Case 2: Carnival Cruise

Case 2: Carnival

Carnival Cruise Lines: This company has had its image damaged severely by mishaps, bad publicity, angry customers, etc. Competition is stiff and in a shock to Carnival management, people have more money than they ever had before and demand better and better service. Customers are also smart! Slick advertisements are not going to convince them that a product has high quality. The Super Bowl ads may not have been so effective. Revenue is strong, but profits are tight and competition stiffer. The situation is very serious. Of course, the corona virus has but deeply into the company’s plans. But, management must think of the future and plan accordingly.

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On the other hand, this is an opportunity to think strategically. Consider yourself an MBA working for the company. How could you propose a strategic solution to its challenging situation? Please consider the following:

How is Carnival performing compared to the other major cruise lines? Look at Yahoo Finance and the Wall Street Journal. Be specific!
Despite the problems of the pandemic, competitors may be taking actions that will generate results when the c crisis dies down.
Make an overall assessment of the situation including the status of the cruise industry and the actions of competitors.
How can Carnival improve its situation by adopting or achieving an effective strategy? Strategy is not operations.
Provide a general strategic assessment showing how the company can improve. Provide a specific plan with annual goals.

 

Things to keep in mind:

This is a course in strategy. Apply strategic concepts from the course. Look at the textbook and follow your class notes/class discussion. Read about the topic as much as you can. Go immediately to The Wall Street Journal. If you miss a major development, your credibility will be shot.
Use Street Smarts. Think of Carnival management as smart. So, treat them as experienced and knowledgeable. Give advice based on careful analysis and your best thinking.
Find out what the more successful cruise lines are doing and apply their ideas. But, use common sense. Carnival cannot sell its ships or copy unfeasible ideas from other cruise lines. Profits are tight.
Produce a well-written paper of at least five pages that is suitable to show senior management.

 

Things to avoid:

Do not provide an operational solution. Do not propose a marketing plan. Do not tell them to repair their ships. Marketing and repair are operations. Your paper will not earn a grade.
Do not tell them to create a strategic plan. That is your job!
Do not fill your paper with useless information such as company history, material from blogs or other unfounded opinions. For example, Carnival does NOT compete with more expensive cruise lines.
Open and end your paper with dramatic content. Busy executives do not want to read company history. They want NEW, EFFECTIVE ideas.
This is the second paper in the course. Use your research skill and the full resources of the college. Do not copy from sources without showing that you copied. That is plagiarism, a serious offense.

 

Other Important Directives:

1. Read the case five times to understand your role. You must work hard on this problem.

2. Go to the Wall Street Journal and other credible business sources to learn about the industry. Do not use Wikipedia, Investopedia or blogs.

3. Find out strategic ideas that seem to work for others. Learn the problems your competitors face. Look for proposed solutions.

4. Do not use blogs or opinions. Get the facts.

5. Develop sound ideas for a detailed plan. The plan should spell out timing and cost.

6. Apply concepts from the course: Driving Force, Product/Market Matrix, real capabilities of the firm, etc.

7. Do not write a paper saying that you cannot choose a direction or otherwise failing to present a solution. Management looks at you as someone who has learned about corporate strategy and grappled with business problems.

Use all of the “street smarts” at your disposal. If you insult one of the top managers, you may get fired. You will also put your boss in a bad spot. The other senior managers will blame him or her for selecting you for the task.

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