Carnival Cruise Line - A MGMT 7160 Blog by Joshua Dixon Williams

     Chapter 14 is a difficult chapter to discuss when discussing Carnival Cruise Line. Carnival Cruise Line has never merged or acquired any other company. However, Carnival Corporation has. When Carnival started in 1972, Ted Arison used a ship from the American International Travel Service and became a subsidiary of that group. However, in 1974, Ted Arison paid $1 million dollars to become a sole company and the other $5 million he owed AITS for its debt. Carnival continued to expand its own fleet until 1987.      In 1987, Carnival purchased Holland America and Westours Cruise Lines. In 1992, Carnival acquired 20% of Seabourn cruises, and then bought the rest by 1999, becoming four companies under one umbrella. In 1993, Carnival turned from Carnival Cruise Line to Carnival Corporation. From 1992 to 2003, Carnival acquired all other brands through multiple years of buying majority stock then all stock. In 2003, with 10 total brands underneath the umbrella, they went public in stock.

      Carnival's strategic alliances are interesting because the only reason I have insight to them is due to my alliance with them at a nonprofit. I will discuss the two types of alliances I know of with Carnival Cruise Line. The first is one that both makes money for two parties as well as lifts brand value. Carnival pairs with many different brands to bring more excitement, food, and more to its cruisers. All of these are licensing agreements. Carnival partners with companies such as Guy's Burger Bar, Seuss Enterprises, IMAX, SkyZone, and more on its ships. Guy Fieri allows Carnival to use his names and his food products to feed consumers on ALL of their ships. Seuss allows Carnival to bring the Grinch, Dr. Seuss, Thing 1 and Thing 2, and other characters on board to host breakfast meals, shows, and other fun things for cruisers.Carnival now pairs with IMAX and SkyZone to bring those entertainment experiences to certain ships that are newly released. Overall, Carnival pairs

     Continuing off of my Chapter 11 blog, I wanted to take the idea of organizational structure from Chapter 12 to discuss Carnival Cruise Line. Obviously, this will be looking at Carnival Corporation, the umbrella parent company that consists of Carnival Cruise Line and 9 other brands. This structure is how Carnival Cruise Line operates efficiently as well as how Carnival Corporation has been able to diversify its products, experiences, and revenue in the industry.      Carnival has an expanded M-structure for their leadership of Carnival Corporation. It obviously starts with the Board of Directors. Micky Arison, founder, is Chairman of the Board. The rest of the board consists of former NBA executives, former Naval Officers and Knights, current president of Carnival Cruise Line, and other major executives of companies. This board is responsible for the decision making of the entire umbrella of brands. One of the unique things about this board is the variety of industries each perso

     Carnival Cruise Line and business diversification is difficult to speak about as Carnival has such a wide-array of options but truly hold a majority of their revenue in one aspect, travel. Carnival's travel sales could be seen as a dominant business within a limited diversification portfolio due to the way their business works. Cruising is paid for all up front. It can cost anywhere from $250-$1000 to cruise, and you must pay that in one lump some. While you can have add-ons such as drink packages or excursions, a majority is covered in that one lump sum cost, including food, non-alcoholic beverages, experiences on-board, and so much more. Therefore, 70-95% of Carnival's revenue comes from shipboard sales. The other remaining amount comes from offshore experiences at ports and excursions. However, a majority of people stay on ship when landing at port due to finances.     Where we can talk about diversification strategies with Carnival Cruise Line is the strategy Mickey A

     Carnival Cruise Line sits within the ideal spot for cruise companies in terms of the priorities and operations they own versus the ones they outsource. When looking at forward vertical and backwards integration, Carnival has done a great job diversifying its operations to maximize the profits. When looking at backwards vertical integration, we can see where Carnival Cruise Line has gone back into their supply chain to take up more of the operations. The perfect overall example starts with how they were founded. Carnival completely owns their ships. Therefore, a majority of their costs that could be saved through backwards vertical integration are handled on the front end. Unlike any other cruise line, Carnival pays for their ships up front, saving them money in the long run. The only way they could continue to integrate in a backward manner is to start building the ships themselves, which is nearly impossible. All ships are manufactured in Italy (for all cruise lines) and have to

    This chapter is a little bit difficult to talk about in terms of Carnival Cruise Line and Cooperation or Collusion because I have no idea if they do either. However, I can speak on the industry attributes that facilitate the development and maintenance of collusion if it were to happen in this industry.      First is the small number of firms in an industry. This is partially true. While there are a large number of cruise lines, there are a small number of main ones everyone takes. These are Carnival, Royal Caribbean, and Norwegian. When looking at product homogeneity, this is true as well. All cruises are similar. The difference usually comes in how exquisite each one is. Carnival is probably the most affordable while Royal is the most expensive and nicest. While the prices different, cost homogeneity is similar as well. All three of the top cruise lines have different prices, but they aren't so different that it makes a huge difference in selection for cruisers.     The n