Royal Caribbean 27% share in North America and 22% share in world market, Disney 2% in North America, and Norwegian Cruise Line 10% of North America and small market share in Europe. Other companies competed with Carnival brands in other select locations and particular market segments. Consumers can seek out the competition without switching costs if they can find better deals with similar products and locations that Carnival offers. Potential of New Entrants Into an Industry New entrants can enter the industry but several barriers of entry exist. These barriers of entry can be challenging on new entrants depending on the laws and policies of the registering country. The new entrant will have to research all the laws, treaties, policies, regulations and permits needed to operate in the regions chosen. One particular barrier is that other cruise line companies might have longer operating history and reputation, thus having a brand awareness. By having this reputation, these companies have developed their brand awareness and loyalty. Consumers might choose these companies over up and coming companies since this brand awareness creates loyalty and a sense of security. The sense of security is very important since a known brand might create a vision to consumers that these vessels may be safer and secure due to their operating history. These other successful companies have captured a good chunk of the market share that will make it difficult for the new entrants to capture. The asset of having brand awareness might be considered a barrier for new entrants entering into the leisure cruise vacation industry.
10 Power of Suppliers Suppliers play a huge role since a cruise without supplies is a ship that will not be able to move from port. The authors Keeffe, Ross III, Ross, Middlebrook, and Wheelen (2010) stated, “ The company’s largest purchases were for travel agency services, fuel, advertising, food and beverages, hotel and restaurant supplies and products, airfare, repairs and maintenance, dry-docking, port utilization, and communication services” (p. 13-12). The power of suppliers is low since Carnival used a select number of suppliers that offered them volume discounts instead of the numerous other sources that were offering competitive prices. The company believed that there were enough dry dock and shipbuilding facilities to meet their needs. These facilities were mostly located around the company’s operation in the Bahamas, British Colombia, Canada, the Caribbean, Europe and the United States. Power of Customers Customers have a myriad of options when its comes to the leisure cruise vacation industry. Carnival’s brands cover most of the customer segments in the industry to accommodate the contemporary, premium and luxury. Customers in the leisure cruise vacation industry have bargaining power in a market where there are similar products and services without suffering any cost to switch companies. This bargaining power decreases as customers find it more difficult to switch companies, thus causing the consumer more time to find a replacement. When there are more competitors with similar products and services
You've reached the end of your free preview.
Want to read all 17 pages?
- Summer '19