Coral Divers Resport

Mr. Jonathan Greywell is contemplating a stemma decision in which there are four existent options. He is the owner of precious coral dissimilar dawdle, located in the Bahamas on the island of wise Providence. He caters to customers determineing for a remediate package that includes nose souse. This case discusses a worsening in revenues for the three-year period of 2005-2007. His options include selling the amend, start outnering with a nonher worry, focus oning on spunky-pitched margin military control, or improve his accredited business to be more(prenominal) than competitive. interchange Coral Divers amendThe most meaning(a) reason to sell the business is the declining revenues. However, Greywell would convey to find another means of income a lot(prenominal)(prenominal) as another business venture or a refreshful attitude for a similar business. Greywell could have a business valuation simulatee, but since his paleness in the business is low, he would not have much left everyplace to start another business venture. Greywell has make a lifestyle around the Coral Divers resort hotel business and enjoys it. At this time, I recommend that he focus on his other options and keep the business. Partnering with Rascals in paradiseEntering into a business agreement with Rascals in Paradise would change the direction of Greywells business to a more family-oriented business. In addition to rebranding Coral Reef Resort to target families, there would be supernumerary capital improvement expenses. Cottage renovations would be nearly $50,000. The addition of a repeat area is estimated at $15,000. The wages expense to utilize a chef could vary based on the quality and experience of the chef. However, making uptake of an existing facility such as the kitchen and dining room would add an special stream of revenue and would help to appendage the supererogatory costs.In my opinion is it unrealistic for the resort to be at 100% cap acitor on a regular basis. Therefore, if we escort at realistic numbers employ historical Coral Reef Resort data, we heap reasonably predict a 90% capacity in the high season an improvement over the real 70%. The revenue generated from this increase is about $100,000. Another factor to acquire in making this decision is whether Rascals is worth the 30% commission. The fees for families (i. e. more large number per room, etc. ) when compared to the operation expenses keep the scratch margin the same with the added realize of a unique identity in the market.Higher perimeter Adventure Diving Adventure diving generates a higher margin and thus it is a good idea for Greywell to consider adding it to the mix of flump offerings. However, it croupenot be considered without measure the risks involved. Coral Divers Resort has an beautiful reputation and careful consideration should be given as to how to protect this intangible asset asset. Adventure dives would necessity spe cifically accomplished and experienced dive masters. Simply discipline existing employees might pose an additional risk since they arent too excite about diving with sharks and besides escape experience that might be facilitatory for safety issues.Within an hours blank space away, competitors are already a part of this market and bringing in $ one hundred fifteen per seek dive which is $50 in a higher place the regular dive experience. An additional $600 per hebdomad can be earned on two days per calendar week with an mediocre of 6 customers separately of those days. Despite hiring or training costs and additional $31,200 in revenue can be generated, subsequently the expenses for shark food and the special dive suit. Perhaps more pretend dive business is possible, yet this estimate would need to repose conservative until the demand can be established and adjustments made accordingly.Improving existent Coral Divers Resort Greywell should look at running the business mo re expeditiously to see where he can lower expenses such as direct costs and some(prenominal) fixed and changeable costs. However, improved efficiency alone allowing bring Greywells current line of exert of reduced revenue. He needs to be looking at additional revenue sources by bringing in more customers for existing business or new offerings. While it is a good benefit to customers to get free services such as afternoon rides, many of those customers would also pay to go.If he had an average of 9 free-ride customers per week pay only $25 for the ride, he would generate another $225 per week in revenue. He could add a box lunch for purchase, a sting package, or a cocktail option. Having more offerings will help to increase revenue. Although I dont expect these food and swallow items on the boats to bring in much revenue and could be more work for too little reward. Greywell would certainly not want to be distracted from his midpoint business. Conclusion Greywell should go with the Rascals in Paradise partnership. They can help rebrand and market the resort driving up occupancy rates.While change magnitude profits through occupancy and additional revenue streams are a supreme move, Greywell will still need to solve his issue of high debt in pitch to make the renovations needed. In addition, he should already be running the business efficiently and regularly seeking out ways to maintain a high train of efficiency. I would not recommend that Greywell insert into the Adventure Diving segment of the business under the Coral Divers Resort stimulate. The risks of injury are too high and an accident can have a very adverse effect on the business reputation.Also, in my opinion, a family business and an adventure business would serve different segments and have different branding messages. Having both under the same resort name will dilute the message and negatively impact the more profitable business segment. Instead, if Greywell feels passionate abou t pursuing the adventure business, I recommend he retain until his partnership with Rascals shows results and then begin a subsidiary or a distract business with its own branding that caters to the adventure diving market. This way, his businesses can feed each other and the marketing messages for each remain clear and focused.