The Nation of Why Not
International Business Case Study
Kogod School of Business
American University
Spring 2009

Discussion Questions
• Imagine you are a Pullmantur executive and you have a 50% market share
in the Spanish cruise industry. What would make you accept Royal
Caribbean’s acquisition proposal? Would you be willing to stop your
operations in Cuba?
• There’s an ongoing debate about the way the Liberian government is
spending the corporate taxes that come from companies like Royal
Caribbean. If these funds are being used to finance an armed conflict, what
is Royal Caribbean’s responsibility in the situation?
• Disney Cruises, one of Royal Caribbean’s rivals, has long used a global
brand strategy. On the other hand, RC brands each regional subsidiary
differently. Which strategy do you think is most effective? Why?
• What aspects should the company consider before moving forward into the
Chinese market?
• How is Royal Caribbean using Global Coordination to increase its profits?

Royal Caribbean and the Kogut Model
Leverage Arbitrage
Production Shifting
Political leverage
• Outsourcing supplies, furniture
• Finland’s loan
and employees
Tax Minimization
• Incorporating in Liberia
Global Coordination
• Ship Swaps
Information Arbitrage
• Feedback from Subsidiaries

The Ship Swap Case

Royal Caribbean
Historical Financial Performance
Royal Caribbean closes
deal with TUI AG and CDF
Royal Caribbean reports
80.7% increase in net Royal Caribbean
income on April 23-04 buys Pullmantur