The Coral Divers Resort case presents a small resort in the Bahamas faced with a decision about how to expand or differentiate itself to increase awareness and profits. The company is owned and run by Jonathon Graywell, his family, and hired staff. They offer a couple different packages with a few different dives to customers. The problem it is currently facing is the evolution of the market segment it serves and the threat of customer loss due to a lack of differentiation. In finding a more specific identity, Coral Divers must determine how it will make itself stand out from its competitors. The resort could become more family friendly, focus more on adventure diving, or sell and relocate to a better site for diving. Like most decisions or events, context is important so an analysis of the environment that Coral Divers finds itself is essential.
The Scuba diving resort industry presented in this case is rife with evolution and growth as its market develops a demand for family friendly services in addition to the desire for high quality diving experiences. Many of the Coral Divers competitors have adapted to this demand in one way or another by catering to families or by providing more adrenaline pumping, action packed dives such as shark feeding. A five forces analysis of this industry depicts high barriers to entry, especially in regard to the real estate required to establish a resort in the Caribbean. A look at Coral Divers financial statements reveals that 83% of its total assets is tied up in land, buildings, and boats. This, plus the knowledge and certification required to provide scuba diving excursions only adds to the relatively high barriers to entry in this industry. The bargaining power of buyers in this market is relatively high due the niche market that has a desire to vacation at a scuba diving specific resort. The bargaining power of suppliers is also high due to the wide range of customer that purchase boats and scuba equipment--from competing resorts to companies requiring underwater work/maintenance (i.e. oil rigs), etc. Rivalry is high in this industry because of the sheer number of resorts competing for dominance in a niche market--there are 34 scuba diving resorts in the Bahamas alone. Substitutes are high for two reasons: (1) thrill seekers can choose between resorts or, more distantly, do various other things (i.e. sky diving, surfing, or any extreme sporting activity) to get many of the same thrills as in scuba diving. (2) Family oriented customers can choose not only between resorts but also between types of resorts (i.e. Disney World, the Atlantis resort in the Bahamas, etc.). The main challenges that Coral Divers faces is adapting to an evolving demand and figuring out what evolution or combination of such to accommodate in order to distinguish itself.