Company Case MSC Cruises: From One Second-Hand Ship to a Major
World Player
In 1970, Italian Gianluigi Aponte founded the Mediterranean Shipping Company (MSC) with a single second-hand ship
and just $5,000 in capital to move cargo between Europe and Africa. Despite a challenging, price-based competitive
environment, MSC has since prospered and grown to become the world’s second-largest container operator behind
Maersk, with a fleet of over 400 ships and operations in 150 countries.
MSC ventured into passenger cruises in 1989 with the acquisition of Lauro Lines, a division they would later rebrand
as MSC Cruises. By 2003 they had recognized that they could not successfully compete in the growing cruising sector
with the low-cost second-hand ship approach that had worked so well in their shipping container division, so they
embarked on a substantial new-ship investment program.
Today they have 12 new luxury cruise ships in operation and are the world’s fourth-largest cruise operator and the
leading cruise brand in Europe. They plan to become the world’s third-largest cruise line by 2025.
Reinvention of the Cruising Industry
Cruise ships were initially designed for overseas transport and were popular for that purpose up to the 1960s, when
long-range air travel became more affordable for the broader market. At the time it appeared that the era of mass
passenger ship travel was over, surpassed by superior technology of airlines, which were able to provide faster,
cheaper, and more flexible travel options.
And this was the case for the next 30 years or so, as cruise ships essentially targeted affluent retirees looking for an
upmarket experience. While this may be an attractive segment from a profit perspective, the market lacked size and
growth potential. For example, in 1990 less than 4 million people worldwide went on a cruise.
Around this time, major cruise operators started to consider how they could compete in the broader holiday market.
They certainly didn’t have the speed advantages or the choice of destinations of airlines, nor did they have the facilities
of hotels and resorts—so how could they compete?
The answer lay in the reinvention of the industry to be halfway between a form of transport and a resort, essentially
