Carnival Cruise Line Case Study

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Carnival Cruise Lines It is a strange reality that part of what made Carnival Cruise Lines the spirit of a "Fun Ship" came about because of how their vessel ran aground on its maiden voyage. The company literally used that experience to propel itself forward into a successful business model (442). Now it must live with the reality that when a similar mistake occurred, innocent customers perished. And there is no getting around the fact that this event will challenge every otherwise successful element of its bottom line and reputation and force it, like Wal-Mart did, take another look at the strategies for the future. Only now Carnival has to do so in the beginning of a massive organizational disaster centering on the Costa Concordia (Lazarus, 2012).

But the fact is that mistakes of judgment (whether from a given incident or as a result of a business strategy) happen, and that does not necessarily dome the company to failure. There is ample evidence that consumers like businesses that aggressively go after a mid-level consumer market and often this massive target group a unique promise or service. This is why Terry Thornton took pride in his characterization of Carnival Cruise lines as the Wal-Mart of tourist travel. Sometimes starting a "backwards business revolution" pays off. As Kaufman (2009) said in her article...

...

On the one hand, the mega-retailer is vilified for transforming the nature of international trade and abusing employees. On the other hand, strategists tip their hats to a business model that propelled the retailer from small-town obscurity to commercial super power and attracted even one of the staunchest democrats, Hillary Clinton, to its board."
Carnival got its start in a similar way and has lived through the ups and downs of trying to make its own space in its sector. Under normal environmental variations, even the current challenging one, the company would likely have no problem looking forward to possibilities just as the rest of the cruise line sector of tourist travel is (CLIA, 2010). With the failure of the company to respond well to the Italian disaster, the implications are less easy to identify. But still, the company can still look back on the solid business foundation that it built and trust that, like Wal-Mart, it will be able to move forward.

Carnival has over its history set itself on a specific course designed to attract a market of customers comfortable paying a reasonable price (relatively speaking, about the same as a regular hotel) for at least decent services. In the mind of their…

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Carnival has over its history set itself on a specific course designed to attract a market of customers comfortable paying a reasonable price (relatively speaking, about the same as a regular hotel) for at least decent services. In the mind of their management, there was nothing wrong with having a "beer and pretzel" business (445) as long as one's customers could opt to buy the finer kinds of wines and cheeses during their trip. This was why it pursued aggressive strategies to identify its own brand and then found to stay true to that conceptualization.

The economy and the American mentality at the time of its growth were open to having an option of a cruise that was not just for the wealthy and the exclusive. Carnival focused on what they and others offered on board, but under it all they recognized that people would pay a reasonable price to get to the destination ports because what they could experience there was enough to off-set not getting all the luxuries often though associated with ocean travel (443). The put this strategy forward at the same time that the mass entertainment sector was offering its audience a look inside the Love Boat and the remade Titanic movie where once again the average passenger might well be able to mix with the well-off. Carnival Cruise Lines was good at making its customers feel comfortable with what they bought just as Wal-Mart did when it gave the average small consumer a taste of a one-place affordable option for shopping and sometimes being entertained (Kaufman, 2009).

Unfortunately for Carnival, the emerging accident that they must now face down will exacerbate the realities of the slow economic times (Lazarus, 2012). This would have hit them anyway, and still will (post disaster response) require them to adapt to the fact that their target consumer group is becoming harder to identify. The disappearance of the American middle class and the fact that consumers are able to shop smartly using technology has made it necessary that they look again at how they market and promote what they have to offer. They've been going head to head with their competitors and have been benefiting with the fact that American cruise tourists like the bigger ships, appreciate the relatively affordable room costs, and want to see if the rest of the world is doing better than our nation is (CLIA, 2010). But the targeted middle-class population is still shrinking and in the face of rising fuel costs, high profile environmental and disease incidents and the uncertainty of the global markets, present unique challenges. Wal-Market has openly moved toward including local farm produce and organic groceries and redefining itself as the carrier of these eco-friendly products. Can Carnival do the same when 80% of its people have not yet and may not now


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