Carnival Cruise Lines is one of the largest cruise ship lines in the world. Headquartered in Miami, the company operates under the Carnival, Holland America, Cunard, Princess, Seabourn, P&O and Costa brands. The cruise ship industry is highly-competitive, and risks being at overcapacity, but Carnival has been consistently profitable over the years, earning $15.4 billion in revenue and $1.07 billion in net income (MSN Moneycentral, 2014). It is estimated that Carnival is the largest company in the industry, with a share of around 47.7% by passengers, and 41.8% by revenues (CMW, 2014).
Despite this success, there are still several challenges for Carnival. First, the company needs to extent both market share and profitability. The company's share has dipped slightly, and so has the company's profitability (MSN Moneycentral, 2014). This is a function to many large new boats from competitors starting to eat away at Carnival. The market is growing, and there is a though that maybe Carnival is not growing fast enough. Further, there have been several knocks on the brand in recent years. The Carnival Triumph's power failure in the Gulf of Mexico brought a lot of unwanted attention to the company's flagship brand (Rosenbloom, 2013) and the sinking of the Costa Concordia has many cruise enthusiasts wondering if they can trust that brand. Given that Costa is the 3rd-largest brand within Carnival, this is a serious issue that the company's two of the biggest brands have faced public relations nightmares in the past couple of years (Rosenbloom, 2013).
It is reasonable, and...
First, the company lost an entire boat, the Costa Concordia. Second, it is facing tremendous liability in relation to that disaster. Third, the Triumph incident cost the company a lot of money as well. Fourth, there are going to be long-run impacts from the damage that has been done to the brand's reputation.
So the strategy needs to address these specific issues. Carnival has to make some structural adjustments to improve the oversight of its vessels, including how Costa recruits its captains, and how the company overall handles the maintenance function. Rosenbloom (2013) notes that power failures do occur, but are rarely as severe as the one on the Triumph. The customer does not care about that -- the customer is concerned that if they take a Carnival cruise the could be stranded in the middle of the ocean, or get run aground by a drunk captain who then abandons ship.
The company has to repair its reputation, which will involve a marketing and public relations strategy. It has used pricing to keep its passenger numbers up, but it has the worst revenue per passenger figures in the industry, by far (CMW, 2014). As a short-term fix to produce contribution to fixed costs, discounts are okay, but with a better reputation the company would not need to discount heavily or so frequently. So improving the company's reputation is an essential component to getting profits and revenues back on track.
Carnival should consider what to do about Costa. Clearly, this is a company that is poorly run, and damaging Costa's reputation. As a result, it may be better to divest Costa. However, Costa has a primarily European customer base, which differentiates it from other Carnival offerings. In addition, selling Costa now would be selling low. Thus, there is a case to be made that Carnival should simply get some new…
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
Carnival Cruise Lines What threats exist for the future performance of the cruise-line industry and, specifically, of Carnival Cruise Lines? If you were in charge of Carnival, how would you (a) try to prevent these threats from becoming reality, and (b) deal with them if they were realized? There are numerous threats imaginable that could potentially affect Carnival Cruise Lines in the future; everything from the swine flu, to greater regulation of
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
Competitive Strategies and Government Policies Carnival Cruise Line: Carnival Cruise Line is a British-American cruise line headquartered in Florida, United States. It is one of the top ten cruise lines owned by Carnival Corporation & plc -- the largest operator of cruise ships in the world. Carnival Cruise line has the largest fleet size of 24 ships among all other subsidiaries of the Carnival Corporation. These ships provide deep sea cruising as
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(Ibid; paraphrased) on a more positive note, according to one report: "Cruise ships have become one of the many options for corporate meeting planners when faced with a decision regarding a destination for meetings and incentives (employee rewards). In the past five years, all major cruise lines have unveiled mega cruise ships to attract a piece of the more than $20 billion corporate meeting and incentives market (Buia, 2001;