arnival Corp. remains the largest cruise line in the world. Royal Caribbean remains the second-largest cruise line in the world. Because "Status quo maintained!" isn't a very compelling headline, perhaps our cruise merger story on Page 1 of the Nov. 4 issue should have been entitled, "Norwegian Cruise Line moves up to No. 3."

In the end, there wasn't much drama. Carnival's capturing of P&O Princess Cruises wasn't really in doubt from the moment the regulatory hurdles had been cleared.

Perhaps now's an appropriate time to consider why Carnival came to be so financially strong that we all assumed it was going to win.

Given the ages of Carnival's venerable brands (such as Cunard), it's useful to remember that the line went public just 15 years ago. Carnival's strategy, since it made its first acquisition, has been quite deliberate, and it is now in such a dominant position that it will remain No. 1 for the foreseeable future -- I don't see how Royal Caribbean can catch up unless it somehow figures out how to buy Carnival.

One of the secrets to Carnival's success is its branding strategy. Companies that grow by acquisition, no matter what their scale, have to make branding choices that will determine their future. Acquiring a business -- especially a formerly competitive business -- requires extensive thought about how the newly acquired company will be positioned vis-a-vis the existing brand(s).

There are no rules here -- a company must try to strike the right balance between taking advantage of the economies of scale that are the spoils of a large company and sacrificing the distinctive qualities that may have made the acquired brand attractive in the first place.

Carnival decided to give an unusual amount of autonomy to its brands, and that was a key decision. Yes, it takes advantage of its size when buying fuel, insurance and Coca-Cola, but it doesn't, for instance, save money on rent by moving Holland America from Seattle to its Miami headquarters.

It doesn't ask its sales force to present a portfolio of brands, but instead maintains six (soon to be seven) distinct sales forces, each at considerable expense.

With the exception of the Cunard-Seabourn linkage, it hasn't distracted its senior executives with trying to administer more than one cruise line at a time.

That it has resisted these temptations speaks to two points: the vision of Carnival Corp's chairman, Micky Arison, and the financial strength of the company. Arison has demonstrated that he's willing to forego short-term cost savings in favor of maintaining long-term brand equity, and he's been fortunate to head a public company that isn't driven by the overriding need to shore up stock prices or dividends.

He also has had the common sense not to drive his managers to look for "synergies" that, more often than not, blur brand distinctions rather than enhance business.

It is perhaps on this last point that Arison is about to face his greatest temptation.

Holland America and Princess together will dominate the Alaska market. But both have vast networks of ground operators and personnel in Alaska, and the cost of maintaining two separate systems is high.

Competition between the two lines has, in the past, led to differentiation between the products, both at sea and on the ground (neither can do anything about the scenery being similarly awesome from either ship). If Carnival Corp. takes it for granted that Alaska passengers' dollars will flow into one of their two pockets, and it doesn't really care which, the products may well begin to look more similar on the ground. And if that happens, Carnival will provide an opening to a cruise line that can claim to offer "a different experience."

And then Carnival would have no choice but to buy it, too.

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