CCL Cost Leadership
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 holds through the diseconomies of scale is Distance to Market and Suppliers. Nice ports cost a lot of money. While it may be called a port of a certain city, those ports are usually owned by the cruise companies. Therefore, when Carnival lands their ship in Cozumel, they also are steering guests to experiences, restaurants, and bars that they own. Not only is the distance a huge issue for companies if they are trying to enter the industry, but they also don't have the funds/government connections to be able to establish ports.
The last thing I notice with Cost Leadership is the technological advantages that Carnival Cruise Line has brought forth. Carnival is constantly trying to find new ways to beat competitors through technology. Carnival uses technology to create a year-round experience. Their app allows cruisers to access the outside world while on-ship. When they aren't on the ship, the app keeps cruisers in touch with Carnival, sending them pictures, updates, and deals. Carnival will also be unveiling a new technology soon in which a customer will have a band they can wear that allows them to unlock their door and buy anything on ship. This sort of technology will make Carnival a leader with consumers as it creates an ease for cruisers but also more money for Carnival.
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 holds through the diseconomies of scale is Distance to Market and Suppliers. Nice ports cost a lot of money. While it may be called a port of a certain city, those ports are usually owned by the cruise companies. Therefore, when Carnival lands their ship in Cozumel, they also are steering guests to experiences, restaurants, and bars that they own. Not only is the distance a huge issue for companies if they are trying to enter the industry, but they also don't have the funds/government connections to be able to establish ports.
The last thing I notice with Cost Leadership is the technological advantages that Carnival Cruise Line has brought forth. Carnival is constantly trying to find new ways to beat competitors through technology. Carnival uses technology to create a year-round experience. Their app allows cruisers to access the outside world while on-ship. When they aren't on the ship, the app keeps cruisers in touch with Carnival, sending them pictures, updates, and deals. Carnival will also be unveiling a new technology soon in which a customer will have a band they can wear that allows them to unlock their door and buy anything on ship. This sort of technology will make Carnival a leader with consumers as it creates an ease for cruisers but also more money for Carnival.
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