1. Applying Strategic Planning Process for Cruise Industry
Background History
Cruise industry is the most growing in terms of tourism and hospitality sector after it lost its reputation during
world wars. The earliest ocean-going vessels operated merely for cargo purpose rather than for passengers.
However, Black Ball Line in New York operated its first passenger ship in 1818 from New York to England
and in 1822 (P&O) operated its first steamed ship mainly for passengers and mail transport. Also in 1840
Cunard launched its first ship on 14 days transatlantic crossing. Ever since growing demands of passengers,
comfort was also taken care by providing lights on the deck. In 1920 Germany introduced floating hotels
keeping into consideration guest comfort and luxury. As a result, more companies were emerged in the market
with more modern concept like spacious, elegant accommodation swimming pool etc. But during world war
1and 2 the cruise industry was devastated as those ships were used for transporting troops from one country to
other and the companies went bankrupted. But after 1960 the concept of cruising industry again emerged and
more luxury ships were built and focus were on vacation trips. Moreover, many giant companies entered into
the fleet of cruising industry making the market more versatile and competitive. (Grace, 2008).However, cruise
industry started to take a new phase late 1960s and early 1970s with concept of accommodating more
passengers on each voyage as a result giant companies like Peninsular & Oriental steam navigation company
[P&O], Royal Caribbean Cruise Liners, Cunard, Carnival etc targeted mass market with maximum capacity as
earlier cruising was only concerned for elite class. (Rodrigue & Notteboom, 2017)
Major Challenges and Threat
There are many challenges that cruise industry has to face time to time in terms of passengers and environment
safety. The major points as mentioned below: -
Norovirus: - The major challenges which cruise companies has to face on her voyage is norovirus which causes
through food poisoning. As per health and safety guideline all food handlers must follow the system and
procedure and serving food at right temperature. Also, the staffs need to be properly trained about food hygiene
and safety as most of older passengers gets immune to such virus. There were many outbreaks which cost a lot
to the company and destroyed its reputation. For example,500 passengers suffered from norovirus in 2003 for
P&O cruise where ship had to be docked in Gibraltar for through sanitization.
Cruise ships and Passenger Growth: - Due to increase in competitive market and carrying capacity there is
congestion in ocean traffic that have led to effect to marine life, pollution of sea bed floor and disposal of waste.
So, shipping companies must follow a number to system and procedure when it is related to environment. Also,
due to the increase in number of tourist they are polluting the environment by improper waste disposal.
Proper Environment Management: - Due to raise in concern of safety of marine life and prevention of pollution
most of the shipping companies must follow the guideline of environment to avoid adverse environmental
effect. So, most shipping companies follow recycle policies and zero discharge of waste into the water. Also,
when ship docks at port all recycle items are offloaded at ports. (Johnson, 2002)

2. Terrorist and pirates: - With growing concern about safety of passengers and crew against terrorist like ISIS and
pirates, security plays a very strong role. But as there are regular incident coming about terrorist attack in most
countries as a result cruise companies are coming up with modern devices for scanning, dictating and
surveillance camera to track movement of suspicious person. Also in terms of safety, armed guard are deployed
in areas high risk areas of Indian Ocean.
Opportunities and Trends
With increase of numbers of passengers sailing daily, opportunities for employment is also high in demand
specially for hotel division in cruise ship. The job market is very prospective for crew and there are number of
consultants and agencies in India, Philippines and Pakistan who are directly recruiting staff also they hold mega
seminar as their requirement is in mass. There are many advantages for crew member working with cruise
companies. They get free chance to travel at various destinations and the companies take care of their
transportation cost, food and accommodation.
So far trends are concerned most of the cruise companies are more into upgrading their ships facilities
introducing pop songs in their on-board entertainment to attract more passengers. Many companies like Cunard,
NCL, P&O launched new ships as per market demand based on age and target as per their preferences of
cruising. But to make cruise more memorable companies are offering inclusive packages and paying upfront.
But more to attract there are other offers like cruise now pay later which means payment can be done on
instalment after cruise gets complete. Apart from that cruise companies are into making the life on board more
memorable by giving shipboard experience like rock climbing, shops, onboard entertainment facilities and
medical. Also, almost every companies have come up with a concept of go green which means there are
provisions where cruise booking can be done online. (Staff, 2017)
Global Trend
With high demand for cruising the carrying capacity has also increased which have led to increase in passenger
at a rate of 6.55. The reason behind increasing rate is that most companies adopted social media like Facebook
twitter and on-line portals to drive their market. They are targeting major market segment covering every class
of societies. Above all every year more ships are added into the fleet to give variety of options for cruising as
per itinerary. (Cruise Market Watch, n.d.). As per data available it is seen that Australia has become an
increasingly important market for New Zealand in terms of destination so greater number of visitor will visit
that will generate more revenue. So, the focus is now on the infrastructure which the government is actively
working together. (Cruise Sector, 2015). It is also seen that most of the senior citizen passengers continue
cruising and get themselves attached with the shipping company to continue their cruise further. It is mainly
because they feel lonely and wanted to be taken care by someone. On the other way, round it is generating fix
revenue for the company.
Below data shows trend in growth of passengers over the period in terms of cruising.

3. Figure 1
Source: Growth cruisemarketwatch.com
References
/
Cruise Market Watch. (n.d.). Retrieved from www.cruisemarketwatch.com:
http://www.cruisemarketwatch.com/growth/
Cruise Sector. (2015, August 20). Retrieved from http://www.tourismnewzealand.com:
http://www.tourismnewzealand.com/markets-stats/sectors/cruise-sector/market-trends/
Grace, M. L. (2008, June 7). A brief history of cruise ship industry. Retrieved from http://cruiselinehistory.com:
http://cruiselinehistory.com/a-brief-history-of-the-cruise-ship-industry/
Johnson, D. (2002). Environmentally sustainable cruise tourism: a reality check. Retrieved from
http://www.sciencedirect.com: http://www.sciencedirect.com/science/article/pii/S0308597X02000088
Rodrigue, D.-P., & Notteboom, D. (2017). The Cruise Industry. Retrieved from https://people.hofstra.edu:
https://people.hofstra.edu/geotrans/eng/ch7en/appl7en/ch7a4en.html
Staff, C. C. (2017, January 9). Cruise Trends 2017: Cruise Critic's 10 Biggest Predictions. Retrieved from
http://www.cruisecritic.com: http://www.cruisecritic.com/articles.cfm?ID=2662

4. B. Selecting an approach for formulating Strategic Planning
Traditional views: - The term traditional itself means conventional or classic. In other word, strategic planning
process is done by key member of the governing body who takes part in analysis, decision and actions of the
organization growth by outlining their competitors or with whom to compete.
Resource based views: - This view is about available resources and utilization in best possible way. There are
two types of resources tangible and intangible. The tangible assets are those in physical thing like capital,
machinery, land, building etc. Whereas intangible assets are those which are not physically present but can still
be owned by the company like brand reputation, intellectual property, trademark etc.
Stakeholder View: - The theory states that growth of business for an organization stakeholder should be given
equal importance as well as for sustainable growth there are other bodies who are to be given value like
employees, supplier, customer, communities.
Appreciative Inquiry: - It is used by engaging all stakeholder and co-operative to find ideas that would be best
for the company by asking question or brainstorming.
I would suggest Appreciative Inquiry [AI] is best for any industry because since the time cruise business started
there have been changes and still innovative ideas are applied as per market trend. The following points are the
best possible reasons for bringing about changes which are as mentioned below: -
Organizational Change: - [AI] give structured approach to bring about institutional change within the
organisation. Under such theory the people of the organisation move in the direction they focus on and thus
expanding and flourishing.
Organizational Culture: - By culture it aims at behaviour and relationship it built within the organisation as well
as people. Appreciative Inquiry aims mainly at motivating people and building relationship.
Developing Strengths: - The concept mainly aims at developing strengths within oneself as well as with
organisational to overcome weakness. In other words, it aims mainly to develop people for organisational needs.
(Stratton-Berkessel, n.d.)
References
Stratton-Berkessel, R. (n.d.). Appreciative Inquiry – Overview of Method, Principles and Applications .
Retrieved from http://positivitystrategist.com: http://positivitystrategist.com/appreciative-inquiry-
overview/

5. C. Dealing with the issues:
With every organization sustainability in the market is most challenging rather than establishing business. To
retain stability, the organization need to analyses the current market trend, upgrade its products and should
be very commitment towards customer. Also, it is very essential to understand how cruise as an industry
maintained continuous growth over a period even though there are many competitors, still cruise as an
industry remain steady in the market. There are many companies where they grow and remain steady and
then decline where as some companies remain competitive and progressive. So, to understand reason behind
such strong hold of market one need to understand its principals and theories applied in business. The main
principles involve focus and setting priorities in achieving the target. In other word if the goal is set and have
plan in hand it will be very easier to achieve with less stress. Another important aspect of business is to
communicate with staff about plan with reasons and goal setting so that they can understand and can move
with a vision. Apart from giving task and goal to staff, organization should take care of staff by raising their
energy level by motivating them by giving incentives but most organization throw lavish party to retain them
and extract best out from employee. However, many corporate organization remain very flexible with
employee as well as with competitors, market etc. by conducting meeting so that an employee can
understand the target to be achieved. Moreover, any companies who wish to retain its market stability need
to understand its strength, weakness, opportunities, threat [SWOT]so that they can analyze and work on key
aspect. (Albu Consulting, n.d.)
Internal Capacity and Organization
The internal capacity for an organization depends on key factors that is resource and management. In other
words, there should be adequate resource available to establish a business-like staff, infrastructure, technology
and resources. Once it is available they should be delegated with responsibilities like goal setting, allocating
resources, motivating, supervision and training. On the other hand, management depends on leadership,
programmed, process and networking. Now as internal capacity is met the requirement is now to drive the
business with a mission where a good leadership is required to drive towards common aim, motivate and held
responsible for task deliver. Also, management is responsible for establishing good network skills to establish
relationship with other organization. For small organization, the staff are directly involving whereas for bigger
organization the staff are directly involve in establishing linkage for organizational benefits. Now to achieve
these proper financial, and professional resources is required to develop soft skills of staff. However, the
organization is not only limited to internal capacity and cannot achieve its goal without establishing relationship
with other governing bodies like the administrative and legal, political environment that influences the
organization; the social and cultural aspect (Strategic management principles, 2017) Moreover the organization
goal is not only limited to recruitment or training. It is very essential to monitor and evaluate to find the root
cause of failure of success.
Meeting Requirement of external stakeholder
External stakeholder is an individual or group working outside for the company by assisting them in every
possible way as per their requirement. So, cruise companies need stakeholders to run their business, as an
organization cannot run on its own using internal stakeholder for which they must depend on other resources
which external stake holder could provide. The different types of stake holders are vendors, consultant,
associations, trade union, government regulators, celebrities, customers etc. Each of these stake holders are
different and unique in their own way as they have their own objective to run their business. As a result, every

6. organization maintains a very good relationship with external stakeholders to meet requirement. For example,
Cruise industry must depend on tour agents to run their business as they are source to provide business apart
from that such companies must rely on on-line portals for to maximize out flow.
Porter’s Five factors
Threats to new entrants: - Market is always instable as there is always threat of new entrant. There is always
chances to enter into market with new concept if one has finance to invest and new idea. So, those existing in
business might have to face threat if they do not upgrade themselves with better concept to run. As a result,
most shipping companies constantly upgrade their features to retain stability with other competitors.
Bargaining power of suppliers: - It depends mostly upon products that are available depending upon price,
quality. Consumers on the other hand checks for competitors with better price. However, suppliers take
initiative to sell product at reasonable price in order to increase their market value and retain position in market.
Threats of substitute products of services: - There is always a threat of substitute because consumers look for
substitute. So, there are chances for companies to make less profit. For example, in cruise where software is
used may substitute if they get cheaper product with same features with better services.
Bargaining power of buyers: - The buyers always have maximum power to bargain on price as options are
always available to switchover if right quality and timely delivery is not met. On the other hand, it also depends
upon what relation is maintained amongst each other for long term business relationship.
Rivalry among existing customers: - Rivalry exist where there are competitors to compete amongst each other
to capture mass market. Under such circumstances companies slash their prices to attract more customers. On
the other hand, consumer tries to look for best bargain price and for items or products. But if there is monopoly
in business companies can fluctuate price to maximize profit. But since there is rivalry with cruise companies
they try to give good bargain price for cruise voyage so that they can retain customer. (Porter's Five Forces,
n.d.).
References
Albu Consulting. (n.d.). Retrieved from http://albu-strategymanagement.com: http://albu-
strategymanagement.com/6-guiding-principles-successful-strategy-management/
Porter's Five Forces. (n.d.). Retrieved from www.mindtools.com:
https://www.mindtools.com/pages/article/newTMC_08.htm
Strategic management principles. (2017, March 7). Retrieved from ceopedia.org:
https://ceopedia.org/index.php/Strategic_management_principles