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Coast for Life

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Submitted By Koshka1000
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Pages 4
MEMORANDUM

Date: October 1, 2012
To: Coast4Life Board of Directors
From: Pat Brown, Controller
Subject: Recommendations of Coast4Life alternatives to retain profitability during the economic downturn.

Please find the attached report I have prepared for Coast4Life to analyze its major strategic issues and alternatives. The purpose of this report is to recommend the most effective alternatives for Coast4LIfe to remain being profitable during downturn.

Introduction

Coast4Life (C4L) is a Canadian company offering ocean cruises along the Canadian west coast, which is facing a critical downturn as cruise bookings in 2013 began to drastically decline due to a recent terrorist attack. As a result there is a concern of retained profitability for C4L of minimum after-tax rate of return of 16%. This report will analyze all alternatives for C4L and will recommend the most effective ones to survive the downturn.

Identification of the issues and related alternatives
1) After accident Coastal Native will require extended repairs of $3.6 million before 2013 season, though company’s actual financials for 2012 are fairly healthy to cover uninsured expenses (Appendix 1).
2) C4L should watch its future cash due to after terrorist attack it is expected that cruise bookings worldwide will drop by 50-55% in the next 6 month and 30-35% in 2013 (Appendix 6).
3) C4L would like to expend its market share targeting more profitable passenger groups: passengers between 40-60 yrs. old and repeat customers; decrease it’s costs by outsourcing the hospitality services to unskilled Liberian workers for lower wages.
4) To take advantage of increasing clientele booking on-line C4L is considering to implement web-based booking system to generate more revenue and achieve co’ objective to survive in downturn.

Analyses of Alternatives
Alternative 1: -Divest Fraser dry

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