The History Of Uncoordinated Business Operations Tourism Essay

This papers is based on the Harvard Business Case survey about Carnival Cruise Lines. It is written as a maestro thesis for the Master of Information Management ( MIM ) surveies by Christianne Aussems, Nathalie Claes, Eric Janssen and Corni?? van Schaik, under the supervising of Piet Ribbers, Professor of Information Management, all at TiasNimbas Business School in Tilburg.

1.1 About this study

This study describes the information direction scheme for Carnival Cruise Lines ( CCL ) for the period 2007-2011. It proposes alterations in organisation, direction, systems, and administration construction for CCL and describes the execution program, including prioritization and a costs and benefits analysis. The mark audience of the study is Myles Cyr, CIO of Carnival Cruise Lines, and in add-on for the strategic direction degree of CCL.

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1.3 Structure

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1.4 Approach

To garner excess information on IT in the cruising sector there was the chance to make qualitative research at another cruising organisation being Royal Caribbean.

Gekozen voor andere maatschappij om huidige bedrijfsvoering niet Te verstoren/verontrusten?

The research performed here was qualitative research trough semi structured interviews As described in the booki?? p467. For this research the full IT executive squad ( see appendix ) was found willing and able to take part.

Interview ushers were created, for these interviews. These described the ends and subjects of the interview and the inquiries to be asked. This gave the research workers a construction to inquire the inquiries, non to bury of import inquiries and non to acquire distracted from the ends of the interview. On the other manus this attack besides gave flexibleness to discourse unanticipated but relevant subjects.

On forehand it was non clear for all the interviewees what their function and duties where and what to inquire them. This attack besides gave the flexibleness to get down the interview with merely a few inquiries but in the terminal holding gathered a batch of information. Bing able to interview more than 10 different IT executives in different functions and on different degrees besides gave an penetration on of import subjects on that minute.

Interview usher interview proceedingss

For the executing of the interviews there was a clear division of the functions between the interviewers, there was one interviewer in the lead for inquiring the inquiries, one look intoing whether all the inquiries were asked and one devising notes for the meeting proceedingss.



1.5 Constraints


Tool selectie reeds gedaan

2. Carnival Cruise Lines Today

Carnival Corporation & A ; plc is a planetary sail company and one of the largest holiday companies in the universe. Carnival generates all of its grosss from the sail industry. The companies wide-ranging merchandise offerings provide invitees with exceeding holiday experiences at an outstanding value. The success in supplying quality sail holidaies has made Carnival the most profitable company in the leisure travel industry. Carnivali??s stock is dually listed on both the New York Stock Exchange and on the London Stock Exchange under symbol CCL. Carnival is the lone company in the universe to be included in both the S & A ; P 500 index in the United States and the FTSE 100 index in the United Kingdom ( Carnival Corporation & A ; PLC, 2012 ) .

Carnival Corporation operates a fleet of 100 ships, with another seven ships scheduled for bringing between now and March 2016. With about 200,000 invitees and 77,000 shipboard employees, there are more than 277,000 people sailing aboard the Carnival fleet at any given clip ( Carnival Corporation & A ; PLC, 2012 ) .

For the intent of our study it is important to understand how the Carnival Cruise Lines corporation works today. We need to understand how the assorted facets of the concern are set up and how they work together. Merely after a true apprehension of the current state of affairs, we can come with proposals for betterment and bespeak the impact on current ways of working.

In literature one can ticket many theoretical accounts that can be used to look at an organisation with an internal position. In appendix X we provide an overview of some direction theoretical accounts we have found in literature, with an account why, when and how it should be used. Since our study needs to cover the execution of a new IT direction scheme, we have decided to utilize McKinseyi??s 7S theoretical account. This theoretical account, developed in the 1980i??s, involves 7 factors, which can be categorized as difficult and soft elements. Difficult elements can be identified and influenced more easy. They would be driven by the organisation charts and describing lines within the concern and they may include the systems you use to acquire work done. Soft elements are, by their very nature, more hard to pull off and may be affected by the civilization of the organisation. But you have to use yourself to these every bit much as the difficult elements, as they provide the support construction for the successful execution of any alteration, and they are all interdependent on each other.

Figure X 7S model ( McKinsey )

The difficult elements in the 7S-model are Strategy, Structure and Systems ; the soft elements are Style, Shared Values, Skills and Staff. In order to understand the 7S-model better a brief account is given below.

Difficult elements:

? Strategy i?? by utilizing mission and vision the organizationi??s objectives become clear.

? Structure i?? how is the organisation structured and which hierarchal beds are at that place

? Systems i?? all formal and informal methods of operation, processs and communicating flows

Soft elements:

? Style i?? this is about leading and direction manners

? Shared values i?? the criterions and values and other signifiers of moralss within an organisation in which vision, corporate civilization and individuality are the cardinal elements

? Skills i?? these concern both the accomplishments of the organisation and those of the employees

? Staff i?? this is about the employees, their competencies and occupation descriptions

2.1 Strategy of CCL

The mission of Carnival Corporation is to take the universe on holiday and present exceeding experiences through many of the universe ‘s best-known sail trade names that cater to a assortment of different geographic parts and life styles, all at an outstanding value unrivaled on land or at sea ( Carnival Corporation & A ; PLC, 2012 ) .

The vision statement of Carnival is the undermentioned: to systematically present merriment, memorable holidaies at a repetition value.

Derived from this mission and vision, Carnival Cruise Lines has set up the following strategic aims:

? to be the taking sail operator in all sections entered and to keep the most up-to-date fleet of sail ships in the universe

? to develop new sail sections and advanced sail bundles to make a larger figure of possible and past patrol cars

? employ sophisticated promotional attempts to accomplish a greater consciousness by the public refering the handiness and afford ability of sail travel

? pull the first-time and younger patrol cars ( Carnival ) , experient patrol cars ( Holland America ) , upscale patrol cars ( Seaborne ) , and patrol cars desiring a seafaring holiday ( Windstar )

? promote cruises as an alternate to land-based holidaies

? supply a assortment of activities every bit good as ports of call

? be advanced in all respects of operations of the ship. BRON

Dominant market portion

Carnivali??s biggest strength is its immense graduated table and range. It is twice every bit big as its biggest rival and competes in about every market and section worldwide. This gives Carnival tremendous power over the sail industry as a whole. It enables the company to set about undertakings that grow the industry, gives it a platform for continued amalgamations and acquisitions activity, and helps Carnival negotiate with major makers of sail ships ( Levin, Jones, & A ; Slade, 2011 ) .

Strong acquisition scheme

Carnival has the ability to obtain companies through acquisitions. By utilizing an acquisition scheme, the Corporation has been able to place itself in each geographical market in the universe and rank itself as figure one in the cruising sector.

Comprehensive portfolio

The corporation has a big fleet capacity and operates 11 of the most recognizable sail trade name names. Carnivali??s portfolio of trade name names entreaties to about every niche market, from budget minded, modern-day to luxury sails. Each sail line operates globally and is targeted at one or more nationalities ( see Appendix X ) .

2.2 Structure of CCL

Carnival Corporation & A ; plc has two chief central offices, Carnival Place in the US and Carnival House in the UK. The constitutional Corporation and plc are separate listed companies with different stockholder organic structures, but they jointly own all the operating companies in the group. Carnival Corporation owns the bulk interest. As portion of the amalgamation between Carnival Corporation and P & A ; O Princess Cruises in 2002, it was agreed that P & A ; O Princess would be relisted as Carnival plc in London, staying a separate company with a preponderantly British stockholder organic structure. Both central offices have their ain direction squad, scheme, and IT organisation.

Uncoordinated concern operations

Historically, Carnival has been run by the Arison household as a alliance of mostly independent concerns. Each sail line mostly manages its ain clients, selling, distribution, gross revenues, ports, and logistics. This attack has had benefits: internal competition means that each line operates better than any would in isolation. The concern operations of the sail lines are non centrally managed. Better coordination of these concern operations could bring forth extra benefits for Carnival ( Levin, Jones, & A ; Slade, 2011 ) .

Strong fiscal place

Carnival is one of the most profitable cruising companies. The company ‘s mean net income ( FY2005 to FY2009 ) amounted to 18.1 % compared to the industry criterion of 6.3 % ( Marketingteacher, 2012 ) . The house is double listed on the New York Stock Exchange and the London Stock Exchange under the symbol CCL. Since the company is double listed, it has the ability to raise more financess from investor than its rivals. With this besides come greater stableness due to different markets being affected by different economic happenings, political issues, and societyi??s positions ( Corporate information, 2006 ) .

Decreasing net income

The net income of Carnival has diminished over the last old ages. The net net income was $ 1,790 million in FY2009, a lessening of 23.2 % as compared to 2008. Another failing is that Carnival reports their fiscal statements in dollars. About half of their gross is generated in a non-US currency, but is reported in footings 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 enter a lower gross than is really earned ( Marketingteacher, 2012 ) .

Clear focal point cost leading

Carnival Cruise Lines has a clear focal point on Cost Leadership, i.e. CCL offers its merchandise to the mass market. Therefore the highest focal point is put on the monetary value and maintaining the monetary value every bit low as possible. Once the client is on board the ship, extra gross is created by holding the client wage for everything that was non covered in the basal monetary value. Carnival is such a big company that it has important cost advantages over most of its rivals.

Strong selling

Carnival invests explicitly and efficaciously in print and telecasting media. Their publicities target the life styles of each group of clients ( Marketingteacher, 2012 ) .

Over-dependence on US market

Carnival derives a bulk of its gross ( about 52 % ) from US clients. In 2009 the gross from the North American market registered a dual digit diminution. The over-dependence on the US market makes Carnival vulnerable to the economic fluctuations of the American economic system and this company is dependent on customersi?? disposable income ] ( Marketingteacher, 2012 ) .

Poor safety record

There is no public database of major sail accidents, but Carnival has a notably worse safety record than other sail companies. The Costa Concordia calamity has been the most recent in Carnivali??s safety sufferings.

The Center for Disease Control does track all major viral eruptions on sail lines. In the 2009-2011 period, Carnival-owned companies accounted for 56 % of all viral eruptions, compared to a 48 % mean market portion. The company is besides thought to hold a worse safety record for individuals lost at sea, particularly in the Carnival trade name: of the 179 disappearings since 2000, Carnival Cruise Line entirely histories for about 30 % of them ( Levin, Jones, & A ; Slade, 2011 ) .

Incidents/Bad imperativeness

In 2009, Carnival experienced bad imperativeness when three riders fell off ships in a three hebdomad period. There were a sum of 22 incidents of riders falling overboard in 2009. In December 2008, riders on the Carnival owned Oceania sail ship were attacked by Somali plagiarists. Such events reflect negatively on the company and the industry.

2.3 Systems in CCL

Within Carnival Cruise Lines every trade name is seen as a separate concern unit, with its ain net income and loss statement.

Decentralized systems

This decentalisation translates into a decentalisation of systems as good. Decisions areni??t ever communicated from the one sail line to the other, which leads to duplicate of attempt. This decentalisation of the concern organisation translates to the IT organisation every bit good. Every trade name has its ain IT section with ain systems and substructure.

Bequest systems

There are many bequest systems, since there areni??t many participants in the cruising sector, most of the strategic of import applications are custom made. This leads to a spaghetti landscape in which integrating is really hard and which affects the velocity to market significantly.

No integrated CRM system

Carnival doesni??t usage an integrated CRM system for the whole corporation. Customers from the one sail line areni??t recognized as a repetition client with a different sail line within the group, this has an immediate consequence on the pricing for repetition clients.

The annual capital planning of investings is done on US and UK Headquarter degree every bit good as on the different sail line degree. This will most likely lead to miss on synchronism and duplicate of costs and attempts.

2.4 Style within CCL

The leading manner at Carnival Cruise Lines can be called family-like. Peoples with the right accomplishments are hired and are giving the support and room to make their occupations right. This family-like leading manner is a direction manner that Ted Arison already used when he was still maneuvering the company. Ted Arison had a non-hierarchical attack to direction, significance that he delegated a batch of work downwards in the organisation, leting him to supervise the bigger image.

Peoples are encouraged to be hands-on and take deliberate hazards. Taking hazards besides means that errors can happen, nevertheless Carnival uses a no blasted civilization through which people feel empowered ( Managementparadise, 2012 ) .

Carnival has a separate preparation and development section set up in the organisation. The corporation invests to a great extent in coaching of high potencies by giving them larning chances that are fit for their personal demands.

2.5 Shared values of CCL

Derived from the mission and vision of Carnival ( see 2.1.1 ) the company has set some company values that wear a high precedence. These values are: Honesty, unity, equity, cordial reception and teamwork. The values are deemed of import to make their occupation in a right mode.

Carnival, as all other sail lines in the industry, takes much proud in the focal point they put on the environment. They invest to a great extent in wellness and safety, both for clients and for employees. There is a really strong focal point on the environment and to work in a greener manner. Charity is besides one of the cardinal constituents of their societal duty scheme.

2.6 Skills at CCL

Working in the leisure industry requires some specific accomplishments that you can non ever learn. Most of import accomplishments that person working in the leisure industry would necessitate, are the undermentioned:

? Customer focused

? Empathy

? Team work

? Stress resistant

? Multi-cultural

? Service orientation

? Multi lingual

Since Carnival Cruise Lines wants to be seen as the sail line that delivers fun, the attitude of the employees is really of import as good. The employees need to be cheerful and enthusiastic.

2.7 Staff at CCL

Cruise ships typically operate with three categories of crew. The first is the officers: these professionals are extremely paid and given ultimate bid of the ship. The 2nd is entertainers and wait staff: typically lower-paid, but from the same states as the patrol cars that they serve. Finally, most of the shipsi?? crew is drawn from developing states. While wage is low, the wage can stand for an attractive chance for these workers, who frequently work 10-month contracts without being able to see their places and households. Employee turnover is high, and few of the crew see working on a sail ship as a feasible long-run calling. Staff remains 24/7 on board of the ship, have their ain cabins at the lowest two decks of the ship. Lone officers are allowed to blend between invitees, this at particular occasions and in formal garb. Other crew members have dedicated times during which they can be present on guest decks.

Operational excellence & A ; experience

Carnival has achieved below-industry-average costs and above-average gross historically. This is mostly due to the companyi??s huge experience in owning and operating sails, every bit good as some smart strategic dramas. That advantage makes spread outing into new markets immensely easier for Carnival than for a smaller participant or nouveau-riche house.

Carnival has the largest pool of informations to pull on to find what does and does non work and has the most experient sellers of sails in the universe. These i??softi?? advantages let Carnival potentially section its clients more expeditiously than rivals ( Levin, Jones, & A ; Slade, 2011 ) .

3. Carnival Cruise Lines Competitive Position

5 forces theoretical account of Porter ( Levin, Jones, & A ; Slade, 2011 )

Harmonizing to Michael Porter, the province of competition in an industry depends on five basic forces ( Porter, 1980 ) . These forces are: Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of New Entrants, Threat of Substitutes, and Rivalry among Competitors. The corporate strength of these combined forces determines the ultimate net income potency of an industry. The undermentioned paragraphs are based on Levin et Al. ( Levin, Jones, & A ; Slade, 2011 ) and interviews at Royal Caribbean.

3.1 Bargaining power of providers

Supplier Power within the sail line industry is reasonably strong. Most of a sail shipi??s supplies are bought on an unfastened, competitory market. The menace of integrating by these providers is really low. One noteworthy exclusion is Carnivali??s new physiques. There are merely 6 major shipyards that have late built sail ships, and 2-3 more that either perform transitions or have built ships before 2000. Capacity and capableness at these chief builders is besides limited, so Carnival Corporation relies on a limited figure of makers for its new physiques. The high provider power within the ship building is weakened because the relationship is symmetrical: cruising is a likewise concentrated market. Additionally, the monolithic purchase value of a new ship provides a ample inducement for ship providers to supply sail line drives with competitory pricing.

Additionally, cruise ship companies such as Carnival face extended shift costs, both in edifice and running a ship. Switch overing a shipi??s maker is enormously expensive for sail companies because, typically, the shipwright owns the right over a shipi??s design, which means that, in exchanging shipwrights, sail line companies have to incur high pecuniary and clip costs in redesigning the ship. Such a switch can be the sail line company 1000000s of dollars. Further, there is high input distinction between ships, intending that, while there are options for the bulk of supply constituents ( both in ship building and in sail service ) , the sail ship company markets specific ships and comfortss to the consumer, thereby increasing exchanging costs and supplier power.

3.2 Bargaining power of purchasers

Buyer power within the sail line industry is comparatively low. By contrast to most other holidaies, more than two tierces of sails are still booked through travel agents. Further, clients are spread around the universe and do non hold any mechanisms through which they can show a corporate voice or exercise corporate power, go forthing them with minimum control. Additionally, clients do non hold the ability or resources to make the sail experience by themselves i?? it is, by nature, a extremely packaged trade. In add-on, the experience offered by a sail is really alone, and differs from other types of holidaies enough that clients who prefer sails are likely to take them over other types of holidaies, so long as the cost is non a significant barrier. Buyer power is increased by cyberspace hunt engines which enable comparings of monetary value and specifications across multiple locations, trade names, and companies. In add-on, the continued high trust on travel bureaus increases purchaser power because travel bureaus make volume purchases and can demand lower monetary values based on the volume of clients they refer to specific companies.

3.3 Threat of new entrants

The hazard of entry of new rivals to the sail line industry that could supply a plausible menace to Carnival Corporation in nucleus markets is low. Entry into the high-end sail line industry requires capital of about $ 1 billion since it costs, on norm, $ 400 million to construct a ship. Further, big sail ships employ 100s of crewmans and crew that are trained for sea responsibility, which creates an extra cost. Since trade name acknowledgment is really of import in the sail line industry, it would take a new rival valuable clip to construct an individuality and repute in order to be able to vie with the officeholders. Last, there are rigorous authorities and international ordinances that are involved with a sail company. Obtaining proper licenses to run, every bit good as the political connexions, would besides be a company a big sum of clip and resources. In Asia, nevertheless, Carnival might be more concerned about new entrants. Asiatic operations, markets, and clients are much less defined than in the Americas or Europe, and outlooks of sail quality and graduated table are lower. There are legion Asiatic enterprisers and companies that might be able to tap into this aggressive market.

3.4 Menace of replacements

There are many replacements, such as all inclusive, Club Med, and alternate holiday bundles. However, market research indicates that sail lines provide higher client satisfaction than land based holiday bundles. Cruisers express an overall 94.8 % satisfaction rate with their experiences. Any holiday can be substituted for, and there is non a high cost to alter, which makes the menace of permutation seem really high. This tendency has fueled the go oning development of the sail holiday experience. Over the old ages, sail lines have expanded paths to include more diverse ports of call and have introduced advanced onboard comfortss and installations to vie with land based travel. These onboard experiences include cell phone entree, Internet coffeehouse and Wi-Fi zones which allow riders to experience as if they are connected on land. They have besides added onboard experiences such as rock-climbing, bowling back streets, surfing pools, multi-room Villas, multiple themed eating houses and expansive watering place, wellness and fittingness installations that easy rival land-based options ( CLIA, 2012 ) Although there are many replacements to the sail line industry, they can non retroflex the sail line experience.

3.5 Rivalry of rivals

Carnival is the taking company within the sail line industry due to its multiple fleets and important international presence. There are important barriers to entry and issue within the sail line industry, which has resulted in a high concentration ratio. The sail line industry is efficaciously an oligopoly market, where several major sail line drives make up more than 90 % of the market portions. Carnival is invariably engaged in selling and pricing conflicts with these rivals, doing internal rivalry cardinal to the industry. Additionally, sail lines have historically been capable to heavy amalgamations & A ; acquisitions activity, and Carnival sometimes competes to get even more portion.

Overall, Carnivali??s stigmatization is strong within the industry, and even stronger within its market class ( modern-day ) . When compared to its rivals, Carnival continues to stay a formidable force in the sail industry.

Figure Ten: 5 forces theoretical account for Carnival Cruise Lines

4. Cruise Industry Developments

We will utilize a PESTEL analysis to supply the context of the cruising industry as a whole, in order to understand the organizationi??s function in relation to the external environment. The PESTEL analysis provides a context for the organizationi??s function in relation to the external environment. The PESTEL analysis technique is frequently used in concurrence with a SWOT analysis to measure the state of affairs of a concern. PESTEL covers Political, Economic, Social, Technological, Legal and Environmental factors. The analysis consists in carefully finding all factors and happening out precisely in what manner and to what extent these factors influence the company. Each class of factors is of important importance to progress strategic direction ( Marketingminefield, 2012 ) .

Figure 2 gives an overview of PESTEL factors for the Cruise Industry. The PESTEL analysis is farther explained in the undermentioned subdivisions of this chapter.

Political Economic


? Turning market in Asia

? Multiple trade organisations and lobbyist:

-Cruise Lines International Association

-Florida-Caribbean Cruise Association ( merchandise organisation )

-International Council of Cruise Lines ; Cruise industry lobbyist

-North West & A ; Canada Cruise Association ( trade organisation for Hawaii and Pacific North West )

-Passenger ship Association

-International Maritime organisation ( IMO ) portion of the United Nations OPPORTUNITIES

? Profitable concern ; patrol cars spend typically more on holiday so non patrol cars

? Pricing based on informations analysis

? Large market portion to gaining control ; cruising industry is the fastest turning subdivision of the entire leisure industry


? Global economic recession

? Decrease in growing for South of Europe due to bad economic system

? High fuel monetary values


? Geopolitical instability

-Terrorism actions

? Tax loopholes

Social Technological


? Strongly favourable Demographics

? Changing consumer tendencies: more focal point on wellness, spa agreements, more diverseness in dining and other merchandising points

? Changing function of travel agent

? Number of on-line engagements is increasing and increasing more every twelvemonth Opportunity

? Changing consumer tendencies: Bring Your Own Device ( BYOD ) , connectivity

? Technological development in satellite communicating:

-State of the art engineering possibilities on the ship

-Higher connectivity on the ship


? Due to the detonating market in Asia, systems need to be set up in Chinese characters. This is a challenge for most systems

? Outsourcing degree 2 & A ; b 3 support is hard because the cognition is really specific


? Overblown media attending when something happens on a sail ship

Environmental Legal


? Events in the outside universe ( 9/11, Costa Concordia clang and Ash cloud Iceland ) OPPORTUNITIES

? Complex diverseness of environmental, wellness and safety statute law

Figure Ten: PESTEL analysis Cruise Industry

4.1 Political Factors

Political factors represent the manner and extent to which a authorities influences the economic system and the concern. Specific countries are: labour jurisprudence, revenue enhancement policy, duties, trade limitations and environmental jurisprudence.

Geopolitical Instability

[ In 2011, the Arab Spring revolutions caused important upheaval across the Eastern Mediterranean. While commendable from a democratic position, these types of break besides tend to close down sails. While the Eastern Mediterranean is a comparatively little market, Carnival must watch for future menaces and respond suitably. Obviously, most geopolitical menaces are ineluctable from Carnivali??s position. However, most patrol cars are non wedded to a specific finish. If Carnival is prepared to swivel rapidly from one part to another, so the losingss from these sails can be minimized. ] ( Levin, Jones, & A ; Slade, 2011 )

This turning geopolitical instability additions throughout the whole leisure and cruising industry an increased fright for terrorist onslaughts. The menace of terrorist act and pirates catching cruise ships is a concern for companies in this industry, and besides negatively affect consumersi?? perceptual experiences of cruising ( Marketingteacher, 2012 ) .

Turning Asiatic Market

While the gross for sails has declined in the US, it is turning in Europe and Asia, taking to more chances for Cruise Lines to spread out in these parts ( Marketingteacher, 2012 ) . Asiatic clients accounted for merely 9.8 % of planetary sail grosss in 2010. However, this market section grew by about 40 % , driven by a new, flush category and aging demographics across the Asia-Pacific part. If decently tapped, Asia could be as of import a market as North America for Carnival within the following 10-20 old ages ( Levin, Jones, & A ; Slade, 2011 ) . Customers in Asia are now looking for epicurean sails as a holiday option. Disposable income of the Chinese consumer has grown yearly by 10 % a twelvemonth. The entire figure of riders sourced from China increased about 74 % in 2009 ( Marketingteacher, 2012 ) .

From a technological point the turning Asiatic market puts the system developers for a challenge. Most systems within Carnival are legacy systems, developed when Carnival was merely looking at the US market. Carnival had ne’er envisioned stepping into the Asiatic market at the minute of system development, so the systems areni??t set up to get by with the Chinese characters.

Trade organisations

There are many trade organisations active in the sail industry. Mostly these trade organisations are focused on one market and they promote actively the cruising experience in that country.

Tax Loopholes

Carnival has been taking advantage of particular revenue enhancement loopholes to avoid paying US corporation revenue enhancements. In 2009 the US authorities decided to look at shuting those loopholes. If these loopholes are closed, it could impact their fiscal statements and financial underside line in the hereafter ( Marketingteacher, 2012 ) .

4.2 Economic Factors

Economic factors refer to countries alone to economic system and straight influenced by economic system or comprised by economic system, countries such as rising prices rate, involvement rate, economic growing or exchange rates. All countries can greatly act upon a concern, which makes them an highly of import portion of the PESTEL analysis.

Global economic recession

Global economic recession. Decrease in growing for South of Europe due to bad economic system.

Still large market portion to capture

The sail industry has grown well in the past 10 old ages but still occupies a really little proportion of the planetary holiday market. Cruise lines accounted for merely 4.5 % of the $ 542.2 billion worth of the travel industry in 2009. While the gross for sails has declined in the US, it is turning in Europe and Asia, taking to more chances for Carnival to spread out in these parts. ( Marketingteacher, 2012 )

There is still a large market portion to gaining control ; merely 23 % of Americans has of all time booked a sail ( Interview i??. ) . There is a strong consumer demand in Europe ( Carnival Cruise Lines, 2012 ) .

Pricing based on informations analysis ( Interview Patrick Manuel )

Changing function of travel agents

Carnival Cruise Lines makes extended usage of travel agents. In their overall value concatenation the function of this intermediary takes a important function. In literature an intermediary is described as i??an economic agent that buys from providers in order to resell to clients, or that helps consumers and providers to run into and transacti?? ( Spulber, 1996 ) . Based on this definition, we can separate 2 sorts of mediators:

? Transactional mediators: those who move, shop and present physical goods

? Infomediaries: those who provide information and information services, normally associating to those physical goods and services ( Papazoglou & A ; Ribbers, 2006 ) .

In the instance of the cruising industry we can clearly specify the travel agents as infomediaries. The travel agent helps the client to book a sail, by supplying him all relevant information and different options that are available.

Due to the rise of Internet Sarkar et Al. ( Sarkar, Butler, & A ; Steinfeld, 1996 ) reference the Threatened Intermediaries Hypothesis ( TIH ) , this hypothesis talks about the beltway of mediators in the value concatenation. The hypothesis argues that on-line consumers will interact straight with online providers, doing the function of mediators redundant. However this hypothesis has besides been questioned by other research workers, who argue that this hypothesis is far excessively simple ( Schmitz, 2000 ) . These research workers point out 3 services that mediators provide, that are frequently neglected in research: stock list keeping for immediateness service intents, cut downing information dissymmetry ; and assemblage, forming and measuring spread information. During our research and interviews it became clear, that the function of the travel agents, particularly in the cruising industry is focused on cut downing information dissymmetry and assemblage, forming and measuring spread information. The merchandise that is being sold, i.e. the sail, is merely excessively complex for most people to book the whole sail themselves. The travel agent is of import in explicating the 38 different room types on board, different dining experiences, etc. Though on-line engagement additions every twelvemonth, this is largely done for the i??vanillai?? sails ; 2 or 3 yearss with limited options. For all other types of sails the function of the travel agent remains important in the procedure.

Fuel Price Hazard

Of all the issues confronting the sail industry today, lifting fuel monetary values and the demand to go more environmentally friendly are possibly the most urgent. For operators, progressively expensive fuel has had a negative impact on operating costs. Increasingly rigorous environmental ordinances have made the demand to get down utilizing cleaner signifiers of fuel an pressing affair, but doing the switch can be a dearly-won concern that could direct fuel monetary values surging ( Adams, 2011 ) . Recently Carnival and other cruising companies have imposed modest i??fuel surcharge feesi?? . These fees frequently are non evident until rather late in the sail engagement procedure, so these surcharges upset comparatively few clients and add some excess gross ( Levin, Jones, & A ; Slade, 2011 ) .

4.3 Social Factors

Social factors chiefly refer to demographic factors, which comprise factors like population growing rate, cultural facets, age distribution and wellness consciousness.

Strongly favourable demographics

Demographic displacements will determine the hereafter. Critical issues and tendencies deserve attending.

In the sail industry, the under-65 ‘s are considered i??the immature seti?? . As populations across Europe and North America age, Carnivali??s mark market is turning larger. Carnival is already good positioned to take advantage of this tendency: its stigmatization, sections, and market portion make it the best-positioned sail line overall ( Levin, Jones, & A ; Slade, 2011 ) . Tendencies are switching in the cruising industry towards the 45-60 twelvemonth old age group. As this age group grows in population, Carnival can take advantage of the economic systems of graduated table and offer them the best monetary values ( Marketingteacher, 2012 ) .

4.4 Technological Factors

Technological factors refer to mechanization, inducements, the rate of technological alteration and R & A ; D activity. These factors greatly influence other countries or facets, including the minimal efficient production degree, quality, costs, and outsourcing determinations.

Technology, and more specific Information Technology, can and must play an of import function in cruising industry reform. An interesting overview of countries where information systems can assist CI can be found in a study prepared fori??

The thought of connectivity presents

Based on a 2012 McKinsey study, i??Minding your Digital Businessi?? , half of the executives reacting position investings in digital engineering as constructing a competitory advantage in their concern. Forming this digital border requires new thought and a new attack to entree client value and do gross and consequences addressable to the organisation.

Royal Caribbean sail lines sought that border when it was constructing the Oasis-class ships ( The digital Edge ) , On these big outsize ships Royal Caribbean wanted to do certain that every invitee could bask a individualized experience while being on a monolithic ship with 1000s of other clients. First measure was puting a clear and unambiguous result i?? extinguishing the demand for lines on board. A multi-disciplinary squad was put together to place the constrictions in the procedure.

When riders check in their exposures are taken and routed to a digital profile that forms the footing for digital support of their experience on board. The sail line provides a smart card for onboard activities and purchases. The smart cards, combined with their digital exposure facilitate on- and off embarkation of the ship as clients swipe their smart cards and have their digital image verified by the quartermaster.

Once on board the ship, digital engineerings give riders greater direct control of their ain experiences via smart phone apps and digital signage. Alternatively of stating invitees where they can eat, Royal Caribbean captures each of the 24 restaurantsi?? capacity information in existent clip via shape-sensing camerai??s. This information can be found on assorted locations on the ship.

4.5 Environmental Factors

Environmental factors refer to all factors straight related, influenced or determined by the environing environment. This includes, but is non limited to endure, clime, geographical place, clime alteration and even insurance. Environmental factors can greatly act upon a companyi??s manner to run.

Strong dependence on events in the outside universe

The sail industry can be extremely impacted by events in the outside universe, such as 9/11, Costa Concordia clang, and the ash cloud above Iceland. These big, seeable accidents generate immense negative promotion, aching the sail industry as a whole.

Lower-profile jobs can besides hold important impacts. Two such jobs are viral eruptions and individuals lost at sea. Viral outbreaks typically necessitate the return of a ship to place port, a explosion of negative promotion in newspapers, telecasting, and industry web logs, and returning many riders. Overboard incidentsi?? have effects that are harder to foretell: the company is frequently faced with cases and negative intelligence narratives ( Levin, Jones, & A ; Slade, 2011 ) .

4.6 Legal Factors

Legal factors refer to all the Torahs straight connected to a concern and its country of activity, including consumer jurisprudence, antimonopoly jurisprudence, favoritism jurisprudence and wellness and safety jurisprudence.

Complex diverseness of international and federal codifications and ordinances

The sail line industry must stay with a complex diverseness of international and federal codifications and ordinances. All ships sing ports, irrespective of where they are flagged, must follow with all applicable federal ordinances. In the US for illustration, they have i??the duty for guaranting that these ships meet all international conventions and domestic demands for safety, security and environmental protectioni?? ( USCG, 2012 ) .

The Cruise Lines International Association ( CLIA ) serves as a non-governmental advisory organisation to the Ini??teri??national Maritime Organization ( IMO ) , an bureau of the United Nations. The IMO mandates planetary regula-tions for the safety and operation of sail ships. The international Convention for the Safety of Life at Sea ( SOLAS ) includes comprehensive information on safety equipment and processs.

The International Ship and Port Facility Security Code ( ISPS ) , a wide set of security demands for ships and port installations, was added as an amendment to SOLAS after the September 11, 2001 onslaughts. Conformity with SOLAS criterions and other internationally recognized conventions is monitored by both the shipi??s flag and port province representatives, which is the US Coast Guard in the US.

The Cruise Vessel Security and Safety Act contains some new commissariats and clarifies other bing CLIA policies, such as how the sail lines study allegations of offense to the US authorities.

In add-on to denote and unheralded safety reviews, the US Coast Guard yearly conducts a Control Verification Certificate scrutiny for every sail ship that ports in the US for conformity with both federal and international ordinances ( Cruiseindustryfacts, 2012 ) .

With merchandises as Electronic Health Records and medical charge services, the Cruise Industry has to follow with the Health Insurance Portability and Accountability Act ( HIPAA ) , the primary jurisprudence that establishes the US legal model for wellness information privateness ( US Department of Health & A ; Human Services, 1996 ) .

5. Carnival Cruise Lines SWOT Analysis

When we combine the 3 theoretical accounts as discussed in chapters 2, 3, and 4, we can deduce strengths, failings, menaces and chances ( SWOT ) for Carnival Cruise Lines. The below image indicates conceptually how we have used the 3 different theoretical accounts to finally deduce the specific SWOT analysis of Carnival Cruise Lines.

Figure Ten: Combination of 5 forces theoretical account, 7-S theoretical account and PESTEL analysis

The information of the 5forces theoretical account of Porter gives input to all 4 countries of the SWOT analysis. The information of the 7S theoretical account gives input, since iti??s chiefly concentrating on the internal set up of the organisation, to the strengths and failings of Carnival Cruise Lines. Last, the PESTEL analysis gives input to the chances and menaces to the organisation. As already mentioned in chapter 3, gives the PESTEL analysis a more in deepness penetration what external forces can hold an influence on the sail industry as a whole and Carnival Cruise Lines in particular.

Concluding, figure Ten shows the specific strengths, failings, chances and menaces of Carnival Cruise Lines. This SWOT is the synthesis of all the information provided in chapter 2, 3 and 4.

Strengths Failings

? IT is incorporated in the company consequences

? Focus on nucleus procedures

? Increased cyberspace capacity on the ships

? Consumer outreach plan can take to economic systems of scale versus travel agents

? Loyalty plans are in topographic point

? Strong security administration, good models, security is embedded in all other procedures

? Talent development plans in topographic point

? Family-like direction manner

? Easy to make concern with ( from travel agent position )

? Strong acquisition scheme

? Dominant market portion

? Operational excellence and experience

? Comprehensive portfolio

? Strong fiscal place

? Promote life style of each mark group? Decentralization of concern operations

? Lack of terminal to stop overview of the undertaking portfolio

? No prioritization procedure in topographic point

? No Entire Cost of Ownership in topographic point for IT

? Weak resource direction

? Complex merchandise which has an impact on online ordination and demand for good relation with travel agents

? Legacy systems

? No benefits tracking in topographic point

? Poor safety record

? Over-dependence on the US Market

? No integrated CRM system

Opportunities Menaces

? Turning Asiatic market

? Benchmarking is hard within the sector

? Technological developments in satellite connexion

? Role of travel agents is altering


? Still large market portion to gaining control ; merely 23 % of US population has of all time taken a sail

? Pricing based on informations analysis

? Profitable concern

? Strongly favourable demographics

? Complex diverseness of environmental, wellness and safety statute law

? Multiple trade organisations are in topographic point

? Changing consumer tendencies, both societal and technological

? Technological development in satellite communicating

? Increasing fuel monetary values

? Floating hotel with independent IT

? Changing consumer demands, i.e. BYOD, connectivity )

? Strong dependence on events in the outside universe ( 9/11, Costa clang, ash cloud above Iceland )

? Conformity to a complex diverseness of Torahs and ordinances ( planetary company )

? Competing with the whole leisure industry which consequences in different challenge and higher cost for IT

? Strongly competitory industry

? Speed of technological alterations

? Outsourcing degree 2 & A ; 3 support hard because of really specific cognition

? Decreasing net income

? Hugh hard currency escape

? High fuel monetary values

? Geopolitical instability

? Tax loopholes

? Global economic recession

? Overblown media attending when something happens on a sail ship


Figure Ten: SWOT analysis of Carnival Cruise Lines

Based on this SWOT we can reason that Carnival Cruise Lines is active in a really competitory environment. The demand for cost consciousness combined with uninterrupted invention in order to present the client experience in important. In the undermentioned chapter we will travel deeper into the strategic IT choices we think Carnival Cruise Lines should take to maintain their dominant infinite in the market, or even turn their market portion.

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