1. Should Carnival do “CRM?” Carnival should definitely do CRM. Carnival obtained its identity as the “fun ship” when its maiden voyage ran onto a sandbar: the management team turned the disaster into a enjoyable experience for passengers by opening the bar for them. It was an inspired reaction to a difficult situation—and it helped to earn the cruise line its reputation.

However, having developed over the decades and become a mid-tier line (neither on the cheap nor on the expensive side—though it does offer an experience that competes just as well against any of the luxury brands), Carnival wants to expand its services to the untapped market in North America—i.e., all the people who have never been on a cruise before. To attract those customers and get one-time cruise customers to become repeat customers, CRM is necessary.

CRM is customer relationship management and it is data-dependent. That means it requires some assistance from the IT department in terms of gathering and organizing data on customers. By having all the data collected and accessed in one place, managers can see what guests are interested in, what made their experience good or bad, whether there is validity to their complaints, and whether they are customers that Carnival should go out of its way to attract back. IT and IS are ways to generate value creation by getting to know the customer better. It is that simple.

2. What impact/s can information systems have on the five competitive forces at Carnival?

IS can impact the five competitive forces at Carnival by providing CRM with information about the cruise line’s guests that otherwise would not be available. Since Carnival is the “fun” cruise line, it pays to be able to know what makes the experience fun for its guests. Opening the bar for the stranded passengers on the maiden voyage may have been a fluke accident that helped create the line’s image, but as the years pass management needs a way to be able to get in touch with its passengers once again. Barring a grounding on a sandbar, the Carnival Cruise line must use the tools that are out there to connect with customers. IS allows the cruise line to connect with passengers by generating information about them, collecting their data so that a...

235). Categorizing systems also enable the line to better understand its passengers by projecting models that will show the effect of specific actions towards a specific type of customer and how it will benefit the line. By analyzing the industry, Carnival can see what its competitors are doing so that it can match their output. By analyzing the value chain, Carnival can see how it is effectively creating value for the consumer, and by analyzing its own customer service life cycle, Carnival can see the progression of steps that a customer goes through when considering whether to purchase a ticket on Carnival Cruise. By anticipating that process, the Cruise line can better prepare the right pitch and product for the consumer and attract more business.
3. Give an example of how IS can impact at least one aspect of the value chain at Carnival.

IS could be used to attract vacationers to cruises by gathering data on how people from a specific demographic, region, or consumer group make decisions about where to go for vacation, what to do, what has the best offer, and why they choose that type of vacation. For example, if a mother and father who aged 35 have two children who are ages 2 and 4, they might prefer a vacation where they can have fun with the children—something like Disney World. So how can Carnival attract that family to the cruise? IS can provide the cruise line with a profile of the family, show information on what type of services the family often spends money on (whether or not Mom likes to go to spas, etc., and whether or not Dad likes to go to bars or shows). It can show how the parents spend money on the kids, and what types of fun activities they like to do.

If the findings of all this data reveal that there is a trend about what families like this do with their free time and their extra cash reserved for vacations, Carnival could adapt itself so that it offers these types of activities to the targeted consumer. It could advertise for instance to the female demographic with pictures of spas on the cruise and a relaxing massage that might be…