Ocean Adventures

Executive Summary

Captain Kimo and Sam formed a company called Ocean Adventures who were into the Ocean parasailing business. Ocean adventures were located at the Waianae boat harbour which was on the west shore of the Oahu Island. The harbour on the other hand was owned and maintained by the department of transportation harbour’s division, state of the Hawaii. Ocean adventures and Blue Hawaiian Parasail (BHP) both were assisted by the state government to run their businesses by providing concessions and grants to them. Ocean adventures came into existence in the year 1980 by partners Captain Kimo and Sam, only because of the love and passion they had for the sport and the ocean. In the year 1984, OA was able to buy another second hand boat to cater to the growth in business.
Ocean adventure mainly spread its awareness through the medium of advertisements, in which Captain Kimo liked to advertise himself as the brand ambassador for the business. They also gained noticeable amount of customers by Advertisements in magazines and word of mouth publicity. Being the first ones to start this business, OA were also fortunate enough to do business in a completely monopolistic market for many years. When time came to deal with competition they thought more of the short term solutions rather than preparing themselves for the long term ones. Hence, they had to lower their price and they could not gain enough profits even to cover their operating costs.
The first competitor who came forward and challenged the market share of ocean adventures was a former employee, Lynelle. Lynelle saw the loop holes in OA and saw this as an opportunity. She solely started this company because she was aware that even after giving a big discount to customers a good amount of profit can be made. Lynelle was unable to handle the pressure as OA also responded with equally competitive price.
BHP was formed by Edward who first entered into the market with a different product to offer to the customer. His main aim was to cater to the needs of those customers who were quite experienced and wanted longer and higher sailing rides. This went on for 3 years till Edward established himself and saw a potential market in commercial parasailing. He started offering lower prices to the entire market and started to attract the major market share that was of ocean adventures. Further also they provided attracted commissions to its employees as well. BHP used very aggressive and sometimes unethical tactics to attract customers.
Captain Kimo who was the owner of the ocean adventures on the other hand had an experience of 20 years in the parasailing market and had a transactional leadership style. The company came into existence only because captain had a passion about parasailing and also had attained a thorough and deep understanding and knowledge about the market demands. The other hand one thing that annoyed captain Kimo was that his competitor was using illicit and unethical business tactics to steal the customers of ocean adventures.
Therefore ocean adventure also extended a hand of friendship towards BHP so that both the businesses could work together hand in hand with mutual benefits; however this was again an unsuccessful attempt due to lack of trust. Ocean adventure also launch its own company called the Ocean Sail Hawaii, which would offer a brand image at lower prices, in order to cope with the price fluctuations that BHP was causing. This could have worked if they planned it well.
Example: Qantas airlines, Australia was suffering from all the competition by other no frill airlines. Qantas couldn’t afford to reduce prices to that of no frill airlines as they would then suffer losses. Hence, they setup Jetstar to compete with other smaller airlines.
In the case of Ocean Adventures this failed because they used the same boats and the same staff. And hence this move may look misleading to customers.