...Carnival Cruise Lines DATE: May 21, 2015 TO: Gerry Cahil Subject: Carnival Splendor I’m writing this memo in correspondence to the events that occurred on the Carnival Splendor, along with issues and their implications with recommendations for action and how to communicate these solutions to all who are affected. On Sunday, November 7, 2010, Carnival Splendor departed from Long Beach, California for a weeklong cruise of the Mexican Riviera, carrying 3,299 guests and 1,167 crew members. At 6:00 am on Monday, November 8, 2010, a fire starting in the aft engine room caused failure to one of six diesel generators. The fire was extinguished within hours by crew members with no injuries to passengers or crew. The intense heat severely damaged the power lines housed in the ceiling of the aft engine room causing the forward engine room to become inoperable. Engineers were unable to restore ship power thus having to use auxiliary generators, resulting in no telecommunication service, refrigerated food, sanitation problems and disabled elevators, amongst other inconveniences. Guests were evacuated to the upper level of the ship and later allowed to return to their cabins. Food and drinks were provided to guests until they arrived back in San Diego the morning of Thursday, November 11, 2010 (O’Rourke, 2013, p. 140). The major issue at hand is the actual fire that started in the engine room. The fire disabled all power generation onboard although the ship was designed to ensure...
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...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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...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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...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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...April 13, 2014 Carnival Cruise Lines 3655 NW 87th Avenue Miami, FL 33178 Dear Carnival Cruise Lines Guest I realize that many of you experienced a hardship upon one of our vessels The Carnival Splendor and I would like to take this opportunity to express our deep regret for the discomfort you encountered. I would also like to take this opportunity to thank many of you who have written me personally to express your support. Our number one concern was to ensure the safety and welfare of our guests and crew and to get them home as soon as possible. Our staff worked tirelessly to take care of you and minimize your discomfort and inconvenience. We also focused on making sure your loved ones stayed up-to-date on the situation through the use of Twitter, Facebook, and our Funville blog. The safety and security of our guests remains of the utmost importance to all of us here at Carnival. I understand many people do not believe our vessels to be safe. This is just not the case. All Carnival officers and crew undergo comprehensive regular safety and emergency training that meets or exceeds all regulatory requirements. Also, Carnival ships undergo an inspection as mandated by the U.S. Coast Guard every 3-6 months which verifies safety processes and procedures. In addition, a third-party organization conducts annual inspections of the ship and our safety processes. As you can see our safety processes are first-rate and a priority for all crew and guests. I believe you...
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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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...Introduction The cruise-line industry has changed drastically over the past several years. What was once thought of as a luxury to most people, is now affordable and convenient. The industry now focuses on targeting the working middle class, as well as the upper class. One cruise-line in particular, Carnival, has mastered the informal cruise for the mass market. Carnival offers numerous cruises that are inexpensive and exciting. Nevertheless, Carnival operates internationally with shipyards and ports all over the world. Being an international business, Carnival is affected by many global forces, both controllable and uncontrollable. In order to maintain the corporation’s success, Carnival must be aware of all global forces while operating internationally. Global Forces There are many forces that can affect a business. These forces can be economic, social, political, or cultural. Either way, these forces affect an industry’s opportunities, choices, perspectives and even social image. In the cruise industry, there are two major factors that contribute to its growth; the change in the competitive environment and the demand for travel. The competitive advantage of cruise lines are brought by the arrival of ocean “airline” services and the increase of flexible incomes the cruise line industry has to offer. The demand for travel also contributes to the growth of the cruise line industry. Today, people are more willing to travel farther and stay longer. Cruise lines responded to...
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...Case 16 Carnival Corporation This case starts out by stating how the cruise line industry, specifically Carnival Corp., had survived the recession and even began to expand shortly after the recovery began. By reducing fuel consumption and expanding into the European market helped project the company through hard times. Since projections looked favorable, as only about 10 percent of Americans had been on a cruise before, the market was open for the taking. Having 98 ships in their current fleet (over 190,000 berths) gives them the ability to hold a large amount of customers. Although cruises didn’t always look as they do today, two events catapulted the experience on the open seas. The first was the TV show, Love Boat which dispelled any myths and the rising of women and disposable income. These two really played a role in kick starting the cruise line empire. A short description of the history is that Ted Arison had bought a vessel and converted it into a cruise liner. It was unsuccessful at first and had a hard time getting the right publicity. Soon enough after three years of losing profits, the ship began making money and they soon began expansion. This was due to the ships being at 100% capacity. By the 1990’s, the company had bought many more ships to add to their fleet, and had made huge leaps in industry. They found troubles through the Gulf war and the 9/11 terrorists attacks, but always seemed to come out on top of the current situation. The operating...
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...Carnival Cruise Crisis Management Carnival Corporation operates as a cruise and vacation company worldwide. Its stock is listed on the New York Stock Exchange. Carnival has a portfolio of the world most widely recognized cruise brands. One of these brands is Carnival Cruise Lines, which is the most popular cruise brand in North America and operates 24 ships designed to foster exceptionally fun and memorable vacation experiences at an outstanding value. In this paper, I focus on a crisis of Carnival Cruise Lines, which happened in 2013, and I will also give an analysis about how Carnival handled the crisis. In addition, I will give my own suggestions to this crisis management. Introduction of the crisis On February 7, 2013, the Triumph, one of Carnival’s ships, left Galveston, Texas, with 3143 passengers and 1086 crew aboard for a cruise, which was supposed to last 4 days. However, on February10, a fire broke out in an engine room on the Carnival Triumph, which was sailing in the Gulf of Mexico. The blaze was extinguished quickly and no one was injured, but propulsion systems were knocked out. Although the ship had two engine rooms, shared cabling between the two was damaged by fire, leaving only emergency backup power available. Triumph floated helplessly until the ship was towed back to Mobile, Alabama on February 15, which means Passengers had spent five uncomfortable days on the Triumph. The last five days for the people on Triumph were suffering because of limited water...
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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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...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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...2, 3): Carnival Corp has been known for health and safety records, a key component in consumer decision-making in the cruise industry. In order to begin improvements, a pause strategy needs to be utilized to allow the company to take a step back from aggressive growth and focus more towards consumer necessities. Many complaints stem from issues like sanitization of rooms, quality of food, and ship malfunctions. Keying in on ship maintenance, restoration, and efficiency will significantly decrease the chance of malfunctions. While implementing more stringent and attentive guidelines towards guest amenities and conditions of food storage/quality to help increase consumer appeal. Pros * Allows focus towards proactive improvement of overall health and safety environment * Opportunity to address customer complaints with effectiveness * Better consumer reports from changes * Proliferation of trust and support from consumers * Reduction of direct costs from efficiency of improvements/upgrades Cons * Overall growth will be put on hold * Hard to estimate overall initial costs of improvements * Costs associated with implementation process * Strategy is temporary; Follow-up plan must be ready B. Marketing Strategy (CI#1, 2): Carnival Corporation & PLC is a global cruise company, consisting of some of the industries most recognized brands. In order to reach the different consumer demographics and utilize their nine different cruise lines...
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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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...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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