A Strategy for Costa Cruise Lines - Case Study Example

A Strategy for Costa Cruise Lines Name Institution A Strategy for Costa Cruise Lines Introduction The Costa Cruise Lines is part of the largest cruise ship company in the world commanding over 52% market share. The Costa Lines has managed to establish itself in the competitive luxury and leisure, travel provision industry by focusing on its brand as an Italian-style. The company’s Italian heritage brand is evident in the festive atmosphere on board coupled with dynamic entertainment, and cuisines to its guests. The Costa Cruises mother company has their success span for over 63 years, and to date it boasts to having the largest fleet in Europe with 15 ships. The fleet offers the chance to visit over 250 destinations every year across the globe ensuring the Costa remains a top contender in the industry. Thus, this section is an analysis of the organization’s mission, vision, central values, working guidelines, core capabilities, and goals that have played part towards contributing to its superiority in the industry. Analysis of the Organization Mission of the Organization Costa Cruise Lines mission has been and is still is to deliver an exceptional vacation experience via its cruise ships catering to an Italian-style with an accommodation of various budgets both on land and at sea. As such, on board these fleets you will find every comfort, suitability, and facility that one can think of. The company has over time ensure its mission is realized by catering for families by offering an elaborate kids program offering various age appropriate activities such as, art and crafts, sporting activities, and evening parties targeted on kids between the ages of 3 and 17. Costa Cruise Lines vision remains to take the world on holiday delivering brilliant experiences that will intern appeal to a wide array of consumes cross Europe and do so at an outstanding value. The management believes the multiple brands held by their fleet will be essential towards the organization attaining its mission and maintaining its leadership position in the market. The organization strategy owes its success to their ability to understand their guests’ needs and consistently exceeding their expectation via the provision of exceptional vocational experiences. Vision of the Organization Costa Cruise Lines vision is setting out to deliver consistently fun and memorable vacations at an unbeatable value to its clients. As such, the organization strives to capture a great share of the consumers’ spending on vacations by offering exceptional cruise products and services, at an exceptional value (Carnival Corporation strategy report, 2012). Organization's Core Values and Operating Guidelines The firm’s core values are elaborate in the organization’s vision statement, which is Fun, Memorable, and Value. Therefore, the company has made it a part of its operational culture to continuously emphasis on ensuring that the different guests aboard their fleets are offered the fun that best fits them. As such, they are always looking for ways to expand the experience offered by adding new restaurants, events, shows aboard their fleets. In addition, the management regularly upgrades the existing ships and adds new ones to the existing fleet. The memorable moments on the ships starts with a selection of a special team, which is proudly dedicated towards the delivery of the best quality, services, and hospitality to the large number of guests on board (Kwortnik, 2006). Nevertheless, there are problems that conflict with the organization’s core values and operating guidelines in the modern day. Some of the conflicting issues include the minimal returns on huge luxury investments on the different ships; this can be blamed on the decreasing market in the industry. Secondly, there has been an increase in completion from rival cruise lines putting a burden on the cruise management and staff towards the deliverability of unique, fun, and memorable moments and activities aboard their fleet. Costa cruise lines have to a smaller extend also faced hindrance towards meeting its core values poor safety at sea and uncoordinated business operations (Carnival Corporation strategy report, 2012). Organization’s Core Competencies The company thrives on core competencies such operational excellence and experience. Costa Cruise Lines has over time achieved both lower the industry usual costs and above average cost. This has been because of the huge accumulated years of experience by the company in owning and operating cruises. This competence allows the organization to expand to new markets with ease. The organization has huge pool of data that it refers to in order to decide what works and what has failed before. In addition, the organization has the most experienced markets in the industry allowing them to establish a wide customer base in a more efficient manner than their competitors. The organization’s biggest competence lays in its dominance in market size in both Europe and America. The dominant market share gives the organization immense power over the cruise industry allowing the company to undertake big projects that in turn grow the company such as enabling negations with major cruise ship manufacturers (Levin, Jones, and Slade, 2012). Low or Unsatisfactory Customer Service Scores In line with various industrial surveys conducted in the cruise industry, they revealed the industry and in this case, Costa Cruise Lines continues to receive higher guest satisfactory rates owing to their unique vacation experiences offered to their clients. Thus, high rating or low unsatisfactory customers scores are because of visiting various destinations with the comfort if having not to pack and up-pack, their all-inclusive products offered in the state of art cruise ships with an array of entertainment, relaxation, and fun filled activities at a remarkable value (Kwortnik, 2006). Analysis of the Organization – Organization-Level and Business Unit Strategies  Organization-level strategies According to a 2012 Carnival Corporation strategy report, Costa Cruise Lines have the target markets of Europe mainly focusing on Italy, France, and Germany. The mass-market segment is grounded in Genoa, Italy with Costa Crociere being the top voyage corporation in Europe and South America. The organization operates over 15 fleets of modern ships. The organization works offers its clients excellent services pushed by strategic motives. The organization wants to present across Europe mainly focusing on the Caribbean, Canary Islands, Mediterranean, and the Panama Canal. Costa Cruise Lines seeks to meet the needs of their clients for all income levels driven by the notion everyone deserves a fun filled vacation (Levin, Jones, and Slade, 2012). The various cruises offer the organization market power, helps in risk reduction, and advance the overall tangible and intangible resources. The organizations intangibles, expertise, their teams, their first in the industry are foundation of Costa Cruise core competencies. These competences enable the organization to save time, resources, and money in the end the strategy ensures competitiveness and increased financial returns. In addition, the Costa Cruise lines are able to be the competition with the vast number of areas it serves and the huge size of the firm. Business Unit Strategies According to a Carnival Corporation 2012 strategy report, the organization has adopted a three-cruise strategy. The first category is the contemporary cruise that is designed to cater for value packed vacations. The contemporary targets passengers of all ages looking forward to various activities. The sizes of ships in this category are generally large, offering lots of space, sporting activities, and spas among other options. The category is family friendly, and the duration of the cruise is shorter stretching up to seven days. The second unit strategy is the premium cruise. Under this class, there are more emphasis on quality, comfort, and style making it more expensive the contemporary category. Additionally, the cruise takes up more time covering between seven to fourteen days. The third and final category is the Luxury cruises. Under this category, Costa offers the highest level of services and quality. The luxury category is also the most expensive offering accommodations and higher service standards. The durations of the cruise are generally longer, and the ships are smaller compared to those in the other two categories (Levin, Jones, and Slade, 2012). Strategies Alignment with the Organization’s Goals The goals of the organization are offering fun and memorable vacations at an unbeatable value. In order to do so, the organization offers product with prices comparable to those offered on the land based vacations that are sold by travel agents. Therefore, Costa cruise Lines packages are include activities, entrainments, and meals that are often priced below those offered at theme parks. These ensure their clients enjoy the feeling of being on all-inclusive and hassle free experience. Some of the experiences aboard the Costa Cruise Lines include exquisite dinners, the finest wines, night entertainment that includes live music, dancing, and gambling (Levin, Jones, and Slade, 2012). Strategy Comparison with those of the Competition Costa Cruise Lines faces competition from such major passenger cruise lines as the Royal Caribbean Cruises, and the Norwegian cruise Lines. The two companies take up about 30% of the cruise industry using the similar strategies as the Costa Cruise Lines of offering Luxury cruise experiences to various destinations. Nevertheless, Costa is part of the bigger corporation the Carnival Corporation that operates a fleet of over 100 ships, which is more than that operated by the Royal Caribbean Cruises of only 41 ships. These ensure that Costa Cruise Lines has a competitive advantage over her rivals due to the scale (Kwortnik, 2006).  SWOT Analysis – Developing New Market Segments Strength The Strengths of Costa Cruise Lines include its association with the world’s most popular cruise lines the Carnival Corporation that also commands the largest cruise line in the world in terms of passengers carried, generation of revenues, ship capacities. Costa cruise are also consider the leaders in terms of innovation in the cruise industry. The fleet also offers all the accommodations of a land vocation in a single ship. Weakness The cruise industry is experiencing a decline in its growth rate, a lack of interest in foreign countries for cruising, and the industry will only appeal to a specific market. Opportunities The market is expanding to different areas and locations; there is the opportunity of appealing to the lower income earners by offering cost conscious packages. There is also an increased interest in cruising creating more opportunities for the industry. Threats The decreasing market might make it hard for cruising companies to attain returns on investments, and the organization faces more competition from alternative cruise lines. Advantages of developing new market segments The organization will increase its competitive advantage and capture a bigger market audience that intern will translate to bigger returns. The cruise company can take advantage of the age bracket of between 45-60 years who are now turning to cruise luxuries for vacations. Disadvantages The company may invest heavily and fail to get the expected returns owing to such factors as increased terrorist attacks and pirates at sea that discourage individuals taking the vacations. Still the industry might be affected by bad weather making the new investments a waste of resources. It is expensive to advertise new products in the cruise industry considering the multiple times and different avenues of advertising. Reference Levin, B., Jones, J., & Slade, T. (2012). Carnival Corporation Strategic Report. Griffin Consulting Group. Kwortnik, R. J. (2006). Carnival cruise lines burnishing the brand. Cornell Hotel and Restaurant Administration Quarterly, 47(3), 286-300. Read More