Carnival Cruise Lines: Exploiting a Sea of Global Opportunity

Questions

1. What global forces have contributed to the growth of the

cruise-line industry?
- Operating globally will lead to lower tax advantages by registering the company as separate
legal entities in different countries. Also, will lead to less stringent employment rules by
registering the company as separate legal entities in different countries. Favorable govt. policies
worldwide by subsidization of ship building led to less expensive ships available.
• Technological advance – the industry was a direct respond to the technological advance
in air travel that made liner travel less attractive to businesspeople due the cost and time
factors.
• Market liberalization and international cooperation – liberalization of cross border trade
and resource movement had allowed the cruise line industry to force on the cheaper yet
competent labor resources. At the same time, the industry can offer various global
destinations and on land elimination package to its potential customers.
• Support services – the development of new ports allows the cruise line to expand its
destinations and provide varieties of offering to the customers. This will help attract new
customers, and the same time ensures the return of existing customers.
• Customer’s affluence – the growing income among the middle class in many countries,
particularly in the emerging market, contribute to the increase in discretionary income
that could be spent on tourism.

2. What specific steps has Carnival Cruise Lines taken to benefit

from global social changes?
- With globalization, businesses have gain advantages by expanding the business around the
globe.
- Carnival has instituted very strict security measures. It has also implemented strict health in
safety measures. Carnival has dealt with economic recessions by offering shorter cruises that
embark closer to home with times of economic prosperity by offering longer cruises that
incorporate more exotic destinations. It minimizes staffing cost by sourcing employees in a
global basis. In, addition across its various lines, Carnival offers wide variety of themes, classes
of service, and destination.
 • Political and Legal policies – registration of the company no doubt that political polices
influence on how international businesses conduct its operations in the respected
country.
• Economic Forces – Acquiring Labor resources to ensure competitiveness in the market.
Carnival Cruise must ensure that its customer is given the best services whenever they
are on board on a cruise. Excellent people service especially when it comes to interacting
with people, fluency in the English language is a ‘must’ for all crew members. Seeing the
importance of having the right crew members to support the business and the company.
Asean labour(especially Pilipino’s), are highly demanded for as crew because not only
labour is cheap but they are also highly skilled in customer service and majority of them
are also fluent in English.
• Casinos & other amenities – to attract customers. There are various ranges of shipboard
store, products, and amenities for customers to spend on. Casinos and gambling on board
of the cruise is not restricted especially, because it is not taking advantages of any
national law as the cruises operates outside the jurisdiction of national authority.
Also, customer is also able to shop for merchandise all over the world not only on board
but also by increasing for land-based tourism industry whenever the ship embarked in
any foreign country. Cruise companies can gain additional income by being capable of
building relationship with the lang-based tourism company.

3. What are some of the national differences that affect the

operations of cruise lines?
- These are the national differences that affect the operations of cruise line. The cruise line
operators can obtain and can benefit from the national differences through factors such as
economic, labor, environmental regulations, and safety stability.
For example: most shipping lines chose to plug their vessels in countries such as Liberia,
Mongolia, or Panama because of the lower taxes and less stringent employment practices by the
laws of those countries.
For Finland, France, Germany, Italy, Japan, and South Korea have shipyards capable of building
cruise ships. Consequently, Governments or example Italy may choose to subsidize the
ship0building industry to secure contracts for their domestic firms. In addition to the fact that
many ships are designed to accommodate the economic realities of the mass market, others are
specifically designed to appeal to the cultural preferences of their client here (Costa, based in
Italy, offers a distinctive Italian)
4. How might cruise lines increase sales to people outside the
United States?
• Geographically pertinent themes – Design tour package suit to location and places of
offering shorter cruised that embarks closer to home
• Offered ficed cruise -price – Cost per cruise offer low than others.
• Implemented strict health and safety measures- Avoided areas to make the passenegers
free from political upheaval.
• Dealth with economict recessions – minimized staffing costs by sourcing employees on a
global basis.

5. What threats exist for the future performance of the cruise-line

industry and, specifically, of Carnival Cruise Lines? If you were in
charge of Carnival, how would you (a) try to prevent these threats
from becoming reality and (b) deal with them if they were realized?
- Millions of dollars are required to train and maintain employees, besides that, the startup capital
of a cruise line company is very huge that is discourages and limits the number of potential
entrants.
- It is not easy for new entrants with low brand equity to complete with the established cruise line
companies in the industry. The Availability of diversified substitute adds to the competitiveness
of the cruise line industry. There are always alternative forms of cheaper accommodation for
families.
- The cruise companies must provide aggressive pricing to retain the customer stands a better
chance to survival. Also, Cruise lines must be able to always offer competitive vacation packages
prices to secure sales during all season and cater for people during all sorts of economic stability.

6. Discuss the ethics of cruise lines regarding the avoidance of

taxes while buying ships built with governmental subsidies.
- Carnival paying taxes only on revenues from Carnival Princess and Holland America’s sales of
U.S Hotel and tour packages. Carnival secures bids all over the word. Because shipbuilding
employs so many people and uses so much locally produces steel, government often subsidize
the industry practice that work to the benefit of the cruise line industry by offering less expensive
prices for ships.
REFERENCES

https://www.cruiseshipjobsnetwork.com/cruise/cruise-ship-industry/

https://brainmass.com/business/international-business-
management/carnival-cruise-line-global-social-changes-and-
opportunities-435362

https://sample-term-paper.blogspot.com/2013/09/carnival-cruise-
lines-exploiting-sea-of.html?m=1