Premium Essay

Strategic Management on Cruise

In: Business and Management

Submitted By peggycheang87
Words 10749
Pages 43
MGMT 619
Spring 2009

Carnival Corporation

[pic]

Team 6

Amy Clogher
Jacob Griego
Ted Noble
David Sciortino
Deepa Sethi
Executive Summary

Carnival Corporation is the leading cruise line company in the international cruising industry, with 11 major cruise line brands and is clearly a winning company. It controls almost 50% of the cruise line market and is a broad line provider. The company does not face any considerable challenges within its industry and has adequately responded to all threats. Although 2008 was a challenging year due to the economic crisis, Carnival posted net income for 2008 of $2.3 billion (15.9% of sales). Carnival’s strategy is to be a broad line provider with a wide scope on a large scale. Carnival maintains this strategy by focusing on cost leadership in the contemporary and bargain lines, and then differentiating in the premium and luxury lines of their product mix.

Industry & Competition

The cruise line industry is a moderately attractive, 3-star industry that is characterized by top incumbents capturing a majority of the economic value in the industry, high fixed costs, cost savings achieved from economies of scale, and a high degree of rivalry between the top two industry incumbents. The cruise line industry has reached the growth stage after the inflection point. It is predicted that the growth stage will be longer in the cruise line industry due to frequent product upgrades and niche enhancements that forestall movement into maturity. The cruise industry has developed into a duopoly. While Carnival has 47% of the market, its closest rival is Royal Caribbean with 22% of the market. Norwegian Cruise Lines is a much smaller cruise line that is 50% owned by Star Cruise Lines in Hong Kong and 50% owned by Apollo Management.

Strategy

In addition to Carnival being the market leader in...

Similar Documents

Premium Essay

Carnival Cruise Lines

...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............................................................................................................

Words: 2572 - Pages: 11

Premium Essay

Carnival Cruise Lines

...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. ......

Words: 2319 - Pages: 10

Premium Essay

Carnival Corporation Growth Strategy

...Academic Report on Strategic Management by Diana Romanova 100878 Strategy & Communication EHM3.SC-02 December 10, 2012 Abstract The purpose of the report is to discuss the current strategy of the Carnival Corporation, the world leader in the cruise industry. Based on the external and internal situation analysis the new growth strategy is formulated. The recommendations on the strategy implementation and evaluation are provided by terms of the various strategic theories and models. The projected internationalization strategy may result in the improvement of the financial business situation, by increasing the corporation’s profit margins and shareholder value, and non-financial indicators, for example, brand awareness. Moreover the company can adapt the proposed scenario for entering new markets in the future. 2|Page Table of Contents Abstract ...................................................................................................................................... 2 Introduction ................................................................................................................................ 4 Situation Analysis ...................................................................................................................... 5 Strategic Direction ..................................................................................................................... 6 Formulating a strategy ..............................................

Words: 3764 - Pages: 16

Premium Essay

Project Management

...Memorandum To: Vice President (Instructor) From: Operations SBU Team A Date: Sunday, March 30th, 2014 Subject: Company Strategic Goals and a Project Portfolio Management Process EXECUTIVE SUMMARY: The 2014 Cruise Industry report indicates that the cruise line industry will continue its global presences and with the economy in an ongoing recovery mode, the Oasis Cruise Line & Travel Company is anticipating a positive year of growth and expansion. Our organization, Oasis Cruise Line & Travel Company is fortunate enough to have a viable Strategic Business Unit (SBU) team that can analyze and develop our company’s organizational strategy aimed at generating future business and/or revenue. Our SBU Operations team supports the company’s key business objectives in the Project Portfolio Evaluation and Selection process by conducting the following: * Clarifying the various projects and missions of the company * Defining the best business approach for each project * Surveying the landscape and the environment for future growth and development * An internal and external appraisal of the projects * Setting the corporate objectives with each project * Assisting in the formulation of the corporate strategy * Finally, monitoring the project strategy for corporate success In order for our company to stay competitive and be successful we must embrace the PPM business practices that can generate more value with our project selection to make better,......

Words: 1918 - Pages: 8

Premium Essay

Strategic Business Units

...of a senior manager in charge of one of your company’s Strategic Business Units (SBU). Your first task in this new position is to develop a project portfolio management process and then use this process to select projects for your SBUs portfolio. The Case Study will involve the application of the tools and techniques of multi-project/program management and will deal with the analysis and establishment of project management systems based on the structure of the project. The expected outputs from this Case Study will be in the form of a two part written report due week five. Background The senior management of your company has already made the strategic decisions to allocate annual funding to each of the Strategic Business Units (SBU) within the company. You have been hired to manage one of the companies SBUs. Your new company is a mid cap company with revenues of approximately $350 million dollars a year. This company, like many others, is struggling in today’s economy. It realizes in order to survive it needs to both expand and control costs at the same time. You are new to this industry. This company’s vision is to become the “go to” support or the “provider of choice” for the cruise ship industry throughout the world. This company currently is in the travel and hotel support industry. As such, you supply support services to the travel and hotel industry such as linen services to cruise ships and major hotel chains in the Southeastern......

Words: 2232 - Pages: 9

Free Essay

Royal Caribbean Strategic Analysis

...| | | | | | | | | | | | | | | | | | | | | ...

Words: 10860 - Pages: 44

Premium Essay

Strategic Plan Part Ii

...Strategic Plan Part II: SWOTT Analysis University of Phoenix Adventure Cruises is a small ship company that specializes in active and luxury adventures that are designed to provide unique experiences and bring you up close and personal with destinations. With two upscale yachts that hold 35 guests each, cruising with Adventure Cruises is a truly intimate experience. The experience is active and full of adventure, yet in relaxed luxury. Destinations include the Mediterranean, Northern Europe, Tahiti and South America. The small yachts will bring customers to some of the most desirable destinations around the world, including big cities and hidden gems. And internal and external SWOTT analysis will be conducted to determine the factors that have an impact on the success of the company. SWOTT is an acronym for strength, weakness, opportunities, threat, and critical threat. The analysis is used to evaluate and then improve a company’s current situation. Internal features are examined to see the different strengths and weaknesses, and opportunities and threats are examined to reveal external factors facing the business. Once the analysis is complete, it will help Adventure Cruises determine what they can do to stay competitive and successful in the industry. The SWOTT Analysis involves Adventure Cruises answering numerous questions regarding their strengths and weaknesses as well as any threats and trends of the company. There will be assessments of......

Words: 1810 - Pages: 8

Premium Essay

Topic: Performance Management

...© 2013 The Society of Management Accountants of Canada. All rights reserved. ®/™ Registered Trade-Marks/Trade-Marks are owned by The Society of Management Accountants of Canada. No part of this document may be reproduced in any form without the permission of the copyright holder. MODULE 1, ASSIGNMENT 1 August 30, 2013 Topic: Performance Management Overview Welcome to Module 1. If you have not already done so, read the Program Manual located in the Reference Material section of the CMA Canada Professional Programs website. It provides you with important introductory information about the program. In Module 1 of the program, candidates are exposed to many functional competencies from the CMA Competency Map that involve decision making regarding performance management, performance measurement, risk management and governance, and financial reporting. For assistance when doing their assignments in these areas, candidates are expected to draw on many of their intermediate and advanced management and financial accounting concepts they learned in their university courses and/or in the Accelerated Program. For instance, in this assignment, one of the concepts involves Cost-Volume-Profit (CVP) analysis. In these types of analysis, candidates may be asked to look at how profits and costs change with a change in volume, or a change in such factors as variable costs, fixed costs, selling prices, and mix of products sold. By studying the relationships of costs, sales......

Words: 6968 - Pages: 28

Premium Essay

Strategic Management of Carnival Corporation and Plc

...Advertising and Promotion Management Commons, Business Administration, Management, and Operations Commons, Food and Beverage Management Commons, Human Resources Management Commons, International Business Commons, Marketing Commons, Other Business Commons, and the Tourism and Travel Commons Repository Citation Zhou, Ye, "Carnival Corporation & plc" (2010). MBA Student Scholarship. Paper 4. http://scholarsarchive.jwu.edu/mba_student/4 This Research Paper is brought to you for free and open access by the The Alan Shawn Feinstein Graduate School at ScholarsArchive@JWU. It has been accepted for inclusion in MBA Student Scholarship by an authorized administrator of ScholarsArchive@JWU. For more information, please contact egearing@jwu.edu[->0]. Johnson & Wales UniversIty Providence, Rhode Island Graduate School Carnival Corporation & pic A paper Submitted in Partial Fulfillment Of the Requirements for the MBA Degree Course: HOSP 6800 Ye Zhou Date 8 November, 2010 EXECUTIVE SUMMARY Corporation & pIc is a global|company and one of the|vacation| companies in the world. 1ms paper rp."''';:'''('M the company by analyzing environmental factors, position the competitive strategic history, this evaluates the company's nTP''':p,-" strategies (Carnival Corporation and PLC, 201 Ob). Carnival Corporation & pic is a cruise company whose is......

Words: 423 - Pages: 2

Free Essay

The Case Exam

...August 2013 Case Examination General Comments on Performance Cape Lane Port Authority (CLPA) Case Background and Required Element The August 2013 Case Examination focuses on a Canadian Crown Corporation, Cape Lane Port Authority (CLPA), charged with operating the industrial and commercial port at Cape Lane, British Columbia (BC). In May 2013, senior management met with the Board of Directors at a planning retreat to address declining sales and profit. Management assured the federal government that actions would be taken to avoid a loss for the 2014 fiscal year, and set a 5% net profit margin target to be met, within three years, as a corporate goal. This target was approved by both the Board members and the federal ministers, to whom they report. The following alternatives were identified for consideration: 1. Invest in renovations in order to proceed with the Bitumen Shipping Project. 2. Divest the Cruise Ship Terminal. 3. Operate a Passenger Ferry. Additionally, the following minor alternatives were identified: 1. Allow a local entrepreneur to build a reception centre in the cruise ship terminal and pay a royalty of 8% of revenue to CLPA. 2. Build a fitness facility in order to reduce sick time. As Kyle Wast, CMA, prepare a report for CLPA’s executive team advising them on the opportunities discussed and addressing any other organizational issues and concerns requiring their attention. Include details of your analysis, support for your recommendations, an action plan to...

Words: 4437 - Pages: 18

Premium Essay

Royal Caribbean Accounting Project

...and partly explain the company’s current position and condition?  What is its mission and vision, its strategic objective, source of sustainable competitive advantage? Royal Caribbean Cruise Line was founded in 1969 by Arne Wilhelmsen and Edwin Stephan. Arne and Edwin both thought it would be a great idea to start a cruise line that would provide relaxation and travel to the Caribbean for wealthy men and women that resided in Florida. Royal Caribbean’s first ship was the Song of Norway that launched in 1970 with the ability to carry 700 passengers and included a lounge area to have a drink. Later, in 1971, Royal Caribbean added two more cruise line ships called Nordic Prince and Sun Viking. In 1978 they began renovations on the Song of Norway that added an extra 164 rooms. In the 1980s Royal Caribbean added two more ships called the Song of America and Sovereign of the Seas. Sovereign of the Seas was considered to be the largest cruise liner in the world during that time, because it had the ability to carry over 2200 people and weighed in at 73,000 tons. Royal Caribbean began adding other destinations for passengers to choose from such as: Mexico, Europe, and Alaska. It also was the first cruise line to utilize the ability to book cruises on-line to make it easier and faster to find deals instead of having to call in to a call center. Royal Caribbean added several more new cruise ships named the Monarch of the Seas, Majesty of the Seas, Legend of the Seas, Grandeur of the......

Words: 7814 - Pages: 32

Free Essay

Occupancy Management at Seven Seas

...Seven Seas Cruise Vacations Inc. Occupancy Management1 Pamela Homesworth, Director of Operations – Yield Management for Seven Seas Vacations looked across her desk and let out a sigh. She looked exhausted and not a little bit frustrated as she removed her glasses and started to speak. “It’s Tuesday, the worst management day of my week” she said. “Today is the day I have to decide what to do with our remaining occupancy for a week Saturday to ensure we sail with a full complement of passengers. When I first came into this business, you made your profit from the last twenty percent of travelers, now you try not to lose your shirt to keep the ship at capacity for each sailing. I blame the internet!” Seven Seas Cruise Vacations Pamela Homesworth, then a 31 year old businesswoman, had joined Seven Seas Cruise Lines Inc. directly from an MBA focused on electronic marketing and operations. She began work six years earlier as the internet came to be a strategic force for consumer businesses, starting in 1998. Pamela worked her way into increasingly important roles with the firm and with the start of the fall cruise season had taken over an experiment that Seven Seas was testing on integrated vacation planning and direct sales under the selling brand Seven Seas Cruise Vacation. Using one of their midsize ships, Seven Seas was sailing a dedicated week long circuit from Miami through the western Caribbean and back along the coast of Mexico while testing several new......

Words: 3145 - Pages: 13

Free Essay

Carnival

...strengths, weaknesses, threats and opportunities in the industry this analysis offers a strategic plan in which CCL could continue to grow its international opportunities through the purchase of another cruise line. A leader in entertainment, CCL remains vigilant for the future. Continuing to seek opportunities is one way to maintain leaderaship in this industry. Carnival Corporation and Carnival PLC Carnival Cruise Lines is an American Dream come true. Started by Ted Arison, the company began operation in 1972 with a single secondhand ship, the Mardi Gras, and barely enough fuel for a one way trip from Miami to San Juan. The level of enthusiasm, Arison relied on to get his vision sailing, was barely adequate to start building the company into a full-fledged cruise line; and in two years, Carnival was still struggling. Arison remained focused on his goal and in 1974, he purchased full ownership of Carnival for $1 in cash and he assumed a debt of $5 million. Arison spent the rest of his life investing in Carnival. He finally turned the $1 investment into the most popular and profitable cruise line in the world. With a single ship, which was a converted ocean liner, the Mardi Gras was instrumental in Carnival’s growth. Carnival Corporation & PLC a global cruise company (Carnival Corp.), is one of the largest vacation companies in the world. The corporation includes: Carnival Cruise...

Words: 4884 - Pages: 20

Premium Essay

Mergers and Acquisitions

...consolidation, in which two corporations lose their separate identities and unite to form a completely new corporation (Legal Dictionary, n.d.). Despite concerns about a lessening of competition, U.S. law has left firms relatively free to buy or sell entire companies or specific parts of a company. Mergers and acquisitions often result in a number of social benefits (Ginsburg, 1989). Mergers can bring better management or technical skill to bear on underused assets. They also can produce economies of scale and scope that reduce costs, improve quality, and increase output (Ginsburg, 1989). A merger can enable a business owner to sell the firm to someone who is already familiar with the industry and who would be in a better position to pay the highest price. The prospect of a lucrative sale induces entrepreneurs to form new firms. Many mergers pose few risks to competition (Ginsburg, 1989). Norwegian Cruise Line, a leading global cruise operator, is acquiring Prestige Cruises as of September 2, 2014 (Merced, 2014). Norwegian Cruise Line Holdings agreed to buy the privately held Prestige Cruises International for $3 billion in cash and stock, including the assumption...

Words: 1513 - Pages: 7

Premium Essay

Case Study 2

...Assignment: Due Week 5 This is a two part assignment. Part 1 First, develop project selection criteria and a high level process for applying the criteria and managing the portfolio. The criteria should be consistent with the business environment for the industry, consistent with your company's overall mission/strategies, and consistent with the mission and strategies of your strategic business unit. You are proposing a process, not individual projects. The deliverable for Part 1 is a written proposal for the project selection criteria and a high level description of a proposed portfolio management process. You may also be expected to make an informal presentation of the report in class. The proposal should be in the form of a memorandum to your Vice President (your instructor) outlining your proposal. The memorandum should be no more than 10 pages, including any figures and tables. It should be double-spaced, 10 or 12 point font with one-inch margins. This is a summary for an executive, so be concise, to the point, and leave out the fluff. If you don't need 10 pages to document your proposal fully, I am sure that your Vice President will be happy with less as long as it is complete. Using appropriate grammar, spelling, punctuation, and sentence structure will be part of your grade. The actual proposal should include the following: 1. A description of the proposed portfolio process. You are explaining it to the executives. 2. The reasons it was selected (tie......

Words: 1811 - Pages: 8