Strategic Planning & Analysis Flashcards

Customer Lifetime Value (CLV) is strategically important to cruise lines because:

Answer: It guides investment in loyalty programs by quantifying long-term revenue from repeat cruisers

CLV helps cruise lines and agencies justify loyalty investment by calculating the total expected revenue from a repeat cruiser over their lifetime, directing resources toward high-value retention.

Which scenario best illustrates 'cannibalization risk' in cruise product planning?

Answer: A cruise line introducing a new luxury brand that draws bookings away from its existing premium brand

Cannibalization occurs when a new product draws sales from an existing product in the same company's portfolio, such as a new luxury brand competing with the established premium brand.

A travel agency wants to evaluate which cruise lines deliver the best return on its marketing investment. The most relevant metric to compare would be:

Answer: Revenue per marketing dollar spent by cruise line

Revenue per marketing dollar measures how efficiently each cruise line converts the agency's marketing spend into actual sales, enabling data-driven allocation of promotional resources.

Scenario analysis in cruise strategic planning is used to:

Answer: Evaluate multiple future outcomes (e.g., fuel spike, pandemic, recession) and prepare contingency responses

Scenario analysis models different plausible futures, allowing cruise lines and agencies to stress-test their strategies and develop contingency plans before disruptions occur.

An agency tracking its 'close rate' for cruise inquiries is measuring:

Answer: The proportion of cruise inquiries that convert into confirmed bookings

Close rate measures sales effectiveness by tracking what percentage of leads or inquiries result in actual bookings, a key performance indicator for cruise sales strategy.

Which competitive advantage is hardest for rivals to replicate and most sustainable for a cruise line?

Answer: A deeply embedded loyalty program with high switching costs and personalized data

Loyalty programs with rich behavioral data create high switching costs and personalized experiences that competitors cannot quickly copy, providing a durable competitive moat.

A cruise line's decision to acquire a private island destination is best described as which type of strategic move?

Answer: Vertical integration (backward)

Acquiring a private island is backward vertical integration — the cruise line takes control of a key input in its supply chain (destination experience) rather than relying on third-party ports.