Porters Forces Cruise Industry

A. Pause Strategy (CI#1, 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.

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 Corporation & plc is a global contender with the title of the world’s largest cruise and leisure travel company. The goal of this assessment is to analyze the strengths and weaknesses with the financial ratio analysis of the company along with conducting an internal factor evaluation matrix to view the status of the company in comparison with their top competitor, Royal Caribbean Cruises Ltd.

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

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

Carnival Corporation & plc. is a global company with over 100,000 employees that serve 5 million passengers a year. At the end of 2014 Carnival Corporation & plc. income earnings were $15,884,000 dollars. Tickets sales at $11,889,000 dollars. After paying salaries and other fees Carnival Corporation & plc. income came to $459,000 which is low considering that in 2012 and 2013 income was over $1,070,000 dollars for each year after deducting costs. (Financial Information) The total sales come for the different age demographics, so approximately 50 percent of the predictions for cruise come from the 25-39 age group followed by the 40-59 age group at about 39 percent and the 60 plus age group at 11 percent. (Cruise Demographics)

The cruise industry provides an increase of tourism industry within the ports and its country. For example, restaurants, hotels, taxis, theme parks, museums, shops, taxi drivers and travel guides are all positively affected as it will increase local employment within the city and its ports. Anyhow, cruise industry will brings large sums of revenues to the local city and governments. That is why, I think this enhances the relationship with cruise companies and Politicians will be efficient both sides.

Over the years the cruise industry has seen remarkable growths across the country. Several different ports have seen an increase in ships, which increases the amount of passengers have grown. When ships, and passengers increase it can only benefit the cruise industry in a whole. Means more profits, jobs, and the economy will thrive.

I don’t go on a cruise for cruising sake. I don't particularly care about the accommodation on the ship, the show, and the food - the buffet and the supposedly chef's signature dishes prepared for hundreds and hundreds of passengers. I go on a cruise to visit incredible destinations that are not easily accessible by land like Tasmania and Milford Sound or relatively untouched places like Antarctica. I went on a cruise to New Zealand and South America before to see these places, but unfortunately, Mother Nature struck her fury that our ship had to skip the ports of call, so we were not able to reach the places that were on top of my list of destinations.

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

There are large barriers of entry into the cruise businesses. Ships are extremely costly and time consuming to build.

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.

A few international differences affect the operations of cruise lines. Differences include political/legal, geographic, economic, or sociocultural. Since cruise lines are an international business, they are affected by these differences. Many cruise lines choose to flag their vessels in countries that have “lower taxes and less stringent employment practices required by the laws of those countries” (The Cruise). However, some governments may choose to subsidize the ship industry in order to secure contracts for their domestic firms. Many ships are built in order to be appealing to the eye, but with cruise ships going to so many different places, they have to be designed not only to accommodate the economic reality of the mass market, but also the cultural preferences of the clientele.

The final uncontrollable force affecting the cruise line industry is competition (Montalvo, 2007). This is probably the least influential force since 91% of the cruise line industry is made up of three companies-Carnival, Royal Caribbean, and Star. These three organizations are world-famous and have developed the cruise concept to the point that there is a cruise that will fit just about every person’s destination dream and budget reality.

Carnival has a strong market expansion strategy for selling the mass-market cruise category and first-time cruisers. Furthermore, Carnival Cruise Lines are successful because they have a clear vision and a commitment to their brand essence,