2. How does Celebrity’s product strategy differ from the strategy of its sister companies, Royal Caribbean Cruises Ltd. and Azamara Club Cruises? Cruising is a growth industry, expanding by 6% to 7% annually for the past 30 years. Recognizing this growth opportunity, Celebrity Cruises, Inc., has enlarged its offerings in the premium

“upscale experience at an intelligent price” segment of the industry by continuously growing its fleet. As CEO Lisa Lutoff-Perlo notes, “Celebrity Cruises has always been recognized as an innovative, trend-setting brand, and the Celebrity ships are just another instance in which we keep raising the bar in modern luxury travel.” To meet this opportunity and related challenges, Celebrity has committed the resources necessary for a five-ship expansion. But that was the easy part. Now Celebrity must determine the exact specifications of the new ships.

Like other products, ships are designed for specific tasks and markets. For a cruise line, the design options are huge. Consider Celebrity Cruises’ new ships. First, think of a hotel for 3,000 passengers and a staff of over 2,000. Then put the hotel on a huge power plant that can move the hotel around the world at 22 knots Video Case and supply all of the power necessary for heating, air-conditioning, laundry, kitchen, and all the other amenities expected on a luxury vacation. Then add the massive support necessary for 5,000 people.

This means warehousing and refrigeration for all the food to feed 5,000 people at least three meals every day (although the average passenger on a cruise consumes close to 4½ meals per day); fresh water for cooking, bathing, and multiple swimming pools; plus storage tanks for fuel to be used at the rate of 3,500 gallons per day