Saga Cruises: Strategic Issues, Challenges & Solutions Case Study

Saga Cruises: Strategic Issues, Challenges & Solutions

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Introduction - Saga Cruises Analysis: Demographics, Headquarters, and Industry Focus

The report is based on Saga Cruises, which is also known as Saga Shipping which is a division of Saga Plc and the cruise line is headquartered in England. Further, the company is a leading provider of products and services for people aged 50 and more in the UK. There are the different businesses of Saga including Insurance, emerging businesses, and travel businesses. The report includes a discussion about strategic issues like environmental, social as well as governance which affect the performance of the company. In addition to this, also describe the challenges faced by the Saga Cruises due to Covid-19 or any other things that have an impact on the activities of the business (Koilo, 2019). Further, it is essential to discuss some solutions for reducing the issues and facing challenges over some time. Moreover, some implementations in the report for solving issues and making changes in the strategies of the business. At last, some recommendations for the shipping company so that it helps to make a sustainable business practice for the future.

Strategic Issues

1. Among the PESTEL factors that influence Saga's business is the political factor. The management of Saga said that the tour business affected due to the political uncertainty. In its report, the company writes, "Trading has been largely in line with expectations, though current political uncertainty has affected early development in the introduction of tour processes (Nandonde, 2019)." Conferring to the tour company, tourism sector circumstances are chiefly competitive and are impacted by political uncertainty at present." Based on June 15 bookings, the overall year's revenues are down 4% from the same period last year. Additionally, limits will be wedged by competitive discounting in 2019.
2. Economy is another factor of PESTEL analysis that affect the different situation of Saga Cruises. A £4 million setback from Thomas Cook's management will not hinder Saga's profits, but increasing third-party harm and theft expenditures will hurt its underwriting business in the future. As per Saga, they faced a difficult situation between Augusta and January. The company expects to make between £105 million and £120 million in pre-tax profits this year (Widodo, and et.al., 2021). In Euan Sutherland's words, Saga is focused on refining performance and cost efficiency through the commercial, while strengthening their financial location and decreasing debt.
3. The threat factor of SWOT analysis is highly affecting the business of Saga Cruises. Elderly people have been traveling internationally with Saga Cruises for years. However, the varied legislation that aimed to safeguard older people have admittance to the same amenities as younger people threatens those relaxing vacations now. Proposals for a new law proscription decision in the supply of goods and services will be free by the government. Meanwhile, the number of pensioners today has full-grown rapidly due to demographic changes, and they have considerable assets and secure pensions. This implies Saga faces potentially profitable gray market opportunities, but gaining the customer's trust is crucial prior to cross-selling its multiple services.
4. In terms of negative aspect, Saga forced to provide their products for all of the people. Vacationers on Saga may have to share Mediterranean cruises with 18-to-30-year-olds, the Times reports. There were periods when the business was owned by a variety of people (Saudi, 2021). Lance Batchelor, group chief executive, said that despite long-term challenges, Saga cannot grow without a clearly differentiated offering to customers.
5. With technology advancements in independent vehicles, safety and comfort levels are improved, while automated eco-driving systems become possible. Consequently, a longitudinal controller is being explored for a green and smart autonomous vehicle (SAGA). According to theory, eco-adaptive cruise switch reductions energy ingesting while increasing vigour renewal. Using SAGA as a supervisory controller as part of a hybrid electric vehicle's equal consumption discount technique, SAGA offers unique application concepts, such as dynamic programming-based offline acceleration optimization. Control of longitudinal motion by an energy manager that actively balances efficiency and safety. It is not directly related to comfort, but is a quality criterion (Vardopoulos, and et.al., 2021). A key part of Saga's expansion plans for the future is the use of DataDistilleries' software. As a result of the software, Saga Holidays is able to improve cross-selling to customers, as well as retaining and acquiring clients. In addition to increasing revenue, the corporation hopes to lower the cost of its direct advertising initiatives. In 2016, the UK's first 24-hour solitary older adult hotline, Silver Line, signed a three-year contract with Saga. Through this collaboration, Saga donated £228k to The Silver Line in the first year, thanks to support from consumers, workers, and the company itself. A local giving program that helps charities within a 20-mile radius of our offices was launched in 2017.

Challenges

Saga Cruises is facing some serious challenges during the last year. The gathering may be most popular for its 50+ occasions, yet protection represents the entirety of the gathering's benefits. Protection is an extreme market to be in, however, and the offers have fallen vigorously this year (Komianos, 2018). We've stressed for quite a while that Saga's image doesn't have similar reverberation with the more youthful finish of its 'over 50s' client base. That would be a genuine issue because without brand unwaveringness Saga is simply one more safety net provider. There's little motivation to pay a premium for a conventional item, and tiny halting rivals are duplicating effective developments. The biggest challenge for the Saga cruises is to ensure that it remains a viable part of the travel market.

1. Stiff competition- As we see, the shipping industry is competitive and the demand for the services is considered the derived one for Saga Cruises. Inline benefits are limited to a significant degree when contrasted with tramp administrations. The fundamental explanation is that the line administration requires a high introductory capital interest in keeping up with an enormous armada of travelers and freight liners. Liners are by and large travelers’ quicker vessels. Also to give well-being, solaces, and conveniences to travelers a lot of cash is expected to be spent. The possibilities of numerous rivals in line administration are in this manner restricted. Assuming contest happens among liners it prompts their aggregate self-destruction.
2. Increase in several passengers- The expansion in traveler numbers has brought about an expansion in functional expenses, which has brought about an expansion in rates. This has additionally impacted voyage lines' benefit, and they are right now battling to make money because of high functional expenses (Parthibaraj, and et.al., 2018). One more trouble the area goes up against is a serious contest from different sorts of transportation, for example, air travel, train travel, etc, bringing about diminishing interest for Saga Cruises travels.
3. The weather situation- This is one of the most significant considerations since it influences passenger safety and comfort at Saga Cruises. If you want to enjoy your trip, you must consider the weather conditions; if it is raining or snowing, you may not be able to go on a cruise. You should be certain that this aspect does not have an impact on your travel plans.
4. Safety concerns- When it comes to safety, many things may happen on a cruise; some people become sick, some suffer mishaps due to bad weather, and so on. In addition to this, passengers should also take precautions when traveling by air or water because accidents do happen even though they may not be as frequent as those that occur on land; however, it is still important to keep an eye on your surroundings at all times so you can manage the safety. This is why all cruise ships are equipped with safety equipment such as lifeboats, fire extinguishers, and other necessary facilities. Safety measures are taken before sailing out of port and during the trip itself by keeping a close eye on weather conditions, navigation routes, etc (Loklindt, Moeller, and Kinra, 2018).
5. Change in trading patterns- As per the cruise industry, Saga Cruises faces the issue of changing trade patterns and it continues to increase in the significance of the growing economies. However, this is due to some of the conflicts between the two countries and it affects the consequences of economic growth and global trade. It hurts the value of the business and affects in the long term the activities.
6. Increasing fuel prices and the resulting increase in operating costs- The Saga Cruises infers more than 75% of the income from the offer of passes to travelers while different wellsprings of income incorporate locally available administrations like gambling hardware rental and retail concessions (Ghaderi, 2019). On-boarding costs (food, concessions, and so on) are a huge part of the expense for the journey line administrators. Yet, aside from this, fuel costs are a significant piece of the excess expense structure. As fuel prices continue to rise, it will become increasingly difficult for the cruise industry to remain profitable as measured by return on investment (ROI). In addition, the price of oil and gas prices have increased significantly in recent years, which led to a sharp decline in demand for cruises. This is because there are only a few passengers who travel on the ships with very less number of stops at different ports around the world.
7. Global economic crisis- The Saga cruise is facing a global economic crisis. The number of passengers has been decreasing for several years. This trend has continued this year. According to the latest data, the total number of passengers in 2017 will be lower than last year by about 10%. Exchange shouldn't be visible in segregation from more extensive international turns of events, since international struggles frequently spill over straightforwardly or in a roundabout way onto exchange streams (Granado, and et.al., 2021). As indicated by the International Monetary Fund (IMF), in the more extensive extent of future development, the business ought to look towards arising and emerging nations.

Solutions

In terms of handling strategic issues and challenges faced by Saga Cruises, there is a requirement for a possible solution that helps to control the damage to the company. However, the solutions can be helpful for Saga Cruises to make appropriate strategies in the future and implement them in the business activities.

1. Bilgewater solutions would entail various treatments before being discharged overboard. Installing an advanced wastewater treatment system at Saga Cruises to handle wastewater discharges such as grey and black water would be a cost-effective solution to a solvable problem. Other firms are now exploring the potential of not discharging when at sea.
2. One such option would be to develop a decarbonization strategy. This would need a cleaner energy source, such as liquefied natural gas or biodegradable gasoline. Cruise decarbonization should include science-based reduction objectives for greenhouse gas emissions. Furthermore, investing in fuel cell technology would dramatically cut greenhouse gas emissions associated with vessels. Other sources of energy, such as shore power for idle ships, should also be investigated. Decarbonization is the only path ahead, and regulators are well aware of this (Mallouppas, and Yfantis, 2021).
3. Another excellent channel for Saga Cruises that provides tremendous marketing chances is community participation. Offer to speak at local job fairs or to attend career days at high schools and universities in your area. Bring pamphlets and posters to distribute in community centers, grocery shops, and retail establishments. Sponsor a neighborhood theatre play or a local minor league team. Join community boards of directors and run a fundraising or promotion committee by providing contributors space on your cruises. Purchase local items for use on your ships, and let the shop, restaurant, and paper supply firms know you appreciate their efforts. Participate in the chambers of business in your port cities.
4. Contact prior clients and travel agencies who have sent you business in the past. For Saga Cruises relationship building is a crucial marketing tactic. Use loyalty programs to your advantage by giving discounts for referrals from past passengers. Maintain a consistent online image by providing frequent articles and stories on your website, blog, and social media platforms to keep your current audience interested. Don't bombard your consumers with regular emails, but keep them up to date when there are new cruising destinations or industry trends to report.
5. Despite the cruise industry's efforts to adopt environmentally sound practices, it is critical to enhancing awareness of the relationship between the ecosystem and the ecosystem that characterizes a location and cruise tourism overall. This is especially relevant given that, in general, cruise tourism is being pushed as an essential industry to aid the economies of many cruise destinations, but at a hidden environmental cost. In this light, Venice is an example of a cruise destination where stakeholders, visitors, and other relevant individuals should evaluate the ecological footprint of the cruise company to make sure the terminal's long-term growth (Aslam, Michaelides, and Herodotou, 2020).
6. Destinations play a significant role in itinerary development since they serve as an attractive foundation for boosting cruise passengers' trip experiences. While there is little doubt that the Saga Cruises contributes to the economy of tourism destinations, it is not certain that the benefits of attracting ships exceed the costs. Local governments throughout the world invest vast sums of money in high-quality infrastructure to accommodate huge ships and hundreds of passengers.
7. Saga Cruises has grown from being a niche market to becoming the largest leisure travel segment in the world. The cruise industry offers cruises, river cruises, and land-based tours for all types of travelers, including families, couples, and singles. Cruises are available on any type of vessel – large ships with multiple decks, catamarans, or smaller vessels that can accommodate only a few passengers at a time. Cruise lines offer different types of trips ranging from short day excursions to multi-day adventures that include ports of call in exotic locations around the globe. Increased demand is also driving the cruise industry to go into digital seas to improve efficiency and assure a pleasant trip for customers. New technologies can entail development and upgrade expenses, but they can also deliver savings that lead to a quick return on investment and increase an operator's market position (Ait Allal, and et.al., 2018). The most helpful technique is to utilize a Cruise Control coordinated arrangement.
8. Since Saga Cruises IT prerequisites require a total methodology. You expect something to help you in controlling your entire IT office and checking that all that works appropriately and consistently. Security, programming applications, equipment support, network executives, and different administrations are covered.

Implementations

It is important to implement some strategies for improving the performance of Saga Cruises and need to manage strategies for recovering the performance. In the Shipping industry, the move to digitization and automation is accelerating. Digital technology and solutions are being leveraged to improve operational efficiency and increase competitiveness. They are also being adopted to accelerate the industry's decarbonization to achieve zero emissions from international shipping by mid-century. Digital data from cameras and other data sources may be utilized for decision making as well as optimizing business, control, quality control, and validation. To ensure efficient, sustainable operations and to boost short- and long-term competitiveness, maritime stakeholders must reconsider and adjust their present strategy. The items listed below must be examined during the strategy phase (Al-Aboosi, and et.al., 2021).

The bilgewater solution needs to implement at Saga Cruises for handling the wastewater discharge as it highly affects the environment and needs to consider the effective aspect of outcomes at the workplace. Further, the new techniques can help solve the recent issues and challenges faced by the shipping company.

Digital Technologies- At Saga Cruises, the Computerized advances and arrangements are being utilized to expand the intensity and upgrade functional productivity. They are likewise being executed to prod the business along the decarbonization way to acknowledge no outflows from global transportation by mid-century. Information streams from sensors and different wellsprings of data can be utilized for navigation and improved checking, control, quality confirmation, and check. To get proficient, supportable activities and fortify short-and long haul intensity, sea partners need to revaluate their momentum procedures and adjust. Beneath you view components that need as considered during the methodology stage.

Digitalization and new advances in artificial intelligence, blockchain, IoT, and automation are becoming increasingly important for marine transportation at Saga Cruises. They aid in the streamlining of current operations, the creation of new business prospects, and the transformation of supply chain operations or commerce geographies (Chatelier, 2021).

Another new aspect of Celebrity Edge is augmented reality. Guests are given a guided tour of the boat's essential features as they go around it via an app, allowing them to become more familiar with it in a more intimate way and without the need for human helpers. In the not-too-distant future, mixed reality the merging of the virtual and real worlds will provide guests with a more engaging and immersive experience. Modern location technology, such as our HERE Places, already allows passengers to take virtual shore excursions, a type of try-before-you-buy feature that allows them to stroll around a place from the comfort of their cabin and organize their vacation more effectively at Saga Cruises (Ölçer, and et.al., 2018).

Saga Cruises can generate large new revenue streams as a result of smart technology. As more passengers rely on apps and wristbands to create a seamless experience, the data collected by these devices might be used for automated advertisement and promotion shopping and entertainment onboard and at destinations, as well as third-party services like drone-based shore-to-ship delivery. Saga Cruises should conduct an in-depth analysis of its tourist product's strengths and limitations, with a focus on strengthening the operating environment of the region's hotel and yachting sectors. It is essential to offer better services along with managing environmental conditions which can affect nature globally (Bhuiyan, 2019).

Saga Cruises' Frameworks is a progression of occasions that display the most imaginative and inventive work by understudies in the field of advanced media. Every occasion will incorporate unrecorded music, food trucks, free drinks, and different astonishments! The evening will start with a short talk by understudy moderators, trailed by a stage to associate with other industry specialists. The programs at Saga Cruises are designed to provide an enriching experience for our crew and offer them opportunities to develop new skills, meet new people, and enhance their personal growth (Janßen, and et.al., 2021). It mainly includes the systematic approach to increase the number of passengers for dealing with the changing environment and create some strategies for marketing development.

This approach to technological innovation stems from a well-intentioned desire to promote quick iteration and deployment. The principles of LEAN and Agile development have permeated every area of the development environment, exacerbating the situation. These techniques (in a nutshell) advocate for technology teams to create tiny, rapid iterations of software and get it in front of users as soon as feasible. This is the mind-set that drives the majority of the world's tech start-ups, and it works brilliantly! The issue is that it may conflict with the realities of corporate expectations and cruise liner realities. The apparent declining ROI on guest-facing software is a major source of worry in the cruise industry right now. This view stems from the quick speed of technological advancement. An app that allows a guest to preview a beach trip in virtual reality, for example, maybe really amazing today, but it may seem so antiquated in three years that it must be removed. It can be considered important for developing new strategies for the business.

Conclusions

From the above study, it can be concluded that there are many issues as well as challenges faced by Saga Cruises. Further, it helps in understanding the use of technology in the new world of modernization and using new methods along with strategies for growth. Safety is a major concern for the business and it is quite challenging for the company to deal with safety measures. In addition to this, the report shows that the global economic crisis affecting the Saga Cruises to another level and need to perform within the activities of the level of business. The company deals with many challenges in the business and considers the issues as a positive part of implementing the solutions for the future. The shipping business is very huge and offers the best services as per the requirement of the customers. They make sure to provide all facilities as per the needs while considering the different circumstances of the business. However, the solutions like development in the marketing strategies will help to make changes in the business policies and Saga Cruises will get some advantages for the enhancement in services. Thus, the company makes changes as per the requirement of the situation. The fact is that, unlike shareholders, management is not putting their own money on the line. If they were, they may make the hard decisions required to give Saga a fighting shot.

Recommendations

It is recommended that there is a need to implement a safety management system (SMS) an integrated set of policies, procedures, and practices that promote safety in all aspects of an organization's operations. It will provide a framework within which people can make decisions based on their best judgment without fear of reprisal or legal action if they fail to follow. Saga Cruises, for example, must improve its environmental performance. On the one hand, the COVID-19 epidemic offers long-term firms the potential to gain a competitive edge through sustainability.

• Saga Cruises has a responsibility to their clients and the environment to minimize their effect after the epidemic so that sailing may continue safely. Switching to green fuels such as hydrogen or ammonia when they become available, rather than climate-damaging choices such as LNG, would significantly cut the industry's carbon impact. Scrubbers are another area that cruises should avoid, or at the very least search for completely closed-loop systems that store scrubber effluent rather than open-loop systems that dump scrubber effluent back into the ocean.
• If Saga Cruises commits to such reporting, as well as ongoing efforts to minimize its carbon impact, the firm will reap immense advantages. This level of dedication and activity is desired by ESG lenders and sustainable investors. Companies who commit to reporting without knowing the proper steps to enhance sustainability performance, on the other hand, maybe accused of corporate greenwashing as ESG investors grow more knowledgeable about ESG integration.

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