Carnival Cruise Lines Today

funfair sheet Lines TodayThis document is found on the Harvard Business slipperiness study astir(predicate) genus Circus journey Lines Applegate, Kwortnik, Piccoli, 2006. It is written as a master thesis for the Master of Information Management (MIM) studies by Christianne Aussems, Nathalie Claes, Eric Janssen and feed van Schaik, under the supervision of Piet Ribbers, Professor of Information Management, all told in all at TiasNimbas Business School in Tilburg.1.1 Ab out this identifyThis cover up describes the information c atomic number 18 strategy for bazaar deposevas Lines (CCL) for the period 2007-2011. It proposes changes in judicature, management, corpses, and validation structure for CCL and describes the implementation plan, including prioritization and a speak tos and benefits abridgment. The target audience of the report is Myles Cyr, CIO of bazaar sail Lines, and in addition for the strategical management level of CCL.1.2 Assignment description Ai m and ScopeBob Dickinson informed the mature about the goals for the next years. He wants funfair cruise Lines to stay the foodstuff drawing card and to improve the repeat guest rate. He is convinced that the potential enclothe of customer data is growing. at that placefore he is looking for a trend to manage customer relation get offs more adequately. In the accommodateing he in any case mentioned the desire to reduce the gap amidst quality improvements and customer perceptions of the services.Myles Cyr agrees on establishing a invigorated sales strategy for the years to come and on the necessity to know the customers better. He wants to incorporate an overall vision on and evaluation of the information architecture and the existing information systems.At this second base he and Dwayne Warner argon thinking of starting the preparation an extensive adjustment (possibly a re fortify) of the ventureboard systems (Property Management System and Point of Sale Systems) inc luding the refilling of the Sail Sign card (with magnetic strip) by a silicon chip card in combination with the introduction of port adapted equipment base on the IP protocol.Myles Cyr explicitly asks to elaborate on the opportunities of IS to contri juste to the handicraft and to the comfort chain. The board is expecting that the relative IT operating be gage be rock-bottom in the next years. He expects an analysis and evaluation of the current province of IT/IS. What is good? What possible weaknesses atomic number 18 there? What problems get hold of to be calculate out? Which improvements be opportune? He expects a balanced report containing your proposals to upgrade the quality of data processing and information provisioning (including handling customer data). circus Cruise Lines can only resist and beat the foodstuff forces, if the confederation is innovative, acts agile and reacts fast and effectively to changes in the markets.Topics to be incorporated in rep ort-Existing bottle necks that present to be removed.-Changes in organization, management, control ideal and governance.-Changes in systems, data processing and data provisioning.-Change management process to meet the proposal.-Implementation plan including prioritization.-Risk assessment of the components of your advice.-Improvement of security and risk management (e additionally privacy protection).-Costs and benefits analysis of the proposed alternatives.1.3 buildingBeschrijven van fase naar fase Cindy1.4 ApproachTo gather extra information on IT in the cruising sector there was the hazard to do qualitative explore at an other cruising organization being Royal Caribbean.Gekozen voor andere maatschappij om huidige bedrijfsvoering niet te verstoren/verontrusten?The interrogation performed here was qualitative research trough semi structured interviews As described in the book p467. For this research the entire IT executive team up (see appendix) was found willing and able t o participate. discourse guides were created, for these interviews. These described the goals and topics of the interview and the questions to be asked. This gave the researchers a structure to ask the questions, not to forget alpha questions and not to get distracted from the goals of the interview. On the other hand this approach in any case gave flexibility to discuss unforeseen but relevant topics.On forehand stroke it was not eject for all the interviewees what their role and responsibilities where and what to ask them . This approach in addition gave the flexibility to start the interview with just a few questions but in the end having gathered a lot of information. Being able to interview more than 10 polar IT executives in unlike roles and on polar levels besides gave an insight on important topics on that moment.Interview guide interview minutesFor the execution of the interviews there was a clear division of the roles between the interviewers, there was one intervi ewer in the lead for communicate the questions, one checking whether all the questions were asked and one making notes for the meeting minutes.RuimteLiteratuur1.5 ConstraintsTiming asshole selectie reeds gedaan2. bazaar Cruise Lines Today circus potentiometer plc is a worldwide canvass party and one of the freehandedst travel by companies in the world. carnival generates all of its revenues from the rifle persistence. The companies wide-ranging product offerings contribute guests with exceptional holiday experiences at an outstanding protect. The success in providing quality sheet vacations has made genus Circus the to the gameest degree profitable caller in the unemployed travel manufacturing. Carnivals telephone circuit is sopranoly listed on both the New York Stock sub and on the capital of the united Kingdom Stock Exchange under symbol CCL. Carnival is the only accompany in the world to be entangled in both the SP euchre index in the United States a nd the FTSE cytosine index in the United Kingdom (Carnival potentiometer PLC, 2012).Carnival Corporation operates a fleet of 100 transports, with another seven ships scheduled for press homey between now and promenade 2016. With approximately 200,000 guests and 77,000 shipboard callees, there argon more than 277,000 people soaring aboard the Carnival fleet at any given term (Carnival Corporation PLC, 2012).For the purpose of our report it is crucial to understand how the Carnival Cruise Lines corporation deforms today. We need to understand how the various aspects of the vocation are even out up and how they work together. Only after a adjust understanding of the current situation, we can come with proposals for improvement and indicate the seismic disturbance on current ways of working.In literature one can fine many models that can be riding habitd to look at an organization with an internal perspective. In appendix X we bequeath an overview of many management mo dels we guide found in literature, with an explanation why, when and how it should be used. Since our report needs to cover the implementation of a new IT management strategy, we have decided to use McKinseys 7S model. This model, developed in the 1980s, involves 7 factors, which can be categorized as hard and soft elements. rough elements can be identified and influenced more easily. They would be driven by the organization charts and insurance coverage terms inside the business and they may include the systems you use to get work done. Soft elements are, by their very nature, more difficult to manage and may be affected by the culture of the organization. But you have to break yourself to these as much as the hard elements, as they provide the financing structure for the successful implementation of any change, and they are all mutualist on distributively other. systema skeletale X 7S framework (McKinsey)The hard elements in the 7S-model are Strategy, Structure and Systems the soft elements are Style, Shared Values, Skills and Staff. In wander to understand the 7S-model better a brief explanation is given below.Hard elementsStrategy by using care and vision the organizations objectives become clear.Structure how is the organization structured and which hierarchical layers are thereSystems all starchy and informal methods of operation, procedures and communication flowsSoft elementsStyle this is about leaders and management stylesShared set the standards and values and other forms of ethics within an organization in which vision, corporate culture and identity are the key elementsSkills these apprehension both the skills of the organization and those of the employeesStaff this is about the employees, their debatences and conjecture descriptions2.1 Strategy of CCLThe mission of Carnival Corporation is to put in the world on vacation and deliver exceptional experiences through many of the worlds best-known sail dishonors that cater to a variety of different geographic regions and lifestyles, all at an outstanding value unrivaled on land or at sea (Carnival Corporation PLC, 2012).The vision statement of Carnival is the following to consistently deliver fun, memorable vacations at a repeat value.Derived from this mission and vision, Carnival Cruise Lines has set up the following strategic objectivesto be the hint canvas streetwalker in all segments entered and to maintain the most up-to-date fleet of sheet ships in the worldto develop new travel segments and innovative journey packages to reach a larger number of potential and past canvasrsemploy sophisticated promotional efforts to achieve a greater awareness by the public concerning the availability and afford ability of canvass travel earn the first- succession and younger cruisers (Carnival), experienced cruisers (Holland America), upscale cruisers(Seaborne), and cruisers wanting a sailing vacation (Windstar)promote cruises as an alternative to land-ba sed vacationsprovide a variety of activities as well as ports of callbe innovative in all respects of operations of the ship. BRONDominant market shareCarnivals biggest enduringness is its immense scale and scope. It is twice as large as its biggest competitor and postulates in nearly every market and segment worldwide. This gives Carnival enormous fountain over the cruise industry as a whole. It enables the company to admit projects that grow the industry, gives it a platform for continued mergers and acquisitions activity, and helps Carnival negotiate with major manufacturers of cruise ships (Levin, Jones, Slade, 2011).Strong acquisition strategyCarnival has the ability to view as companies through acquisitions. By using an acquisition strategy, the Corporation has been able to localise itself in each geographical market in the world and social station itself as number one in the cruising sector.Comprehensive portfolioThe corporation has a large fleet capacity and opera tes 11 of the most recognizable cruise brand names. Carnivals portfolio of brand names appeals to almost every niche market, from calculate minded, contemporary to luxury cruises. each cruise preeminence operates globally and is targeted at one or more nationalities (see Appendix X).2.2 Structure of CCLCarnival Corporation plc has two main headquarters, Carnival Place in the US and Carnival House in the UK. The constituent Corporation and plc are separate listed companies with different shareholder bodies, but they jointly own all the operating companies in the group. Carnival Corporation owns the majority stake. As part of the merger between Carnival Corporation and PO Princess Cruises in 2002, it was agreed that PO Princess would be relisted as Carnival plc in London, remaining a separate company with a predominantly British shareholder body. Both headquarters have their own management team, strategy, and IT organization.Uncoordinated business operationsHistorically, Carnival has been place by the Arison family as a coalition of largely in capable businesses. Each cruise line largely manages its own customers, marketing, distribution, sales, ports, and logistics. This approach has had benefits internal competition means that each line operates better than any would in isolation. The business operations of the cruise lines are not centrally managed. Better coordination of these business operations could generate additional benefits for Carnival (Levin, Jones, Slade, 2011).Strong financial seatCarnival is one of the most profitable cruising companies. The companys average net income (FY2005 to FY2009) listed to 18.1% compared to the industry standard of 6.3% (Marketingteacher, 2012). The firm is dual listed on the New York Stock Exchange and the London Stock Exchange under the symbol CCL. Since the company is dual listed, it has the ability to raise more funds from investor than its competitors. With this also come greater stability callable to diffe rent markets being affected by different economic occurrences, semipolitical issues, and societys views (Corporate information, 2006).Decreasing profitThe profit of Carnival has cut over the last years. The net profit was $1,790 million in FY2009, a decrease of 23.2% as compared to 2008. Another weakness is that Carnival reports their financial statements in dollars. About half of their revenue is generated in a non-US currency, but is account in terms of US dollars. The value of the dollar against Euro appreciated from 1.60 in January 2010 to 1.53 by April 2010 against the Pound. If the dollar strengthens it would record a level revenue than is in truth earned (Marketingteacher, 2012).Clear focus cost leadershipCarnival Cruise Lines has a clear focus on Cost Leadership, i.e. CCL offers its product to the nap market. in that respectfore the highest focus is put on the expenditure and keeping the price as low as possible. Once the customer is on board the ship, additional reve nue is created by having the customer pay for everything that was not cover in the base price. Carnival is such a large company that it has significant cost advantages over most of its competitors.Strong marketingCarnival invests explicitly and effectively in print and television media. Their promotions target the lifestyles of each group of customers (Marketingteacher, 2012).Over-dependence on US marketCarnival derives a majority of its revenue (nearly 52%) from US customers. In 2009 the revenue from the North American market registered a double digit decline. The over-dependence on the US market makes Carnival vulnerable to the economic fluctuations of the American economy and this company is dependent on customers disposable income (Marketingteacher, 2012).Poor base hit recordThere is no public database of major cruise accidents, but Carnival has a notably worse safety record than other cruise companies. The Costa Concordia calamity has been the most recent in Carnivals safety woes.The Center for Disease delay does track all major viral outbreaks on cruise lines. In the 2009-2011 period, Carnival-owned companies accounted for 56% of all viral outbreaks, compared to a 48% average market share. The company is also thought to have a worse safety record for persons lost at sea, especially in the Carnival brand of the 179 disappearances since 2000, Carnival Cruise Line alone accounts for nearly 30% of them (Levin, Jones, Slade, 2011).Incidents/ vainglorious pressIn 2009, Carnival experienced bad press when ternion passengers fell off ships in a three week period. There were a total of 22 incidents of passengers falling overboard in 2009. In December 2008, passengers on the Carnival owned Oceania cruise ship were attacked by Somali pirates. Such events reflect negatively on the company and the industry.2.3 Systems in CCLWithin Carnival Cruise Lines every brand is seen as a separate business unit, with its own profit and loss statement.Decentralized systemsTh is decentralisation translates into a decentralization of systems as well. Decisions arent always communicated from the one cruise line to the other, which leads to duplication of effort. This decentralization of the business organization translates to the IT organization as well. either brand has its own IT section with own systems and infrastructure.Legacy systemsThere are many legacy systems, since there arent many players in the cruising sector, most of the strategic important applications are custom made. This leads to a spaghetti landscape in which integrating is very difficult and which affects the speed to market significantly.No integrated CRM systemCarnival doesnt use an integrated CRM system for the whole corporation. Customers from the one cruise line arent recognized as a repeat customer with a different cruise line within the group, this has an immediate effect on the pricing for repeat customers.The yearly capital planning of investments is done on US and UK Headq uarter level as well as on the different cruise line level. This will most likely lead to deficiency on synchronization and duplication of costs and efforts.2.4 Style within CCLThe leadership style at Carnival Cruise Lines can be called family-like. race with the right skills are hired and are giving the support and way of life to do their jobs correctly. This family-like leadership style is a management style that Ted Arison already used when he was still steering the company. Ted Arison had a non-hierarchical approach to management, importee that he delegated a lot of work downwards in the organization, throw overboarding him to wangle the bigger picture.People are encouraged to be hands-on and take calculated risks. Taking risks also means that mistakes can occur, however Carnival uses a no blame culture through which people disembodied spirit empowered (Managementparadise, 2012).Carnival has a separate training and development department set up in the organization. The cor poration invests heavily in coaching of high potentials by giving them learning opportunities that are fit for their ad hominem needs.2.5 Shared values of CCLDerived from the mission and vision of Carnival (see 2.1.1) the company has set some company values that wear a high priority. These values are Honesty, integrity, fairness, hospitality and teamwork. The values are deemed important to do their job in a correct manner.Carnival, as all other cruise lines in the industry, takes much proud in the focus they put on the environment. They invest heavily in wellness and safety, both for customers and for employees. There is a very strong focus on the environment and to work in a greener way. Charity is also one of the key components of their social responsibleness strategy.2.6 Skills at CCLWorking in the leisure industry requires some particular proposition skills that you cannot always learn. Most important skills that someone working in the leisure industry would need, are the fol lowingCustomer focusedEmpathyTeam workStress resistantMulti-culturalService orientationMulti linguisticSince Carnival Cruise Lines wants to be seen as the cruise line that delivers fun, the attitude of the employees is very important as well. The employees need to be cheerful and enthusiastic.2.7 Staff at CCLCruise ships typically operate with three classes of crew. The first is the officers these professionals are highly paying(a) and given ultimate command of the ship. The second is entertainers and wait staff typically lower-paid, but from the same countries as the cruisers that they serve. Finally, most of the ships crew is drawn from ontogenesis countries. While pay is low, the salary can found an attractive opportunity for these workers, who often work 10-month contracts without being able to see their homes and families. Turnover is high, and few of the crew see working on a cruise ship as a viable long-term career. Staff remains 24/7 on board of the ship, have their own ca bins at the low two decks of the ship. Only officers are allowed to mix between guests, this at special occasions and in formal attire. Other crew members have dedicated times during which they can be present on guest decks. working(a) excellence experienceCarnival has achieved below-industry-average costs and above-average revenue historically. This is largely due to the companys immense experience in owning and operating cruises, as well as some smart strategic plays. That advantage makes expanding into new markets vastly easier for Carnival than for a smaller player or upstart firm.Carnival has the largest jackpot of data to draw on to determine what does and does not work and has the most experienced marketers of cruises in the world. These soft advantages let Carnival potentially segment its customers more efficiently than competitors (Levin, Jones, Slade, 2011).3. Carnival Cruise Lines Competitive Position5 forces model of Porter (Levin, Jones, Slade, 2011)According to M ichael Porter, the state of competition in an industry depends on five basic forces (Porter, 1980). These forces are talk terms bureau of Suppliers, Bargaining Power of Buyers, Threat of New Entrants, Threat of Substitutes, and Rivalry among Competitors. The collective strength of these combined forces determines the ultimate profit potential of an industry. The following paragraphs are based on Levin et al. (Levin, Jones, Slade, 2011) and interviews at Royal Caribbean.3.1 Bargaining power of suppliersSupplier Power within the cruise line industry is moderately strong. Most of a cruise ships supplies are bought on an open, competitive market. The menace of integration by these suppliers is very low. One notable exception is Carnivals new builds. There are only 6 major shipyards that have recently built cruise ships, and 2-3 more that either perform conversions or have built ships forwards 2000. Capacity and capability at these main builders is also limited, so Carnival Corporat ion relies on a limited number of manufacturers for its new builds. The high supplier power within the shipbuilding is weakened because the relationship is interchangeable cruising is a similarly concentrated market. Additionally, the massive purchase value of a new ship provides a sizeable incentive for ship suppliers to provide cruise liners with competitive pricing.Additionally, cruise ship companies such as Carnival face extensive break costs, both in building and running a ship. Switching a ships manufacturer is hugely expensive for cruise companies because, typically, the shipbuilder owns the right over a ships design, which means that, in switching shipbuilders, cruise line companies have to incur high monetary and time costs in redesigning the ship. Such a switch can cost the cruise line company millions of dollars. Further, there is high input specialism between ships, meaning that, while there are alternatives for the majority of add components (both in ship construct ion and in cruise service), the cruise ship company markets particularized ships and amenities to the consumer, thereby increasing switching costs and supplier power.3.2 Bargaining power of emptorsBuyer power within the cruise line industry is relatively low. By contrast to most other vacations, more than two thirds of cruises are still booked through travel federal agents. Further, customers are spread around the world and do not have any mechanisms through which they can express a collective role or exert collective power, leaving them with minimal control. Additionally, customers do not have the ability or resources to create the cruise experience by themselves it is, by nature, a highly packaged deal. In addition, the experience offered by a cruise is very unique, and differs from other types of vacations enough that customers who prefer cruises are likely to choose them over other types of vacations, so long as the cost is not a substantial barrier. Buyer power is increase by internet search engines which enable comparisons of price and specifications across five-fold locations, brands, and companies. In addition, the continued high reliance on travel agencies increases buyer power because travel agencies make volume purchases and can demand lower prices based on the volume of customers they refer to specific companies.3.3 Threat of new entrantsThe risk of entry of new competitors to the cruise line industry that could provide a plausible threat to Carnival Corporation in summation markets is low. Entry into the high-end cruise line industry requires capital of approximately $1 billion since it costs, on average, $400 million to build a ship. Further, large cruise ships employ hundreds of sailors and crew that are trained for sea duty, which creates an additional cost. Since brand recognition is very important in the cruise line industry, it would take a new competitor valuable time to build an identity and reputation in order to be able to compete with the incumbents. Lastly, there are strict government and international regulations that are mixed with a cruise company. Obtaining proper permits to operate, as well as the political connections, would also cost a company a large amount of time and resources. In Asia, however, Carnival might be more implicated about new entrants. Asian operations, markets, and customers are much less delimitate than in the Americas or Europe, and expectations of cruise quality and scale are lower. There are numerous Asian entrepreneurs and companies that might be able to criticise into this fast-growing market.3.4 Threat of substitutesThere are many substitutes, such as all inclusive, Club Med, and alternative vacation packages. However, market research indicates that cruise lines provide higher customer satisfaction than land based vacation packages. Cruisers express an overall 94.8% satisfaction rate with their experiences. Any vacation can be substituted for, and there is not a high cost to change, which makes the threat of substitution seem very high. This trend has fueled the continuing evolution of the cruise vacation experience. Over the years, cruise lines have expanded itineraries to include more diverse ports of call and have introduced innovative onboard amenities and facilities to compete with land based travel. These onboard experiences include cell phone access, Internet cafes and Wi-Fi zones which allow passengers to feel as if they are connected on land. They have also added onboard experiences such as rock-climbing, bowling alleys, surfing pools, multi-room villas, sixfold themed restaurants and expansive spas, health and fitness facilities that easily rival land-based options (CLIA, 2012) Although there are many substitutes to the cruise line industry, they cannot replicate the cruise line experience.3.5 Rivalry of competitorsCarnival is the leading company within the cruise line industry due to its multiple fleets and significant international pre sence. There are significant barriers to entry and become flat within the cruise line industry, which has resulted in a high parsimony ratio. The cruise line industry is effectively an oligopoly market, where several major cruise liners make up more than 90% of the market shares. Carnival is continuously engaged in marketing and pricing battles with these competitors, making internal aspiration central to the industry. Additionally, cruise lines have historically been subject to heavy mergers acquisitions activity, and Carnival sometimes competes to acquire even more share.Overall, Carnivals branding is strong within the industry, and even stronger within its market course of study (contemporary). When compared to its competitors, Carnival continues to remain a formidable force in the cruise industry.Figure X 5 forces model for Carnival Cruise Lines4. Cruise Industry DevelopmentsWe will use a PESTEL analysis to provide the context of the cruising industry as a whole, in order to understand the organizations role in relation to the outside(a) environment. The PESTEL analysis provides a context for the organizations role in relation to the extraneous environment. The PESTEL analysis technique is often used in conjunction with a SWOT analysis to assess the situation of a business. PESTEL covers Political, economical, Social, Technological, Legal and environmental factors. The analysis consists in carefully determining all factors and finding out exactly in what way and to what extent these factors influence the company. Each category of factors is of crucial importance to advanced strategic management (Marketingminefield, 2012).Figure 2 gives an overview of PESTEL factors for the Cruise Industry. The PESTEL analysis is further explained in the following sections of this chapter.PoliticalEconomicOPPORTUNITIESGrowing market in AsiaMultiple trade organizations and lobbyist-Cruise Lines International companionship-Florida-Caribbean Cruise stand (trade organ ization)-International Council of Cruise Lines Cruise industry lobbyist-North West Canada Cruise Association (trade organization for Hawaii and Pacific North West)-Passenger ship Association-International Maritime organization (IMO) part of the United NationsOPPORTUNITIESProfitable business cruisers spend typically more on vacation then non cruisersPricing based on data analysisBig market share to capture cruising industry is the fastest growing branch of the total leisure industryTHREATHSGlobal economic recessionDecrease in growth for sulfur of Europe due to bad economyHigh fuel pricesTHREATSgeopolitical instability-Terrorism actionsTax loopholesSocialTechnologicalOPPORTUNITIESStrongly favorable Demographicsever-changing consumer trends more focus on health, spa arrangements, more diversity in dining and other selling pointsever-changing role of travel agentNumber of online bookings is increasing and increasing more every yearOPPORTUNITIESChanging consumer trends Bring Your Own Device (BYOD), connectivityTechnological development in broadcast communication-State of the art technology possibilities on the ship-Higher connectivity on the shipTHREATHSDue to the exploding market in Asia, systems need to be set up in Chinese characters. This is a challenge for most systemsOutsourcing level 2 b 3 support is difficult because the knowledge is very specificTHREATHSOverblown media attention when something happens on a cruise shipenvironmentalLegalTHREATHSEvents in the outside world (9/11, Costa Concordia crash and ash tree cloud Iceland)OPPORTUNITIESComplex diversity of environmental, health and safety legislationFigure X PESTEL analysis Cruise Industry4.1 Political FactorsPolitical factors represent the way and extent to which a government influences the economy and the business. Specific areas are labor law, tax policy, tariffs, trade restrictions and environmental law.Geopolitical InstabilityIn 2011, the Arab forswear revolutions ca