Power of Suppliers Carnival Cruise Lines heavily depends on its suppliers and

Power of suppliers carnival cruise lines heavily

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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 services that it needs to be successful. Hence, we can conclude that Carnival’s suppliers have a considerable amount of power because if these products and services are not offered, it will present grave detrimental repercussions for the cruise line. For example, essential supplies and services such as repairs, maintenance, fuel and port facility services are offered at some of its ports 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 ports like The Bahamas, British Columbia, Canada etc. Suppliers of these dry-dock ports in particular, have extreme power in their hands to drive prices up simply because Carnival needs their unique services in a timely manner and accurate manner. In essence, these products and services are extremely unique and require expertise. As a result, these suppliers have the power to drive up prices and cause Carnival to experience and increase 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 because these products and services are not as unique to the above mentioned services and thus Carnival Carnival Cruise Line Case Analysis Rolle | Rizo | Alcindor 10
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has many outlets that it can choose from in regards to selecting a new supplier for these products and 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. As a result of this, customers are unable to influence the corporation to drive down its prices or create new products and services because it has no power over the corporation as do customers of a firm who has an extremely small customer base. This is because firms with an extremely small customer base heavily depend on their customers’ business and aim to please each and every customer in fear of losing them. However, established firms such as Carnival, lack to give their customers the bargaining power they want because there are so many customers that they have to choose from and offer services to, that it is not a prevalent issue for them whether some customers in a particular demographic or region prefer a lower price or a new product/service. In addition, Carnival Corporation is always innovating new products/services which helps to reduce customer bargaining power because customers will be less likely to ask for discount rates and/or lower prices if they feel that they are getting their money’s worth with existing products/services.
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