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which are cheaperBargaining Power of Buyers:-Highly affected by word of mouth-Travel agents have major influence-Low bargaining power because of fixed costs and destinations-Buyers have the most power when choosing between cruise linesRivalry Among Competitors:-Travel agents work to compare a lot of cruise lines-Cruises may lower prices or advertise sales-Additional perks may be added to stand out-Cruises will become specialty cruises which allow them to target a specific marketThreat of New Entrants:-Low barriers to entry, but a lot of capital is needed-Threat of new entrants is low-Policies for international waters-High cost of fuel and advertising-New entrants pose a threat to small cruise linesThis industry is most threatened by their potential substitutes because leisure cruises only account for 2% of vacations. Since their market share in the vacation industry is so low they focus on maintaining their current customers while attracting new ones.
7) Value Chain-Travel agencies-Online bookings-Transportation providers-Port authorities-Terminal operators-Embarking/ disembarking operations-Ship operations/ maintenance-Baggage handling-Security-Customs-Safety inspection-Baggage system-Ports-Excursions-Issuing boarding passes-Promotion-Travel agent-Group sales-Advertising-Analyzing competitors-Knowledge of trends-Customer Service-Focus on hospitality-Food and drink services-Room maintenance
7) Value ChainMost important upstream partners-The fuel suppliers are very important because of the new rule regulated by EPA that requires the cruise lines to buy a fuel that has less sulfur in it but is more expensive-Travel agents are also extremely important because they have a lot of power when dealing with cruise line customersSubstitutes-As mentioned in the five forces analysis, any other vacation could be a substitute for a cruise-Beach resorts are the popular alternative for cruises because they offer all inclusive services at a destination of choice
8) Power of the PlayersThe customers have the most power in the cruise line industry. Since only 2% of vacations are cruises, cruise lines need to make an extra effort to stand out to their customers especially because they all offer such similar experiences. This is where the travel agents play a large part in the industry as well. Approximately 68% of cruises are booked with an agent, so a lot of the cruise line’s sales are somewhat out of their control.