Introduction
A luxury yacht charter in Dubai in the United Arab Emirates (UAE) offers a good example of a promising web-based business. This report provides a feasible business idea within the holiday industry: a company that will target individuals and families who are planning to go on holiday in Dubai, one of the top tourist destinations in the world. The report is based on extensive market research about using websites and other digital media in the business arena. It includes an analysis of the external environment and industry, customer segmentation and value proposition, business strategy, digital marketing, revenue streams, and website interface design among other topics in an exploration of the possibility of creating a successful yacht charter business in Dubai with the aid of the internet.
External Environment and Industry Analysis (PESTEL and 5 Forces Analysis)
The UAE holds a strong position among the most popular tourist destinations in the world. Especially attractive to visitors in Dubai, the country’s largest and most populous city (Abu-Rahma & Jaleel 2019). While its baroque architecture helps to give Dubai the ambiance of a sophisticated and luxurious city, most of the tourist attractions in Dubai, like in other parts of the UAE, are artificial. Examples include Burj Khalifa (the tallest building in the world at 828 meters), Burj Al Arab (the fifth tallest hotel in the world), the Dubai Mall (the second-largest mall in the world by land area), the Dubai Museum (the oldest existing building in Dubai) and numerous artificial islands known for posh apartment towers, glitzy hotels and upmarket global restaurants (Zaidan 2016). These artificial islands include The World Islands, the Palm Deira, the Palm Jumeirah, and Palm Jebel Ali. Visitors to Dubai enjoy a wide variety of activities, including shopping, hiking, water cruising, and driving in the desert (Khan et al. 2017). Thus, the prospects for a yacht business in that location are promising as tourists will be able to use yachts to travel from the coast of Dubai to the various artificial islands such as the aforementioned World Islands (also referred to as ‘The World’) located about four kilometers off the Dubai coast.
While Dubai appears to present a dream destination for setting up a holiday business, the success of such a company will depend on various factors including the external environment and the holiday industry in general. Therefore, it will be necessary to assess the viability of the opportunity by analyzing external business factors in addition to the industry. In this case, using the PESTEL framework and Porter’s 5 Forces model will aid the process of analysis. The acronym PESTEL stands for the political, economic, social, technological, environmental, and legal factors that affect business. The PESTEL analysis is provided in Appendix 1. A summary of this information reveals the potential for setting up a holiday business in Dubai that focuses on yacht charters. The industry analysis using Porter’s 5 Forces model shown in Appendix 2 indicates that the holiday industry is booming in Dubai and that success is possible provided the business is resilient and can cope with industry changes and stiff competition. With sufficient creativity and capacity for innovation, it will be possible to establish a successful luxury yacht charter in Dubai.
The key takeaways from the PESTEL and Porter’s 5 Forces analysis include the following factors. First, no specific trend is currently affecting the structure of the holiday industry in Dubai. Instead, a variety of influences, including government regulation, competition, technology, and customer needs, are defining the direction the industry is taking. Second, the industry is currently highly profitable and competitive (Allen et al. 2016). High profits can attract a variety of players to the industry, leading to increased competition. Third, although the government controls much of the activity within this industry, independent players have their own space and are not consolidating (Allen et al. 2016). In other words, independent players are carrying out their business activities without necessarily collaborating with others. Fourth, the industry’s services are becoming commoditized, and fifth, several players are currently participating in the market. Examples of yacht charters in Dubai include Easy Yacht and Xclusive Yachts. In addition, many hotels have their yacht charters. Sixth, existing players are offering customers, depending on their budgets, a wide range of services. The greatest strengths of these operations are flexibility and adaptability, while low capacity is their main weakness. Lastly, new players are always seeking to enter the market, facing competition and a high cost of entry as the main barriers.
Customer Segmentation and Value Proposition (Value Proposition Canvas)
Customer segmentation is important, and various tools can be used to achieve this task. One such tool is the value proposition canvas, which facilitates understanding the needs of customers and designing services to satisfy these needs (Hjalager & Madsen 2018). As Appendix 3 shows, the gains for customers when this proposed yacht charter becomes operational include offering clients a good time, high-quality customer service, and value for their money. The pains involved are going to the internet and booking services, making payments, and signing contracts. Customer jobs include managing yachts whenever the watercraft is in their possession. Notably, the proposed yacht charter business will focus on the wealthy customer segment because it appears to be underserved. As Appendix 3 shows, the management and employees will serve as gain creators and pain relievers. Thus, the management and employees will come up with products and services to create value for the customer while simultaneously addressing the latter’s concerns. For example, the website (see Appendix 6) is designed to be easy to maneuver so that customers can book the desired services. Customers will also have the option of calling the company and asking for assistance at any time.
The proposed company will serve people on holiday in Dubai. As the targeted customers vary in their spending frequencies and preference in-service approach, pricing will be used to segment customers, requiring adjustments to be made to accommodate all of them. The company will ensure that enough charter yachts are always available, which is currently not the case in Dubai. Yachts become scarce in the peak season, leaving many customers stranded. Thus, the company will help customers by giving them a reliable option. The proposed solution meets the needs of each customer segment in that it offers customized services on time, making yachts available through online booking. Since only one customer segment is being targeted, the service bundle revolves around the charter of luxury yachts. The company will maintain a website that contains all the information that its customers need, reflecting digital technology designed with practicality and simplicity in mind so that users will find it convenient and fun to use (Cyr et al. 2018). The website will also facilitate the acquisition of more customers because holidaymakers will be able to book their luxury yachts in advance from any part of the world before traveling to Dubai.
Business Strategy (Bowman’s Strategic Clock)
To achieve success, a company must remain focused on its objectives. This includes the necessity to collect data about the market and understand the performance and position of competitors (Linton & Kask 2017). Bowman’s strategic clock offers a useful tool for analyzing a company’s competitive position and determining necessary actions. Comprising an elaboration of Porter’s generic strategies, Bowman’s model is reliable. As shown in Appendix 4, the clock has eight positions, each representing a different strategy. For instance, position one denotes a ‘low price and low added value’ approach, while position eight characterizes ‘the loss of market share’ (see Appendix 4 for more detail). For the proposed business, the chosen strategy is position 5: ‘focused differentiation’, which presents the highest potential for profitability in a highly competitive market. A company seeking success in a competitive market must differentiate itself from the other players, enjoying some degree of monopoly because no product or service in the market matches it exactly. As a strategy, focused differentiation will position the services that the proposed company will offer at the highest price levels because the perceived value will be the primary driver of demand.
Luxury brands operating in other industries (such as the fashion industry) have also adopted this strategy. Therefore, the approach has been tested and approved for use in the luxury industry, including luxury yacht charter operations. Highly targeted segmentation will work well with this strategy and will also ensure that the firm achieves premium prices by way of valid promotion and distribution (Thompson, Strickland & Gamble 2015). Another factor that makes this strategy attractive is that it has the potential to lead to high-profit margins. Notably, the main aim of doing business is to maximize profits, meaning that firms should not hesitate to embrace any promising opportunity to increase profitability. Thus, this approach will be used for the business under consideration. The founder is aware that the strategy works best for a firm whose products or services can maintain a focus for an extended period. In other words, the procedure is not appropriate for products that enter a luxury market for only a brief period. Done successfully, focused differentiation will ensure that the proposed company will be profitable and will continue to maintain a leadership position in the market for a long time.
Digital Marketing
Because the proposed business will rely on the internet, marketing will be done online. The owners will use social media networks like Facebook, Twitter, Instagram, and YouTube to market the company and communicate value to potential customers through regular status updates, video clips, and marketing audios. These messages will enable potential customers to learn about the company, leading them to express an interest in procuring the services (Chaffey & Ellis-Chadwick 2019). The value will also be communicated to potential customers at events, trade shows, and conferences. Since hotels across Dubai have numerous conference facilities, the management of the company will approach hotel management with a request to become a partner in conference events held in the hotels. At such events, attendees will receive brochures that contain information about the company, including its location, website, email address, and phone number. Sponsoring events comprise one method for getting new customers; the subsequent relationship with the customers will be managed digitally for improved efficiency.
Every new customer will have an account that contains the individual’s details. The company will send subtle marketing messages to the client in the form of emails from time to time as a way of maintaining the relationship (Kingsnorth 2019). Traditional marketing will be integrated with digital marketing using these online platforms. Media and digital communication will also be used to differentiate the services that the company offers by employing unique advertising and marketing campaigns. The business will be advertised through social media, events, radio, television, newspaper, and magazines (Marullo et al. 2018). The brand image being developed is that of a luxury product, which explains why extensive marketing is needed. Customers will be acquired through advertising and the provision of focused and differentiated products. In addition, the company website will also use cookies to obtain information about new customers based on their browsing history. Hopefully, existing customers will also refer relatives, friends, and acquaintances to the company, and customers acquired through word of mouth will recommend the company to their friends and relatives as well. Moreover, the company will encourage repeat business by giving special offers and packages to all customers.
Revenue Streams
Unmet and underserved needs include an insufficient supply of yachts. While families on holiday may fail to obtain yachts at times, the proposed business will ensure that this does not happen. The planned value propositions meet the needs of the identified segment by offering timely services.
Revenue will be generated through a service sale, that is, the leasing of yachts on a short-, medium- or long-term basis. The lease terms will depend on the size of the yacht. In particular, since buying and maintaining a yacht is expensive, the proposed company will serve as a middleman between yacht owners and those who want to use the watercraft. Over time, if the business becomes profitable, the company will purchase and maintain its fleet of yachts. The company will also approach yacht owners with a view to convincing them to let the company manage their yachts and ensure that each owner will receive some reasonable monthly income. Acting as a middleman, the company will take 30 percent of the money that a client pays to use the yacht. The yacht owner will receive the remaining 70 percent of the amount paid. If the yacht owner agrees to allow the business to manage his or her assets, the owner will receive a fixed amount of income monthly. The new business will then look for clients and pocket all the money made from leases. While the latter appears to be a more profitable option, the risks involved are high.
Although most of the yachts will be acquired from third parties, none of this information will be disclosed to customers to ensure that no collision occurs between the yacht owner and the customer aiming to eliminate the middleman. Company executives will also agree with the yacht owner regarding the use of the vessel and the disclosing of information. A yacht owner who has surrendered the vessel to the company will receive necessary payments to prevent interference with business operations. Therefore, in the case, an issue arises with the vessel when in the company’s hands, the management reserves the right to inform the owner. Also, it is important to note that the company’s website will be mostly informational in function. Some pages will contain pictures of all available vessels along with pricing so that visitors to the site can understand requirements, ensuring that they can properly plan for their vacations. Given the proposed model, the cost of the business is low. Implementing the idea will require a sum of approximately 10,000 pounds.
Website Interface Design
The website will play an important role in ensuring that potential customers have access to sufficient information (Garett et al. 2016). The website will use warm colors to motivate visitors to go on a vacation. For the wealthy, the stimulation of excitement can trigger the decision to go on a vacation. Therefore, the site must be designed to maximize this aspect of development. Because the website is informational, the interface is simple, as shown in Appendix 5. The website contains four pages, including the home page, the yacht charter page, the destination page, and the contact page. The home page contains a welcoming statement and a business phone number that potential clients can use to get in touch with the company instantly. The website also offers an option that allows visitors to chat directly with company representatives. These instant communication channels ensure that a potential customer gets all the help that he or she needs with an eye to preventing a client from changing his or her mind.
The design of the website interface is influenced by the five quality components of Nielsen’s ‘Usability Goals’, which are learnability, efficiency, memorability, errors, and satisfaction. As attributes of usability, the five components ensure that a website is functional and effective. Krug’s seven factors – useable, useful, desirable, valuable, findable, accessible, and credible – were also taken into consideration while designing the website to ensure it meets these conditions so that potential customers will have an easy time interacting with it. Rayport and Jaworski’s 7C framework was also considered while developing the site. The 7 C’s include context, content, community, customization, communication, connection, and commerce. The consideration of these various issues has increased the effectiveness of the design process because they outline the job that needs to be done and promise to competently guide the design process. A website intended to serve wealthy customers should look extravagant and should be well-designed to appeal to them. If the website does not look expensive, some potential customers will not be interested in checking its content. Once the aesthetics of the site have been considered, the content should also be addressed. Content should be relevant, updated, and simple to understand.
Other Considerations
Other considerations include key partners, resources, and activities. Key partners include luxury hotels in Dubai, the UAE government, and yacht owners. Key resources are yachts, luxury vehicles, and experienced employees while key activities incorporate talking to the tourists and entertaining them for money. The structure of the organization and potential issues in the company are also important in the business. The organization has a simple structure that allows all the founders to have equal rights and access to the company. No hierarchies exist within the firm, which comprises only the management and employees. Some of these additional issues are covered in Appendix 6. It is difficult or impossible to conduct business without looking critically at these fundamental business issues. Key resources will ensure that business operations continue without interruption, while key partners provide the needed support to keep the company afloat. Partners also make doing business easy because they take part in company advertising, reducing the cost of doing business. For example, the company may not have to do extensive marketing if it has many key partners because the partners will market the company indirectly. The planned structure also enhances the company’s chances of getting and keeping new customers.
Conclusion
The use of the internet will make it possible to lease yachts to holiday goers in Dubai. The profit will be shared in a ratio of 70 to 30, where the owner takes 70 percent and the company receives 30 percent. The business will be in the UAE’s Dubai, which is among the most popular tourist destinations worldwide. Doing business in Dubai is easy because, while cut-throat competition exists, customers are dynamic and numerous. In addition, the government actively supports innovative ideas. The company will offer a website that allows customers to book services. Advertising for the company will be done using all available media and platforms, especially those that rely on the internet. Revenues will come from the lease of yachts as the business will target wealthy people vacationing in Dubai.