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

    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

     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 and the option to shut down and

    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. Carnival also is the leading

     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.      Another aspect that Carnival