Coastal Vacation (see detailed information in Project 1, Question 1) board members are still considering whether, and how, to expand the cruise line. In preparation for further discussions, you advise them that they should ensure that they understand the value proposition that Coastal Vacation offers its customers, including the strategy that is used to support the proposition. You also emphasize that the value proposition and strategy should result from a clear vision statement and mission statement.

Required:

a) Identify Coastal Vacation's value proposition and explain to the board members how Coastal Vacation satisfies this value proposition. Also clarify why Coastal Vacation would want to change the proposition if the cruise line expands. (6 marks)

b) Describe the strategy that Coastal Vacation is currently using to support its customer value proposition. Justify your answer and explain how this strategy has been implemented thus far by Coastal Vacation. (8 marks)

c) Draft a vision statement and a mission statement for Coastal Vacation. (4 marks)

Case Details:

Coastal Vacation Cruise Line

Henri spent a number of years working for the Department of Fisheries and Oceans, visiting coastal communities up and down Canada's East and West Coasts. He fell in love with the scenery, the marine and coastal wildlife, and the hospitality of the local communities. When Henri was visiting his parents one summer, he heard his parents and their retired friends lamenting that they had to find a new means of vacationing. The group had been frequent cruise vacationers, travelling yearly to the Caribbean, southern United States, or Hawaii. They have not been comfortable booking a cruise recently

because of the volatile U.S. dollar, long air travel, insurance costs, and border

crossings. As one friend noted, "The Alaska cruise out of Vancouver is the last relatively hassle-free option, and it's beautiful, but how many times can you wander around Juno?

And I'm getting tired of the buffet."

Henri saw an opportunity in this group of active and adventurous, but older, travellers. He gathered together three other investors with interests similar to his own, and Coastal Vacation Cruise Line (Coastal Vacation) was born. Henri and the other investors combined the pleasures of cruising with their love of the coastal communities; all of the investors have ties to a coastal region. They set up a small cruise line that operates with boats that hold a maximum of 12 guests and a crew of eight. Each boat has a fullservice kitchen, and meals are gourmet, featuring local ingredients and recipes sourced from communities along the way. Guests can sample rare specialties that do not appear on typical cruise menus. Every evening, there is an entertaining and educational social event that allows guests to learn about the arts and culture of the region to appreciate the communities they visit.

Coastal Vacation prides itself on sustainability and environmental responsibility, and this focus is apparent at every level of the organization. Its boats use the latest safety and environmental systems to ensure that pollutants are not released into the water. Rainwater collection, solar power, and wind power are used to the fullest extent possible, and food is sourced locally, minimizing waste. All of these safeguards are seen as essential, in part because environmental legislation is expected to become increasingly strict over time, particularly based on the political mandate of the various levels of government currently in power. Coastal Vacation operates in some coastal

areas that are considered highly environmentally sensitive because of the endangered and threatened species living there.

Coastal Vacation extends its focus on sustainability to partner communities as well. Where possible, staff are hired locally from these communities. An important goal is for the visited communities to benefit from the visits. These benefits are important to the coastal communities. For example, the Eastern Seaboard is home to 40,000 km of beautiful coastline, but climate change and shifting weather patterns cause issues for air, water, and wildlife. The intensity, frequency, and duration of North Atlantic hurricanes, as well as the frequency of the strongest (Category 4 and 5) hurricanes, have all increased since the 1980s. Furthermore, the Atlantic region has been suffering from the closure of fisheries, the lack of economic growth, high unemployment, and an aging population.

The communities enjoy sharing their heritage and showcasing their traditions, while also gaining an opportunity for tourism, which is rare because no other organized tours visit so many of the communities. In addition, the cruise boats even act as emergency delivery services Coastal Vacation previously brought medical supplies to a community that faced a sudden shortage.

Coastal Vacation is now into its fifth year of operation, with an active fleet of four cruise boats. After the start-up phase, the popularity of the cruises grew steadily, and the company is now providing a reasonable and steady return. Guests from past cruises rave about their experiences in small fishing villages, the hospitality of the northern Indigenous peoples, and the scenery and wildlife spotted along the way. The small boat size, the unique experiences that few others have had, and the remoteness of the locations are some of the features most often commented on. Henri often says that guests want a memorable and meaningful experience not just cheap entertainment.

Many guests return several times, and new guests often choose Coastal Vacation because of positive online reviews and word-of-mouth referrals from previous guests.

The board of directors of Coastal Vacation consists of Henri and the three other investors, all of whom are active and knowledgeable with respect to the business's operations. On the rare occasion that a cruise has an empty spot, one of the board members fills the vacancy and uses the opportunity to strengthen partnerships with the communities and to ensure that the quality of service on board meets Coastal Vacation's high standards.

The board is considering approaching additional investors and growing the business, with the idea of the cruise line's doubling its active operating fleet to eight boats in the next two years. Current research indicates that demand would be sufficient to keep the boats operating at near capacity, especially if the target market were broadened beyond the current focus on retirees. Coastal Vacation has hired you to help explore the idea of expanding the business. In your first discussion with Henri, you advised him of the importance of identifying the stakeholders of the business and understanding their needs.