Leisure-Cruise Industry

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Recommended: Importance of the cruise industry summary

The main entry barrier is the high capital requirement. It is difficult for new companies to enter the cruising industry because of the financial resources needed to purchase a ship and the high cost of maintaining and managing the ships. There are a few cruise shipbuilders in the world so the purchase prices are high. The market is dominated by a few major companies which makes it difficult for a new operator to enter the industry. A third barrier is switching costs. Cruise line companies offer their existing customers membership programs with deals and discounts, which make the customers reluctant to switch to a different company with higher rates. For example Carnival Platinum Card is given to customers for their tenth cruise. Among the benefits are included “priority embarkation, personal guest service staff and personalized stationery”(carnival.com). A fourth entry barrier is the very high product differentiation. Comparing to the traditional vacation packages, the cruise industry is selling a very unique product: the cruise experience. With three market segments: contemporary, premium and luxury the cruising industry offers a variety of products and services for every type of customer. For example, Carnival offers single cruises, but Disney Cruise Line is a more family oriented cruise line offering cruises for adults, children and teenagers. Fifth, the entry barrier is low due to the more stringent environmental regulations imposed by the regulatory bodies that oversight the cruise industry both in the US and abroad. Rivalry among Existing Firms: High The rivalry among existing cruise lines is high because of the highly competitive industry. The cruising industry is controlled by a few numbers of companies (close to mo... ... middle of paper ... ...uring the economic recession but they are recovering slowly with the stock price going up in the past years. The leisure-cruise industry is one of the fastest growing sector in the travel industry. It offers customers a unique cruise experience at a low price. The industry is estimated to continue to grow its sales and profitability in the future with the help of new competitive strategies. Works Cited http://www.cruising.org/pressroom-research/cruise-industry-source-book/profile-us-cruise-industry http://en.wikipedia.org/wiki/Royal_Caribbean_Cruises_Ltd. http://www2.ncl.com/about/leadership-team http://cruises.lovetoknow.com/wiki/Cruise_Vacation_Benefits http://www.entrepreneur.com/tradejournals/article/149214179.html http://ncseonline.org/NLE/CRSreports/07Dec/RL32450.pdf http://www.prweb.com/releases/cruiseship/injurylawyer/prweb8226937.htm

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