Posted September 19th, 2017, 11:03 AM
I don't doubt that what you say is true. But if this was the case, why have they allowed the traditional core of the brand -- the ocean going ships that had tens of thousands of former guests and that had made Crystal's reputation -- to age as they have and to have deferred for so long the replacement of the cruise ships (2022?). If I wanted to exploit the brand opportunity I would think that I would work to expand/polish the core competency and work from there -- not to allow that core product with which the brand was identified to atrophy.
Three, easy words. LOW HANGING FRUIT
. Also, I guess, ORDER OF OPERATIONS probably comes a close second.
Now, I'm not endorsing this as a strategy, mind you, but I can at least explain the logic.
The first part of this has to do with Genting's own long term goals of brand strategy, and how Crystal fits into that picture.
Genting has two existing product segments that already push the limits of their existing brand, which are ripe for luxury branding, and both are focused largely on incentives and groups -- Air and Esprit. Both of these were going to happen no matter what company Genting purchased, or whom the CEO was, because these were existing organizational branding needs for Genting. I think the variable in there is Esprit, which is more of a springboard using an existing asset to launch and develop a next generation product -- a stopgap of sorts. This isn't uncommon in the industry -- the clearest other example I can think of at the moment was how Chandris used the Galileo to launch Celebrity.
Now if you're in expansion mode, and you have an existing aging product that needs redevelopment and you
need to expand to reach a critical mass both organizationally and operationally, you can accomplish both goals faster by bringing the fastest products to market first, and use those as part of your lab for reimagining the brand for the more complex aging product. The second problem is exposure -- the longer Crystal is present in only one segment, the longer Crystal risks volatility. Expanding into another segment first mitigates that risk that some outside factor can completely disrupt all of the company's revenue at once.
Sure, all of us are customers of the existing product and naturally want to see the ocean product tackled first, but planning, design and construction are ALL faster (by like a third) on river vessels than the ocean ships, so you can quickly pump that project through each of those phases and then pass those resources on to the next project. If you did it the other way around, and try to tackle the river ships after those resources are done on the ocean project, you run into gridlock at each phase.
Lastly, if you only have one or two aspects to reimagine, you can design and test those aspects easily and without much study. Crystal's product is _WAY_ beyond that point -- from almost every angle.
- Physically, the design of their ships are entire generations obsolete, as they are based on the general arrangement of a ship that entered service in 1984 -- even before Crystal was even envisioned by NYK.
- The entire stateroom schema is no longer used in this market segment at all any longer and needs redevelopment
- The entire MDR schema was obsolete and needed to be converted
- The alternative dining schema needs a lot of updating -- including needs for additional venues, additional capacity, and refreshing existing options
- Onboard amenities need updating -- features customers expect have changed, and Crystal needs to engineer new features for their brand standard that will wow their customers and set them apart, the way many of Harmony's did in 1990.
Changes that sweeping aren't something you think up in 6 months and then place an order for a new ship. These kinds of things are concepts you design, roll out as close as you can to your existing fleet, study, gather feedback, make changes, and then set a final product that you order on new ships, because you could live with that product for the next 20 years. It's a little more expensive to change those designs after the order is placed, but it's a lot more expensive to change those designs after construction begins -- or impossible -- as NYK found out with several of Harmony's design flaws.
Anyway, I've rambled enough, you get the idea... This isn't an issue of "protecting your core product first" -- I think we'd all agree that's an important concept. Unfortunately, it's not the only factor to consider.