Management of the Cruise Industry - Case Study Example

Part 1 Who are the major players in the North American cruise industry? Carnival, P&O Princess, Star Cruises Group and the Royal Caribbean Cruises are the leading players in the North American cruise industry, where in the year 2002, the Star Cruises Group accounted for 69 percent of the total passenger capacity. Currently, P &O Princess has been taken over by the Carnival, which reached over 79% of the total capacity in 2006. By the end of 2010, the top three main players had increased their total capacity to 81 percent. Later, MSC Cruises emerged as the fourth key player in the year 2010, hence cutting down the top three main player’s share. Allure Cruise Line is a small North American Cruise line that currently has only three ships in its fleet. Moreover, the company is planning on adding new ship and itineraries in the upcoming several years. What are the business statistics about these players? Assets size? Fleet size? Passenger volume? Crew to passenger ratios? Where are they located? Organizational structure? The Royal Caribbean Cruises was founded in 1968 by Anders Wilhelmsen & Company, a shipping company. It is located at Miami in Florida and has more than 8,500 employees. This company was most successful in the year 2008. The company also continued with an increase in passenger capacity, though the net revenue remained in line with the high levels reached in 2008, with its passenger occupancy increasing by 20%. Carnival was founded in 1974 and holds more than 10,000 employees. It is a public company located in Miami. In the year 2008, the company operated 85 cruise ships with a passenger capacity of 158,352 and operated in North America, Europe, New Zealand and Australia. This was the company collected total revenue of 12,000 dollars, which is about 7% of the total revenues collected by the shipping industry. Star Cruise Group is the third largest shipping company in the world and was founded in the year 1993. It is this company that has greatest control over the Norwegian Cruise Line as it fully owns NCL. NLC was founded in 1966 and is most recognized as its fleet offers revolutionary cruising services that are unique. It is a subsidiary of Star Cruises and has its headquarters in Miami. It has a fleet of 12 ships, with a capacity of over 25,000 lower berths in service. All the cruise lines have got almost a similar organizational structure. It comprises of a Chief Executive Officer and other managerial personnel. In addition, junior staff members are also part of this structure but report directly to the departmental managers. The executive vice president of operations is responsible for the overall operations in exclusion of those dealing with hotel services. What are the route structures? Where do they sail to? Route structures are mainly the direction followed by a ship, which also includes departure and destination ports. The Royal Caribbean Cruises has 9 U.S. departure ports and over 170 destinations. Some of the European destinations include Eastern Mediterranean, Rome, Turkey, Greece, Barcelona and Croatia among the others. Both the NLC and Orient Lines operate in North America, Europe, Asia, South America and the United Kingdom; while NLC America operates in Hawaii by offering inter island cruises only. Where are these major players flagged? Where are their corporate offices? Where are their operating offices? Carnival is flagged in Panama and has its headquarters in Doral, Florida. NLC, being fully owned by Star Cruises has its corporate offices in Hong Kong. However, NLC has several operating offices which include: Australia, USA, United Kingdom, United Arab Emirates, Taiwan, Thailand, Singapore, Sweden, Philippines, Malaysia, Korea, Japan, India, China and New Zealand. Royal Caribbean Cruise is flagged in Bermuda and has its corporate offices at Miami. What are the plans for expansion for the major players? These outstanding players mostly concentrate on improvement of technology and provision of high quality services and amenities. Moreover, most cruise lines focus on buying more vessels and opening more operational offices so as to expand their client base due to the increased number of destinations. What factors distinguish the major players from one another? The key differentiating factor among cruise lines is the market niche occupied by each company. They are also distinguished by the way they carry out their marketing, brand image and their constant innovations. What is the shipboard organizational structure? What types of positions are on these cruise lines? There is the chief captain who is the overall master of the vessel, staff captain, hotel director who is in charge of hospitality services and a chief engineer who deals with any problems that might arise while on board. Positions available on the cruise line include cleaners, deck and engine crew workers, waiters, waiters’ assistants, room stewards and supervisors. What is the historical perspective of the cruise industry? Who were the first lines? What were they like? Is there any correlation with the cruise industry and other organizations? The modern cruise industry was started over 40 years ago, with the development of the North American industry. The first ship built exclusively for cruise purposes was the Prinzessin Victoria Luise, which was completed in the year 1900. It was designed by Albert Ballin, the general manager of Hamburg America Line. Albert Ballin was the first to send his transatlantic ships out. Later on, Ocean Liners added luxury ship with Titanic being the most famous. This dynamic sector has been diversified to offer products and services as well as entering new markets, hence an average annual growth rate of 8.5%, in the last 20 years. In terms of capacity, around 40 new cruise ships were built and started their operations (Younger). In the 1990s, 80 other cruise ships were put into operation, and this growth was also seen in 2000, where the increase was 40%. This was also followed by an additional 25% of new state- of- art vessels that replaced the ships that were withdrawn in 2006. There exists a correlation between cruise industry and other organizations in that their relationship is interdependent. For instance, fuel organizations, shipbuilders and technology developers. What are the major laws that the cruise industry need to abide by? Are there any laws specific to operating in North America/ the United States? The major laws that a cruise industry need to abide by are those related to safety of the passengers, labor laws, taxation and marine environment. The Canadian government has put in place laws to help control disposal of solid waste and sewerage water into the ocean by these ships. The government also signed a memorandum of understanding with the cruise industry on Environmental Guidelines for the Operations of Cruise Ships in Coastal Areas. There are also needs to control emissions related to poisonous chemicals and oily bilge. What is the state of the cruise industry? Is it growing or shrinking? How does the world economy and political climate affect the cruise industry? How does this affect fleet employment and route selection/ ports of call? The cruise industry is growing rapidly as it has tripled its expansion since mid 1990s. This rapid growth is as a result of rapid cruising among the Europeans, Asians and Latin Americans. The industry recorded a 30% increase in international passengers annually. Changes in the world economy and political climate affect the cruise industry in that where there are wars; the cruise ships cannot visit those destinations (Wind Rose Network). Part 2 Discuss some of the key factors that influence the morale of the crew. What recommendations do you have for the leaders on board to help improve the morale of the crew? Ethnicity is one of the factors that influence the morale of the crew. For instance, some crews have their meals dictated by their origin. It was discovered that every ethnicity wants attention, hence this factor was put into consideration. Employees’ social life is also a broad factor to consider. This includes gender, age, marital status and work environment. While some younger members of the crew like partying, the older ones are not comfortable with this. Moreover, some junior staffs who are men do not respect women officer, simply because they are women. Allure Cruise Line tries to make sure that a married couple is put in one room, while on a cruise. Many crew members work for long hours, so they feel tired and lonely as they are kept away from their families for a long time. Food served on board and entertainment also affects the morale of the crew. All types of foods should be served in the dining messes. Older crew members should have their rooms situated far from the disco halls and casinos, since they tend to dislike partying. Married crew members should always stay in one room while on board, unless they are cruising at different time. The company can come up with a program where each crew member is allowed to live with a family member in the employees’ quarters. Entertainments such as holding a cruise party and taking them for holidays at unique destinations make them feel appreciated. Discuss the communication challenges on board. How could these communication issues be improved? There are communication barriers on board because crew members are from different countries and races. In addition, the same challenge might be manifested between crew members and customers. The company should ensure that all its three vessels are fixed with a decoding device, which will help in language translation to one that suite the communicating parties. What recommendations do you have for the leadership team of Allure to help improve the dissatisfaction of the crew with the variety of food that is offered in the mess hall? The leadership team should ensure that different types of food are prepared so as to suites each and everyone’s preference. If it is costly to do so, different dishes can be prepared on different days so that everyone’s preference is catered for on a different day. This will help cut down on the expenses of preparing many dishes at the same time. Discuss some of cross cultural challenges among the Jamaicans and Filipino crew members. How might this situation be improved? The Filipinos like karaoke while the Jamaicans like loud music. Moreover, the Filipinos are quiet and collective as they like staying together. This is not the case with the Jamaicans as they are rough and individualistic. People from these different countries have different perceptions about life, whereby the Filipinos feel disrespected by the Jamaicans. The Filipinos also can form their own group in exclusion of others. These can be overcome by sensitizing and encouraging crew members to socialize with each other. This will ensure that they will come to learn and appreciate each one’s culture. Discuss the problem with the mafias on board. What specific recommendations do you have for the leadership team of Allure to address this problem? This issue concerns what happens in the dining rooms. This occurs when those in the leadership positions here, tend to favor people from their own country. In every vessel, all the crew members should be from different countries and races, where possible. For any promotion to take place crews should undergo rigorous training, sit for a test and whoever passes gets a promotion. Does this case study relate to the contemporary business environment? If not. Why? If it does, how? This case study relates to the contemporary business environment quite well. All the factors and social challenges facing this company are the same issues faced by a normal business in a contemporary business environment, as a result of dynamism. Works Cited Wind Rose Network. The Cruise Industry. 28 July 2012 . Younger, Julian. Linking to the Cruise Industry. November 2008. 29 July 2012 . Read More