...CARNIVAL CORPORATION STRATEGY REPORT GRIFFIN CONSULTING GROUP Benjamin Levin Jennifer Jones Tom Slade Wednesday, April 11, 2012 2 CONTENTS Executive Summary ..................................................................................................................... 4 Company Background ................................................................................................................ 5 History ....................................................................................................................................... 5 Costa Concordia Incident .......................................................................................................... 6 Business Model and Operations Summary .......................................................................... 8 Five Forces Framework ............................................................................................................. 11 Internal Rivalry ...................................................................................................................... 11 Supplier Power ....................................................................................................................... 13 Buyer Power............................................................................................................................ 14 Entry and Exit ....................................................................................................................
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...Carnival Cruise Lines The company founded in 1970s is a market leader in the cruise vacationing category. It comes under Carnival Corporation which has a portfolio of 12 cruise lines and 75 ships. The operations are mainly in North America (where they sailed from 19 home-port cities). The company has its headquarters in Miami and is perceived as “Fun Ships” by the customers. Carnival Corporation has a market share of 51.6 % (North American Cruise Capacity). Carnival Corporation is currently having the best year in its history. Carnival Cruise Lines currently has a fleet of 20 ships and would be adding the 21st ship to the fleet in the next year. They are the leaders in the low-price segment. Cruise Industry Background * Cruise vacationing was the fastest-growing category of the North American leisure-travel industry * Only 16% of the North Americans have ever cruised (huge potential) * 70 Brands serve the North American market since the 1960s but the Top 10 Brands control 95% of the Market share * North America accounts for 74% of cruise passenger capacity while Europe accounts for 23% * Cruise Lines targeting the North America market operates in four segments – contemporary (mass-market), premium, destination (speciality) and luxury. The luxury and destination segments accounts for only about 5% of the market Case The company is looking ahead to opportunities and challenges * There is a branding initiative designed to narrow the gap between Carnival’s...
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...1. Some of the global forces that contributed to the growth of cruise lines are that they took place on the open sea. The possibilities for passengers were endless. It was normal for people to travel by boat for business or as a job, but to travel on a cruise line for vacation on the open sea made the idea of it all exciting and intriguing. Another factor is that the ports that all the cruise lines were embarking from led to a mass market. Another factor that contributed to the growth of the cruise-line industry would be the beginning of Transocean air services. 2. Some national differences cruise lines have run into are safety issues, economic issues, and weather. In 1985, aboard a Mediterranean cruise ship, terrorists apprehended the ship. Before 9/11, cruise lines were installing massive security checks for all passengers. Of course, post 9/11 passengers started canceling bookings and in turn Carnival increased the number of U.S. ports to make passengers feel safer. Carnival also redeploys cruise lines to stay away from areas that might be experiencing political upheaval or crime. During times of recession, trip takers wanted to take short trips and travel to places nearby rather than faraway. But surprisingly enough, during recessions, it was cruise lines ships that kept their passengers and bookings. Why you may ask? This was due to the fact that cruise lines offered all-inclusive packages. Carnival began offering discounts in times of recession. Another factor is weather...
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...Case Title: Carnival Cruise lines, Inc. v. Shute Citation: 499 U.S. 585, 111 S. Ct. 1522 113 L. Ed. 2d 622 (1991) Facts: The plaintiffs, Eulala and Russel Shute, were passengers on a cruise ship operated by the defendant, Carnival Cruise Lines, Inc. Shute purchased passage for a seven day cruise on the Tropicale, through a Washington travel agent and signed a contract, with a forum selection clause mandating that injured parties would sue in Florida, to the exclusion of all other jurisdictions. The plaintiffs boarded the cruise in California which then sailed to Purto Vallarta, Mexico before returning to Los Angeles. While the ship was in international waters, Plaintiff Eulala Shute was injured from slipping on a deck mat. The plaintiff then filed a suit in Washington, in violation of the contract clause. The defendant sought summary judgment based on: 1. The forum selection clause, and 2. A lack of minimum contacts between the defendant and the forum state. The trial court dismissed based solely on the lack of sufficient contacts. The United States Court of Appeals for the Ninth Circuit reversed because the cruise line had reached into Washington via advertising, and held that but for the defendant’s solicitation, there would be no cause of action. The Court of Appeals also held that forum selection clause was void because of unequal bargaining power between the parties, and because it would be an undue hardship for the Shutes to have to go all the way to Florida...
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...With the 2004 winter holiday season in full swing, the management team at Carnival Cruise Lines had much to celebrate. More than 3 million passengers would sail with Carnival this year, an all-time high (Exhibit 1 presents passenger numbers for Carnival and the industry). Before year’s end, Carnival was set to launch the 110,000-ton, 2,974-passenger Carnival Valor, the 20th ship in the fleet (Exhibit 2). When the Carnival Liberty joined the fleet in early 2005, Carnival’s cruise capacity would lead the industry (Exhibit 3 presents cruise capacity by brand). The fortunes of Carnival Corporation and PLC, the parent company of Carnival Cruise Lines, reflected the strength of its most visible brand. Carnival Corporation was having the best year in its history, due in part to a rebound in ticket prices following recent industrywide discounting. The company authorized a $1 billion stock buy- back in the fourth quarter of 2004 and a 20% quarterly dividend increase to $0.15 per share. It would easily beat Wall Street earnings forecasts, despite a still-sluggish North American economy, higher fuel prices, the war in Iraq, and a devastating hurricane season that had disrupted operations in the company’s main Caribbean cruising waters (see Exhibit 4 for Carnival Corporation and PLC financials). Indeed, there was much fun taking place at the Miami-based headquarters of the “Fun Ships.” Nevertheless, a seasoned team of senior managers (Exhibit 5), many of whom had been with the company since...
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...Case Study Title: “Carnival Cruise Lines” Program MSC HTM 544: Strategic Management for Travel and Tourism Business Instructor Name: Professor: Ada Lo Student Name: Zheng Chen Jerry 1 Jerry, (Zheng Chen) 鄭晨 13105284g Table of Content Vision ＆ Mission ＆ Goals ＆ Strategies ....................................... 3 Vision of Carnival ........................................................................................... 3 Mission Statement of Carnival ........................................................................ 3 Strategies being pursued by Carnival .............................................................. 3 Its Long-term Goals ......................................................................................... 3 Congruence of Mission, vision, goals, strategy and business model of Carnival............................................................................................................ 4 An internal factor analysis summary .......................................................... 5 External factor analysis summary ............................................................... 6 Strategic Groups within the Cruise industry ................................................ 7 Facing Issues and Solutions .............................................................................. 8 Issues............................................................................................................
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...CARNIVAL CRUISE LINES Questions on Strategy 1. What strategy has Carnival adopted in the past to build the cruise line into the dominant player in the industry? Was this a wise approach? Carnival cruise lines was the dominant player in the cruise industry over the last 30 years because of a strong and highly visible brand, a tight control over costs and a clear vision about the industry. Carnival’s corporate strategy was to see them as a vacation business, not a cruise business putting them in direct competition with other vacation companies. The strategy was to convert land vacationers to cruisers. The company saw the huge untapped potential that the North American vacation market offered; only 16% of the country ever cruised. This was a very successful strategy. Carnival’s success and profitability grew, increasing their percentage of market share in the industry each and every year. Carnival managed costs much more aggressively than its competitors. They scrutinized capital purchases and whether there was true value with the asset. Competitors were paying 25-30% to buy a ship per bed more than Carnival. The parent company utilized economies of scale in purchasing. When 9-11 hit, Carnival cruise lines was in position to capitalize on new market segments, operate in new ports (Galveston, TX) and become the new low cost leader. Many of the smaller cruise lines were forced into bankruptcy. This strategy has proven very successful for Carnival. They...
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...Key Points The birth of the modern cruise industry can be dated back to the 1960s. With the Airline industry taking off, shipping companies began to reposition themselves as providers of transportation to that of vacation travel. As the means of travel changed, so did its consumer base. Cruising was dominated by brands that served a more affluent customer base, providing fine dining, formal atmospheres and a high degree of personal service. However this also rapidly transformed the market and brands like Carnival Cruise lines emerged. Carnival cruises is the market leader in the low-price cruise market. They strategically achieved this position by emphasizing on-board activities, and targeting a relatively younger cruiser. However, after acquiring 24 percent of the berth space in North America, it has plateaued in being able to set itself apart from its competitors. The case in question outlines key attributes that assist in determining if it wise that the brand make a lateral shift from their current low-priced market to that of a premium one. This analysis will be assessed by means of a brand strategy, possible marketing initiatives and various concepts discussed in-class. The case goes on to highlight that although Carnival Cruises is a key player in the entry level cruise business, it has room for significant improvement. As more competitors emerge, a “sea of sameness” begins to overtake the minds of potential cruisers. The author investigates the foundations of Carnival’s...
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...To: Edie Bornstein Business Impact Summary: Carnival Corporation is one of the biggest global cruise and vacation companies in the world. The company portfolio of 12 cruise lines and 75 ships, which cover the four marketing segments of North America. It carries 60,000 passengers and they started Carnival “Fun Ships” so that everybody can have fun. It’s designed to include broad range of activities and options for guests. Over past two years the company captured transactional data about its customers but till now they have not taken advantage of it. In order to analyze the data collected, the team used several possible pathways, which include maintaining status quo for analysis of the data. Even though everything looks positive for the cruise lines at present, there is not yet exploited potential in the collection of the customer data. It need to decide weather to continue the conversion of data into information that can be used to create value for customers and if creating a CRM is the apt way for future value and higher profitability. Reccomanadation1:. Carnival Corporation should focus on customer feedback from customer response system, as it is useful to make necessary adjustments to the services and to improve the quality of services to retain the customers. Reccomanadation2: The customer data collected can be used to enhance the customer experience by implementing customized marketing to their customers through analyzing the patterns of purchase and offer special informational...
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...We at the Carnival Cruise Line Corporation are constantly striving for perfection. In order to reach our goals, we have thought about what we need to do in unison with our partners, customers, and employees. With the hiring of our new CEO Arnold Donald, new negotiations have been made in order to increase the level of customer satisfaction. One of the aspects that we currently need to work on is expanding our cruise line to other regions and areas. The negotiation that we will be analyzing is the agreement to bring a vessel back to the port city of Mobile, Alabama (Sharp). CEO Arnold Donald of Carnival Cruise Lines is going to negotiate with Mayo Sandy Stimpson of Mobile, Alabama, in order to grant the Alabamians wish of winning a cruise ship back to their port city. The Carnival Cruise Line “is expected to visit Mobile sometime this month to announce specifics about their plans” (Sharp). However, it is not that simple and will take some time to complete the negotiations with...
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...Carnival Cruise Lines: Exploiting a Sea of Global Opportunity International business 13th ed. Summary: This case describes the history of the cruise industry and defines it, then it talks about the current state of the Cruise industry, then it goes on to discusses the business in international waters, after that it states the main points in Carnival Cruise Line operations, finally it argues the overseas environment. SWOT Analysis: Strengths: 1. Carnival cruise lines is one of three major companies that has the share of 91% of the market and it is the largest of all three. 2. That being said it is very strong financially. 3. The financial strengths of carnival cruise line generates international connections that will be very helpful in this line of business. 4. Another point resulting from the financial strengths is the ability to cover their customers geographically being based in different countries. 5. The ability to target different segments hence it has different cruises with different costs. Threats: 1. The health problem that faced them in 2006 where a virus hit the cruise caused bad publicity which causes carnival to take the infected ship out of service which caused financial losses. 2. Any health epidemics causes carnival to avoid ports of the country infected which also can cause financial losses. 3. The weather causes a major threat which normally forces the company to cancel the trip...
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...Operations, Fifteenth Edition Carnival Cruise Lines: Exploiting a Sea of Global Opportunity. Summary: The case has given us the definition of Cruise, as well as the history of Cruise. Nowadays, there are 2 biggest companies: Carnival and Royal Caribbean nominated the Cruise Industry with total of 72% of the market. By far, Carnival is the bigger than Royal Caribbean. Furthermore, the case goes deeper about the company – Carnival; for example; history, business background and business potential of Carnival. Carnival has done very well In International Water. Company has flags of convenience of about 30 different countries. Legally, Carnival is a Panamanian company, even though it’s listed on the New York Stock Exchange, has operating headquarters in Miami and London, and caters mainly to passengers who set sail from the United States. Moreover, the case also explains how Carnival became so successful: First, ship shopping, Carnival has a huge system in global and is also received a huge advantage of low tax. Secondly, where to find Able- Bodled Seamen, crew members of Carnival hail from 100 countries but mostly they are Filipinos because of fluent English and cheap labor. Thirdly, Casinos and other Amenities, that is because cruises operate outside the jurisdiction of any national authority, they’re not subject to any national laws restricting gambling. In addition, the most activity of shopping in cruise ship is selling arts. However, Carnival has also met some problems in...
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...Carnival Cruise Lines: Increasing Sales Team Efficiency Through Lead Scoring and IVR Table of Contents Introduction 3 SWOT Analysis 4 Lead Scoring 7 Interactive Voice Response 8 Conclusion 9 References 11 Introduction Carnival Corporation & PLC is the world’s largest cruise ship operator, comprised of 100 cruise ships representing 10 cruise lines. The combined companies serve approximately 10 million guests per year, with sailings from ports in North America, Europe and Australia. The largest brand under the Carnival Corporation & PLC umbrella is Carnival. Headquartered in Miami, Florida, U.S.A., CCL operates 24 cruise ships and is responsible for approximately 56% of the company’s annual revenue (Carnival Corporation, 2012). Carnival Cruise Lines (Carnival) is a subsidiary of Carnival Corporation & PLC. As is the case for the cruise industry as a whole, Carnival’s bookings rely heavily upon the work of independent travel agents and agencies. The other major sources of bookings are Carnival’s team of telephone-based Personal Vacation Planners (PVPs), as well as Carnival’s website. Due to the worldwide financial crisis, increased competition within the cruise industry, and the sinking of the Costa Concordia cruise ship in January of 2012, Carnival has faced challenges in maintaining its annual revenue and sales. Since 2008, Carnival has gradually decreased its staff of PVPs, having 500 in 2008 but only 200 today (Garcia). The PVPs had...
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...Carnival Cruise Lines: explotación de un mar de oportunidades globales Debo hacerme de nuevo a la mar, pues el llamado de la marea creciente/es un llamado indómito y claro que no admite rechazo. —John Masefieid, The Seekers En años recientes, el llamado del mar, o por lo menos la perspectiva de relajarse un poco en la cubierta de un barco, es causa de que el negocio de los cruceros se haya convertido en una de las industrias de más rápido crecimiento en el mundo.54 Los viajes por mar, desde luego, han tenido un halo de misterio y seducción durante siglos, pero sólo en las últimas décadas la experiencia del mar abierto y los puertos de escala exóticos se han vuelto accesibles para el mercado masivo. Históricamente, las travesías recreativas por mar han sido una misión esencialmente elitista. Sin duda, miembros de las clases bajas se han encontrado de vez en cuando en mar abierto, pero por lo general como buscadores desplazados de empleo o miembros de tripulaciones de cruceros de lujo y buques cargueros. Sin embargo, en los últimos años la industria de los cruceros ha pasado por un mar de cambios y los grupos demográficos que trata de captar incluyen ahora a la clase media trabajadora, así como a los ricos ociosos. Una encuesta realizada en 2006 indicó que sólo 50 por ciénío~de los pasajeros de ios cruceros perciben ingresos familiares superiores a 75,000 dólares al año, y 46 por ciento de ellos se clasifican en la categoría de entre 40,000 y 75,000 dólares al año. ¿Qué es...
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