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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 effective. Revenue was strong, then the corona virus undercut the entire industry. Now, profits are tight and competition stiffer. The situation is very serious.

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:

• This is an opportunity to re-focus the company for the time – soon we hope – that the pandemic will recede and companies can get back to normal.
• Make sure you find out how Carnival is performing compared to the other major cruise lines. Look at Yahoo Finance and the Wall Street Journal. Be specific! There are plenty of expenses to cover.
• Make an overall assessment of the situation including the status of the cruise industry and the actions of competitors.
• How can Carnival improve its STRATEGIC 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.
• Do not roll out SWOT analysis of go to blogs that offer vague advice.
• 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.
• Make sure to apply concepts from the course: Product/Market Matrix, Driving Force, etc.

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:

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

1. Go to the Wall Street Journal and other credible business sources to learn about the industry. Do not use Wikipedia, Investopedia or blogs.
2. Find out strategic ideas that seem to work for others. Learn the problems your competitors face. Look for proposed solutions.
3. Do not use blogs or opinions. Get the facts.
4. Develop sound ideas for a detailed plan. The plan should spell out timing and cost.
5. Apply concepts from the course: Driving Force, real capabilities of the firm, etc.
6. 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.

A few tips for sharp MBAs:

1. Remember that you are working for company management. Do not set yourself up as smarter than they are. Do not fall into the trap of telling them to shift direction without solid evidence. This would not be smart or strategic. They do not have the money or skill for such a shift.
2. Avoid expressions such as “I think” and “I feel.” This is a Master’s level course in a business program. Personal feelings are less important than FACTS and the ability to protect the company.
3. Begin to work on your paper well before the deadline. It would not be a good idea to react to the case. Think about it; understand the issues involved.
4. It is strongly advised that students grasp the central problem in the case. This is the single most important issue the company is facing.

Keep these ideas in mind for all papers in the course including the Integrative Project.