information technology to enhance the passenger experience.
are four trampolines, which are connected to a combination of bungee cords and VR. Once inside, participants bounce with the aid of the bungee cords, all while exploring VR worlds on the VR headsets they are wearing
Celebrity Cruises. The Celebrity Edge launched on December 16, 2018 and is the first ship designed completely three
dimensionally (3D). The company used virtual reality (VR) 3D simulations, full 3D mock-ups of the design, and 3D screens so that designers could look at every different angle of a particular space—passenger cabins, restaurants, entertainment venues,
offices—to ensure that what they constructed would be appropriate for their guests and crews.
The ship features a mobile app for passengers and crew that includes machine learning so the app can act as an intelligent personal assistant for passengers. The ship also features facial recognition to allow for check-in at ports, wayfinding (finding your way around the ship), and automatically unlocking cabin doors for the cabin’s occupants. Interestingly, automatically unlocking cabin doors required the cruise line to replace all existing door locks, a lengthy and expensive process.
For wayfinding, Celebrity relies on its existing networks as well as sensors on passengers’ phones to accurately map where they are on the ship. By embracing this technology, the cruise line did not have to build any new infrastructure on its ships to accommodate
wayfinding.
Carnival Corporation. Carnival Corporation
(www.carnival.com) deployed a robot named Pepper that greets guests and answers general questions. Dinner menus and photos of guests that roaming photographers take are available for viewing on iPads located throughout Carnival’s ships. The cruise line has also deployed a mobile app to enable passengers to use instant messaging to communicate with one another while onboard.
In November 2017, Carnival debuted its new Medallion wearable device. Each Medallion is connected to a specific guest, and it interacts with 7,000 sensors on each ship. The Medallion works
with the Ocean Compass, a network of 4,000 high-resolution 55- inch screens located throughout each ship. The Ocean Compass incorporates machine learning to analyze passenger behavior and provide personalized recommendations. For example, as a
passenger walks toward his room, sensors detect his approach. By the time he arrives, the lights are on, and the air conditioner is cooling his room to his preferred temperature.
MSC Cruises. MSC Cruises (www.msccruisesusa.com) is launching 11 new cruise ships, with its final ship completed in 2026, and a fleetwide digital innovation strategy called MSC for Me. The 10-year, $10 billion investment program uses technology to improve guest experiences. The first of MSC’s new ships, the MSC Meraviglia, entered service in mid-2017. The ship has 16,000 points of connectivity, 700 digital access points, 358 interactive information screens, and 2,244 cabins with RFID and near-field communications (NFC; see Chapter 8) technology.
With 170 nationalities sailing on MSC ships, the communications challenges are enormous. MSC needs to provide relevant
information based on each guest’s profile, and all digital
communication channels must facilitate the effective delivery of this information.
MSC for Me bracelets use facial recognition to provide guests with 130 smart, personalized features aimed at an optimized cruising experience. These features include an app that helps guests to book their excursions prior to embarkation, make reservations at one of the ship’s restaurants, and experience VR tours of the ship and its spaces, such as rooms and public areas. For travelers, the bracelets serve as a daily activity organizer, providing wayfinding,
facilitating purchases, and allowing passengers to request services from staff. The bracelets come at an additional price for adults but are free for children. Guests who do not choose to purchase a
bracelet can access some of its features on the app alone, such as checking how full restaurants are or booking excursions.
MSC is using VR technology to create immersive virtual shore excursions that guests can try before purchasing the actual
excursion. The cruise line also uses VR that enables guests to see how they look in various items of clothing sold onboard without having to try them on.
In all of the cruise lines’ digital efforts, privacy and security are critical considerations. Therefore, all cruise lines are developing their applications with best practices in mind for guests’ privacy and security.
Sources: Compiled from A. Coulter, “Sky Pad Virtual Reality Trampoline on Royal Caribbean Cruises,” CruiseCritic, June 13, 2018; R. Tribou,
“Revamp of Royal Caribbean Ship to Add Virtual Reality Trampoline,”
Orlando Sentinel, February 8, 2018; R. Cheng, “Royal Caribbean’s High- Tech Ship Lets You Be Lazier Than Ever,” CNET, November 10, 2017; “New Technology for Cruise Lines,” CruiseExperts.com, April 3, 2017; T.
Maddox, “Royal Caribbean Steps Up the High-Tech Battle on the High Seas,” TechRepublic, March 15, 2017; C. Herrera, “MSC’s Smart Wristbands and New Technology Coming to the Line’s Miami Cruise Ships,” Miami Herald, March 13, 2017; C. Saran, “MSC Cruises Goes Digital,” Computer Weekly, March 10, 2017; “MSC Cruises Launches New Digital Guest
Experience Program, MSC for Me,” Seatrade Cruise News, March 8, 2017;
K. Collins, “These Cruise Ships Will Deck You Out in Wearable Tech,”
CNET, March 8, 2017; B. Barrett, “Carnival’s High-Tech Cruise Wearable Knows Your Every Need,” Wired, January 5, 2017; M. McFarland,
“Carnival’s New Wearable Rethinks the Cruise Ship Vacation,” CNN, January 4, 2017; E. Silverstein, “Robot Bartender at the Bionic Bar on Royal Caribbean Cruises,” Cruise Critic, December 7, 2016;
www.royalcaribbean.com, www.carnival.com, and www.msccruisesusa.com, all accessed July 25, 2018.
Questions
1. Are the information technologies mentioned in this case strategic systems for the cruise lines? Why or why not?
Support your answer.
2. What are the privacy implications of the interactive bracelets from all three cruise lines? (Hint: Look ahead to Chapter 3.) 3. Is it possible that VR applications could actually detract from
the cruising experience? Why or why not? Provide examples to support your answer.
Make-to-Order and Mass Customization.
Make-to-order is a strategy of producing customized (made to
individual specifications) products and services. The business problem is how to manufacture customized goods efficiently and at a
reasonably low cost. Part of the solution is to change manufacturing processes from mass production to mass customization. In mass
production, a company produces a large quantity of identical items. An early example of mass production was Henry Ford’s Model T, for
which buyers could pick any color they wanted—as long as it was black.
Ford’s policy of offering a single product for all of its customers
eventually gave way to consumer segmentation, in which companies provide standard specifications for different consumer groups, or segments. Clothes manufacturers, for example, design their products in different sizes and colors to appeal to different customers. The next step was configured mass customization, in which companies offer features that allow each shopper to customize his or her product or service with a range of components. Examples are ordering a car, a computer, or a smartphone, for which the customer can specify which features he or she wants.
In the current strategy, known as mass customization, a company produces a large quantity of items, but it customizes them to match the needs and preferences of individual customers. Mass
customization is essentially an attempt to perform make-to-order on a large scale. Examples are the following:
NikeID (www.nikeid.com) allows customers to design their footwear.
M&M candies: My M&Ms (www.mymms.com) allows customers to add photos, art, and messages to candy.
Dell (www.dell.com) and HP (www.hp.com) allow customers to exactly specify the computer they want.
E-Business and E-Commerce.
Conducting business electronically is an essential strategy for
companies that are competing in today’s business environment.
Electronic commerce (EC or e-commerce) describes the process of buying, selling, transferring, or exchanging products, services, or information through computer networks, including the Internet. E- business is a somewhat broader concept. In addition to the buying and selling of goods and services, e-business also refers to servicing
customers, collaborating with business partners, and performing electronic transactions within an organization. Chapter 7 focuses
extensively on this topic. In addition, e-commerce applications appear throughout the text.
You now have a general overview of the pressures that affect
companies in today’s business environment and the responses that these companies choose to manage these pressures. To plan for the most effective responses, companies formulate strategies. In the new digital economy, these strategies rely heavily on information
technology, especially strategic information systems. You examine these topics in the next section.
Before you go on …
1. What are the characteristics of the modern business environment?
2. Discuss some of the pressures that characterize the modern global business environment.
3. Identify some of the organizational responses to these
pressures. Are any of these responses specific to a particular pressure? If so, then which ones?
2.4 Competitive Advantage and Strategic Information Systems
A competitive strategy is a statement that identifies a business’s approach to compete, its goals, and the plans and policies that will be required to carry out those goals.1 A strategy, in general, can apply to a
desired outcome, such as gaining market share. A competitive strategy focuses on achieving a desired outcome when competitors want to prevent you from reaching your goal. Therefore, when you create a competitive strategy, you must plan your own moves, but you must also anticipate and counter your competitors’ moves.
Author Lecture Videos are available exclusively in WileyPLUS.
Apply the Concept activities are available in the Appendix and in WileyPLUS.
Through its competitive strategy, an organization seeks a competitive advantage in an industry; that is, it seeks to outperform its
competitors in a critical measure such as cost, quality, and time-to- market. Competitive advantage helps a company function profitably with a market and generate higher-than-average profits.
Competitive advantage is increasingly important in today’s business environment, as you will note throughout the text. In general, the core business of companies has remained the same; that is, information technologies simply offer tools that can enhance an organization’s success through its traditional sources of competitive advantage, such as low cost, excellent customer service, and superior supply chain management. Strategic information systems (SISs) provide a competitive advantage by helping an organization to implement its strategic goals and improve its performance and productivity. Any information system that helps an organization either achieve a
competitive advantage or reduce a competitive disadvantage qualifies as a strategic information system.