Uploaded by laura.froggatt

Threat of substitutes

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Threat of substitutes
A substitute product or service offers an alternative option to the existing product or service
and in this case the cruise industry. A substitute responds to the same basic customer needs in
a similar way, although it may be significantly different, e.g. airplane, road or rail services
are substitutes to the cruise ship industry. These options may not be what the buyer wants
when choosing as they do not provide the intended services, but they are still a viable option.
(Michaux, 2015).
Substitutes only become a serious threat when they are providing the customer with a betterquality service such as, a travel agent offering a package for a 14 night holiday in an all
inclusive resort with flights for €599, while a cruise may cost €899 for 12 nights. When price
is also concerned the consumer is concerned it is almost automatic that they chose the
cheaper option.
The main companies engaging in the cruise ship industry departing and docking from Cobh
are, Norwegian, Royal Caribbean Cruises, Princess Cruises, Celebrity Cruises and P&O
Cruises. While all are similar they each offer something different for the consumer and their
specific needs while targeting a segment of the consumer market. Other cruise line options
are an internal threat by offering substitutes to the other cruise ships.
The cruise ship industry has a low rate of substitutes, which slightly alters the power of the
incumbent firms. The alternatives of a cruise cannot compare to the service the cruise offers
with travel, entertainment and on board amenities.
Cruise line services have been a growing industry for the past ten years, they enjoy limited
sub providers of products and services. While the substitutes of the cruise ship industry offer
a different service than the original option they have become wildly more available such as,
the Eurostar rail service.
Alternative tourism products are the primary substitutes such as, bus, air travel packages,
adventure tours and packages, while all of the for mentioned are enjoyable few are
comparable to the unique experience of a cruise.
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