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

Wrapping up the semester and concluding the book, I wanted to touch base quickly on international strategies of Carnival. While no actual blog assignment was due for International strategies, I thought it was a good idea to talk about Carnival's. Surprisingly, Carnival doesn't have an international strategy to sail from international ports. When all ships begin, they have a test run in Europe. They travel through Spain, England, and so many other stops. Following those months of test runs, they then make a Transatlantic voyage to America. This cruise can take 2-3 weeks, and a lot of older cruisers love to take this trip. Other than that, all Carnival Cruise Line cruises port out of United States ports due to legal regulations.     Yes, Carnival employees come from all around the world, and yes, Carnival cruises in international waters. However, Carnival doesn't have any actually ship under their brand that willingly dock and sail originally outside of US territories. A lot...

     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...

      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 ...

     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 var...

     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 s...

     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...

    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 c...

     I recently got to hear Christine Duffy, the president of Carnival Cruise Line, speak at an event in Memphis, TN. She actually spoke directly on the idea of flexibility at Carnival. She believes that Carnival, while always looking ahead, is quite inflexible when it comes to making quick decisions. While having a new program or new technology on a cruise is something they are always looking at, it often takes a long time to implement their newest ideas. This is due to the fragmented organization of their team. You have two different sides - shoreside and on the ship. You also have upwards of 30-40 teams across those two different sides. Therefore, things take a long time to change the course of the ship. Pun intended.      While Carnival may take a long time to adjust to new practices, they are flexible in the way they bring about new ships and remodel others. When looking at flexibility and actions, Carnival Cruise Line deploys the option to expand an...

    Carnival, along with many other brands, try to differentiate themselves within the industry they reside. Carnival has taken many steps to differentiate their experiences and their products. One of the major differentiation is the Carnival funnel. Everyone can tell which one is a Carnival ship due to the funnel shape on top of the ship. See the image below. Carnival Dream with funnel      Carnival prides itself on the funnel of the ship. No matter where you go, you can tell which is a Carnival ship from far away with the large Y-shaped funnel on top of the ship. This is the main product feature that Carnival tries to exhibit as most cruises hold the same thing. All cruises have restaurants, bars, movies, entertainment, and so much more. While all are a little bit different, they all have similar products. Another way Carnival differentiates its product is the location. Carnival is the cruise line that owns the most ships that do Caribbean voyages. Carni...

     Ted Arison founded Carnival Cruise Line on the idea that everyone should be able to cruise. Prior to Carnival, cruising was seen as something that only the elite could do. He wanted to create an affordable way for everyone to be able to cruise, so he created Carnival Cruise Line. Carnival still holds true to that belief today. Carnival is one of the cheaper cruise lines in the industry, allowing families to cruise all together. While other industry rivals have followed the same template of lowering costs, but Carnival continues to differentiate themselves through cost leadership.      The first aspect Carnival holds in Cost Leadership is volume of specialized machines. Carnival is the only company to own their own vessels. Therefore, they don't have to pay any type of loans or payment plans for their vessels. They also have the opportunity to sell their ships to other companies, providing them a source of income that competitors do not have.   ...

     While Chapter 5 had many interesting lessons in it about analyzing strengths and weaknesses based on the Resource-Based View, there were a couple of things in the Chapter that stood out as pertaining to Carnival Cruise Line. The first was institutional leadership as distinctive competence. It all starts with the top. Christine Duffy, President of Carnival, is the first female to hold the presidency of a cruise company. Since arriving at Carnival in 2015, she has implemented a family feel on the ships. Ships not only exude fun for everyone who works and travels on them, but Carnival has become a culture with an underlying mission of family. The company as a whole now recognizes many employees that serve both behind the scenes and on-board the ship. They think about the small things when it comes to treating every family like they are the only ones on board. Each ship has leaders and management that are fun, heart warming personalities that interact with families throu...

Overall, Carnival Cruise Line is in the travel industry. Their main goal is for travelers to have fun, explore, and choose fun everyday they are on the cruise. However, with the travel industry, there are so many different aspects. You have cruising, flying, driving, hotels, resorts, camping, and so much more. The travel industry has so many different aspects that it is hard to singularly define the kind of industry they have across the board. When looking at the overall industry, travel is a fragmented industry. Therefore, consolidation has worked in the major segments. Cruise companies such as Carnival have purchased many other companies to sit under their umbrella brand of Carnival Corporation. This has allowed them to influence the market as the largest cruising company in the United States. Other segments, such as airlines, have done the same thing. Delta and American have consolidated with many other airlines to be the two premier airlines in the United States. Due to these mov...

     Prior to reading Chapter 3, I naively thought this post would be specifically about environmental threats, meaning issues within the environment. Carnival has a lot, and that is why they try to be focused on sustainability in all that they do (as I discussed in my last post). The oceans, wildlife, and all other areas that Carnival travels to have a lot of eyes focused on them as environmental safety is a major concern for many people today. While I could have a whole post specifically about the environment, I think I will take it in a different direction to discuss threats to Carnival's economical environment, specifically analyzing Carnival using Porter's Five Forces.      When looking at the five forces framework, there is the threat of entry, the threat of rivalry, threat of suppliers, threat of buyers, and threat of substitutes that directly make up the overall aspect of environmental threats. When looking at Carnival Cruise Line, they sit wit...

     Carnival Cruise Line was established in 1972 by Ted Arison. Ted's family were avid travelers, but they discovered that more often than not that cruising was not affordable for large families. Therefore, he started Carnival Cruise Line. His mission was to make cruising available to everyone, something that still holds true today. Carnival is an affordable, family-friendly cruise line leading the industry in fun cruises for entire families. Carnival Cruise Line is now under the umbrella of Carnival Corporation, who has a portfolio of 9 different cruise lines, and is run by chairman Micky Arison, Ted's son. CCL's stock sits at $62.06 on the market, and the company had $17.5 billion in revenue in 2017. One of the most unique things about Carnival is they are the only cruise company to own their own ships. This creates huge value for their ships when they need to either sell ships to other companies or build new ones.      Carnival's competitive advant...

Hello friendly readers - My name is Joshua Dixon Williams, and I have been tasked with creating a blog for my MGMT 7160 class over this semester. As the blog has to pertain to the global strategic management of a certain company, I chose Carnival Cruise Line. My job with ALSAC/St. Jude deals with Carnival often. Another colleague and I work with Carnival daily to fulfill world-wide fundraising campaigns for St. Jude Children's Research Hospital. This includes anything from dance parties on ship called Groove for St. Jude, Build-a-Bear sales that benefit St. Jude, round-up and donate asks at embarkation, and so much more. I look forward to sharing my thoughts, experiences, and learnings with all of you over the next few months. Cheers, Joshua Dixon Williams