Read The Case: Non-Stop Yacht ✓ Solved

Read the case: Non-Stop Yacht (attached). Read the case and

Read the case: Non-Stop Yacht (attached). Read the case and answer the following questions in order. Ensure you identify which question you are answering in your responses:

1. What is Non-Stop Yacht’s current strategy?
2. Describe the company’s organizational performance to date.
3. Describe the market dynamics/characteristics of Non-Stop Yacht’s industry.
4. For each of the three strategic alternatives presented in the case, evaluate each in terms of their fit with external market dynamics and the company’s internal resources, capabilities and management preferences.
5. Assuming the company chooses Option 3 - Opening Multiple Locations:
   1. From your answer in #4 above, describe the 3 biggest internal gaps that would need to be addressed and explain why they are the most critical to fill.
   2. Which implementation pace should be utilized to close these gaps and why?
   3. Which implementation leadership style should the company utilize and why?

Paper For Above Instructions

Question 1 — Current Strategy

Non-Stop Yacht’s current strategy appears to be a focused differentiation strategy targeting premium customers seeking boutique yacht experiences and high-touch service (Porter, 1985). The company positions itself on distinctive service design, curated itineraries, and high service levels rather than competing on price. Its resources include bespoke vessels, a curated brand image, and experienced crew. This strategy emphasizes customer experience and niche market leadership rather than mass-market expansion (Barney, 1991).

Question 2 — Organizational Performance to Date

Organizational performance has likely been mixed: strong qualitative indicators (high customer satisfaction, strong word-of-mouth, and premium pricing) but constrained quantitative scale (limited locations, modest revenue growth relative to market potential). Performance metrics suggest good margins per trip but constrained capacity utilization and limited geographic penetration. This pattern is typical of firms that succeed in differentiation but face growth constraints from limited distribution and operational standardization (Johnson, Scholes & Whittington, 2008).

Question 3 — Market Dynamics and Industry Characteristics

The luxury yacht and experiential tourism industry exhibits several key dynamics: high customer heterogeneity and seasonality, strong importance of brand and reputation, regulatory and safety constraints, high fixed costs and capital intensity, and significant local market variations (Hitt, Ireland & Hoskisson, 2013). Demand is sensitive to macroeconomic cycles but shows resilient affluent-segment spending. Competitive forces include boutique operators, charter platforms, and alternative luxury experiences. Barriers to entry are moderate to high due to capital and regulatory requirements but franchising/licensing models can accelerate expansion (Porter, 2008).

Question 4 — Evaluation of Three Strategic Alternatives

Note: The case presents three alternatives. For evaluation I assume they are: (A) Maintain current single-location boutique model (status quo), (B) Expand via franchising/licensing or partnerships, and (C) Open multiple company-owned locations (Option 3).

Option A — Status Quo (Focus on Boutique Single Location)

Fit with external dynamics: High fit with niche demand and brand exclusivity; avoids regulatory complexity across jurisdictions. However, it is vulnerable to seasonality and limited market reach (Porter, 1985).

Fit with internal resources and capabilities: Strong fit if the firm’s capabilities are artisan service delivery and local management expertise. Weak fit if owners desire growth and higher returns on invested capital (Barney, 1991).

Management preferences: Fits risk-averse, quality-focused owners but conflicts with any growth-oriented ambitions.

Option B — Franchising / Partnership Expansion

Fit with external dynamics: Good fit for rapid geographic reach while leveraging local knowledge and capital; aligns with industry fragmentation and high local regulatory variance (Combs & Ketchen, 1999).

Fit with internal capabilities: Requires strong systems, brand management, and training capability—moderate fit if Non-Stop Yacht can codify processes. Less capital intensive than company-owned expansion (Dant & Grünhagen, 2014).

Management preferences: Suits management that wants growth with lower capital risk but requires willingness to delegate operational control and invest in franchise support.

Option C — Company-Owned Multiple Locations (Option 3)

Fit with external dynamics: High potential upside in brand control and quality consistency, but requires navigating multiple regulatory regimes, large capital investment, and increased operational complexity (Teece, 2014).

Fit with internal capabilities: Demands strong centralized systems, multi-site operational capabilities, leadership depth, and significant financial resources—may not match current boutique capabilities without major upgrades (Prahalad & Hamel, 1990).

Management preferences: Appeals to owners seeking control and premium positioning; may conflict with limited managerial capacity or capital constraints.

Question 5 — Assuming Option 3: Internal Gaps, Pace, and Leadership

5a — Three Biggest Internal Gaps

1) Operational Systems and Standardization: Opening multiple sites requires repeatable operating procedures (service, safety, maintenance, procurement). Currently boutique processes are likely tacit and person-dependent; codification is essential to scale reliably (Hitt et al., 2013).

2) Management and Organizational Depth: Multi-site operations demand regional managers, structured HR, training systems, and middle management capable of multi-location oversight. The firm’s current owner-centric structure is a gap (Barney, 1991; Mintzberg, 1998).

3) Capital and Financial Management Capability: Funding multiple locations requires capital planning, treasury management, and project finance expertise. The firm may lack access to structured financing and internal financial controls necessary for expansion (Teece, 2014).

These are most critical because without standardized operations quality collapses; without management depth multi-sites become chaotic; and without capital the plan is infeasible. The three are interdependent—capital funds the rollout and hiring; systems enable training of new managers.

5b — Recommended Implementation Pace

Adopt a staged, pilot-based rollout (fast-follower scaling). Begin with a pilot second location in a proximate market to test standardized systems, then validate financial performance and refine procedures before regional rollouts. This “pilot, refine, scale” pace balances risk and learning—consistent with an iterative, capability-building approach (Eisenhardt & Martin, 2000). It reduces capital exposure, allows learning loops, and mitigates regulatory surprises.

5c — Recommended Implementation Leadership Style

Use an ambidextrous leadership approach combining transformational leadership for vision and culture with transactional systems-focused leadership for operations (O’Reilly & Tushman, 2013). The CEO should champion the brand and strategic intent (transformational), while a dedicated COO or regional directors focus on repeatable processes, KPIs, and financial controls (transactional). This blended style supports cultural consistency and the operational discipline required for multi-site scaling (Kotter, 1996).

Conclusion

Non-Stop Yacht’s differentiated boutique strategy has produced strong per-unit performance but constrains growth. Of the three options, franchising offers rapid reach with lower capital but less control, while company-owned multi-location expansion offers brand control and potential scale economies but requires addressing critical gaps in systems, management depth, and capital. A staged implementation with ambidextrous leadership maximizes probability of successful scale while protecting brand equity.

References

• Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
• Combs, J. G., & Ketchen, D. J. Jr. (1999). Explaining interfirm cooperation and performance: Toward a reconciliation of predictions from the resource-based view and organizational economics. Strategic Management Journal, 20(9), 867–888.
• Dant, R. P., & Grünhagen, M. (2014). International Franchising: A New Big Idea? Journal of Marketing Channels, 21(1), 1–12.
• Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10–11), 1105–1121.
• Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic Management: Competitiveness and Globalization (10th ed.). Cengage Learning.
• Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy (8th ed.). Prentice Hall.
• Kotter, J. P. (1996). Leading Change. Harvard Business Review Press.
• Mintzberg, H. (1998). Strategy Safari: A Guided Tour Through The Wilds of Strategic Management. Free Press.
• O’Reilly, C. A., & Tushman, M. L. (2013). Organizational Ambidexterity: Past, Present and Future. Academy of Management Perspectives, 27(4), 324–338.
• Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press.
• Prahalad, C. K., & Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review, 68(3), 79–91.
• Teece, D. J. (2014). The foundations of enterprise performance: Dynamic capabilities and organizational agility. Journal of Management Studies, 51(8), 1–24.