAN CRUISES LTD. by Warren McFarlan
Valerie Massoni
Discussion Questions:
1. How comfortable are you with the IT organization at RCCL?
2. Do you agree with the 9/12/2001 downsizing?
3. Does the applications development portfolio look reasonable?
4. What questions would you ask concerning the development portfolio?
, 5-306-008
JULY 1, 2005
TEACHING NOTE
Royal Caribbean Cruises Ltd.
Objective
This case illustrates the complexities of establishing an IT plan in a highly volatile environment.
Questions:
1. How comfortable are you with the IT organization at RCCL?
2. Do you agree with the 9/12/2001 downsizing?
3. Does the applications development portfolio look reasonable?
4. What questions would you ask concerning the development portfolio?
I begin the discussion by eliciting from the class, an understanding of who Royal Caribbean is
competitively. The following key items emerge, which I put on a sideboard:
1. They are #2 in the industry, but they are a distant second. They compete on the basis of
innovation and brand. They are profitable (even after the 9/11 hit). They have a strong
balance sheet.
2. They have both been built by acquisition and through construction of new ships. They have a
very aggressive construction schedule.
3. They are on the wrong side of economic scale. They recently lost a big acquisition, which
created morale problems.
4. 9/11 was massively disruptive and they have only recently fully recovered bookings-wise.
5. They have two brands that have a very different image, which must be nurtured. Their
challenge is to squeeze down back-office costs and commoditize standards in the invisible
aspects (to customers) of their operation, while maintaining the key elements of brand
differentiation.
ROYAL CARIBBEAN CRUISES LTD. by Warren McFarlan
Valerie Massoni
Discussion Questions:
1. How comfortable are you with the IT organization at RCCL?
2. Do you agree with the 9/12/2001 downsizing?
3. Does the applications development portfolio look reasonable?
4. What questions would you ask concerning the development portfolio?
, 5-306-008
JULY 1, 2005
TEACHING NOTE
Royal Caribbean Cruises Ltd.
Objective
This case illustrates the complexities of establishing an IT plan in a highly volatile environment.
Questions:
1. How comfortable are you with the IT organization at RCCL?
2. Do you agree with the 9/12/2001 downsizing?
3. Does the applications development portfolio look reasonable?
4. What questions would you ask concerning the development portfolio?
I begin the discussion by eliciting from the class, an understanding of who Royal Caribbean is
competitively. The following key items emerge, which I put on a sideboard:
1. They are #2 in the industry, but they are a distant second. They compete on the basis of
innovation and brand. They are profitable (even after the 9/11 hit). They have a strong
balance sheet.
2. They have both been built by acquisition and through construction of new ships. They have a
very aggressive construction schedule.
3. They are on the wrong side of economic scale. They recently lost a big acquisition, which
created morale problems.
4. 9/11 was massively disruptive and they have only recently fully recovered bookings-wise.
5. They have two brands that have a very different image, which must be nurtured. Their
challenge is to squeeze down back-office costs and commoditize standards in the invisible
aspects (to customers) of their operation, while maintaining the key elements of brand
differentiation.
