Investment Opportunity : A New Type Of Cruise Ships

Summary: The cruise line industry has been experiencing a period of massive expansion over the last decade thus heightening the competitive profile for the industry in terms of market share and competitive rivalry. Now cruise industry is one of the most competitive across all.

Carnival is “The World’s Most Popular Cruise Line” with 24 “Fun Ships” operating voyages ranging from three to 16 days in length to the Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, Canada, New England, Europe, and Bermuda. Carnival’s success is attributed to its marketing program directed towards

Lastly, an alternative that can be taken is to build relationships with various large companies with employees who make an income in the target range and make offers to company executives. This method would not downplay the company image because Cunard would be communicating directly with high-income executives and furthermore will not be making any public sales or advertisements. This method would create new potential customers who are directly in the target market of choice using the method of relationship building. This may also result in additional customer retention. This method can be used for both the four and five star ships. In order to attract the target market of the five star ships, Cunard can make an arrangement with a company to offer a deal with their luxury ships as part of a retirement plan.

Carnival Cruise’s, Disney Cruises and Norwegian was the only other clear competitors to RCL but in terms of subsidiaries Crystal Cruises was the only direct rival in terms of size and scale and position in the industry but in analyzing the demand increase from 1999 to 2001 a 16.7% increase in demand showed that Celebrity cruises had to maintain their position as a luxury brand to continue being a major player in the industry. The demand was strong and the competition was average, as it relates to entries to market the cruise line industry requires multiple stipulations and regulations required thus unless one of the major players mentioned above acquired a smaller cruise line to increase in operations and services Celebrity’s position was relatively strategic and smart. The competitive landscape was relatively small so quality improvement process should be the main focus during this time, they already created the process needed to offer superior service thus tweaks such as management training, career progression programs and increases in standard of performance programs would set Celebrity’s consistent quality assurance position in the industry to better

MasterCraft Boat Company vision statement is to be the world's leading manufacturer of water sports boats in terms of initial quality and market share. Its mission statement is to be committed to improving the boating experience of its customers, by delivering innovations that improves enjoyment on the water, and offering products that promote rapid development of skills, generating memories that last a lifetime. MasterCraft was founded in 1968 and soon became recognized as a major force in the tournament ski boat market. Today Mastercraft employs over 400 people and is the largest producer of inboard ski, wakeboard and luxury performance powerboats in the world. It sells boats in over 30 different countries and has over 130 domestic and international dealers.

(NSY) had been providing parts and services to the Mega-Yacht Industry since receiving their initial seed capital in 2000. The Mega-Yacht industry provided an attractive opportunity for NSY. Although the industry was small by comparison, serving only 10,000 vessels, it generated in excess of $1 billion in economic activity annually, divvied amongst the new build, and maintenance, refit and repair business sectors (Mark & Mitchell, 2003, p. 48). The industry’s supporting cast included captains and crews, owners, management companies, procurement agents, yacht builders and repair entities, brokers, and local husbanding agents. Although unknown to the firm at its inception, consultants in 2002 forecasted the mega-yacht industry would see annual growth of 6%, with the potential for even better numbers in the short-term (Mark & Mitchell, 2003, p. 48).

It is difficult for new cruise lines to enter this market since the level of star-up capital required is extremely high given the average cost of a cruise ship and the

Mark X would be able to retire all of the outstanding short-term loans by the end of 1993. The forecasted balance sheet for the year 1993 shows a cash

Further, Viking is using this brand awareness to launch a new portion of their business, ocean cruising, building a fleet of at least eight ocean cruise ships. Viking is leveraging the strength of its consumer base, following a trend in other segments of the luxury travel business such as Four Seasons and Ritz Carlton, to expand its business. Viking has become the first to offer both luxury ocean and river cruising.

Carnival has 75 ships in its fleet and is continuing to brand the company as the “fun ships”

*Carnival is a profitable company and is now the leader in the contemporary cruise sector. The line has launched a $250 million enhancement program on its eight fantasy-class ships. The enhancement will include installation of a water park on board, an adult-only retreat, tropical-themed mid-ship pool area, and other innovative features. Carnival’s former

There are nine main cruise line, these include Ambassador International, Carnival Corporation, Crystal Cruises, Disney Cruise Lines, Louis Cruises, Regent Seven Seas Cruise Lines, Royal Caribbean Cruises Ltd., Silversea Cruises and Star Cruises (Cruising). The major cruises out of these are Royal Caribbean and Carnival Corporation. These cruises line are known for using their popularity to their advantage by raising their prices at any given time. But on the other hand, all the ships are comparable. All passage can anticipate the equivalent experience on board. In addition Rivalry is at a peek because getting rid of a cruise industry cost more than to just keep into development.

Ocean Carriers Inc. was approached in January of 2001 with a contract proposal for the leasing of one of their ships for a term of 3 years beginning in 2003. Ocean Carriers currently has no ship to accommodate the customer. To commission the construction of a new vessel would take 2 years from start to completion. The average rate in the spot market is $22,000 per day. Ocean Carriers deployed a younger fleet than average carriers and generally earned a 15% premium over the average daily rate placing them in position to capitalize in strong economies. However, the industry is volatile and suseptable to extremes both low and high. Many ship owners sought to sign contracts with time charters in order to shield themselves from the swings

1. Daily spot hire rates are determined according to supply and demand of the shipping capacity. According to the article, the supply of ships available equals the number of ships currently in the fleet plus any new ships added, minus any scrapings and sinking. According to Exhibit 2, there are a limited number of ships older than 24 years which are likely to be scraped. For those ships under the age group from 15 to 19, they will continue to provide supply and are not likely to be scrapped because a lot of them will get into the second hand market. The majority of the fleet is fairly young, and it looks as though an additional 63 vessels are on

Product differentiation is one of the main strategies in order to face some of the risks; however, Royal Caribbean, as well as, Carnival Corporation and Norwegian Cruises are the most visible players in this industry. It is not easy to differentiate with their huge size, economies of scale. The industry is very lucrative, has high profit margins; hence, the level of risk is extremely high as well.