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Power of Suppliers:Carnival Cruise Lines heavily depends on its suppliers and the success of its suppliers.Without its suppliers, the cruise line will be deprived of many essential products and servicesthat it needs to be successful. Hence, we can conclude that Carnival’s suppliers have aconsiderable amount of power because if these products and services are not offered, it willpresent grave detrimental repercussions for the cruise line. For example, essential supplies andservices such as repairs, maintenance, fuel and port facility services are offered at some of itsports of call from many suppliers. The case mentions that the company performed major dry-dock and ship improvement in a number of its dry dock facilities at some major country portslike The Bahamas, British Columbia, Canada etc. Suppliers of these dry-dock ports in particular, have extreme power in their hands to driveprices up simply because Carnival needs their unique services in a timely manner and accuratemanner. In essence, these products and services are extremely unique and require expertise. As aresult, these suppliers have the power to drive up prices and cause Carnival to experience andincrease in its input and supply costs. However, suppliers of travel agency services, advertising,food and beverage, hotel and restaurant supplies and airfare have less power simply becausethese products and services are not as unique to the above mentioned services and thus CarnivalCarnival Cruise Line Case Analysis Rolle | Rizo | Alcindor10
has many outlets that it can choose from in regards to selecting a new supplier for these productsand services.Bargaining Power of Customers:Customers of the Carnival Cruise Lines Corporation have little to no bargaining power.Why? This is because Carnival has an extremely large customer and potential customer base. Asa result of this, customers are unable to influence the corporation to drive down its prices orcreate new products and services because it has no power over the corporation as do customersof a firm who has an extremely small customer base. This is because firms with an extremelysmall customer base heavily depend on their customers’ business and aim to please each andevery customer in fear of losing them. However, established firms such as Carnival, lack to give their customers the bargaining powerthey want because there are so many customers that they have to choose from and offer servicesto, that it is not a prevalent issue for them whether some customers in a particular demographicor region prefer a lower price or a new product/service. In addition, Carnival Corporation isalways innovating new products/services which helps to reduce customer bargaining powerbecause customers will be less likely to ask for discount rates and/or lower prices if they feel thatthey are getting their money’s worth with existing products/services.