Carnival Porter 5 Forces

1851 WordsApr 7, 20128 Pages
CARNIVAL CORPORATION & PLC PORTER’S 5 FORCES Porter’s 5 forces model allows to analyse the factors outside the Cruise industry that influence the nature of Carnival competition within it, the forces inside the Cruise industry that influence the way in which Carnival compete, and so the company’s likely profitability. With an understanding of where power lies, Carnival can take advantages of a situation of strength, improve a situation of weakness and avoid taking wrong strategies. Porter has identified five competitive forces that shape every industry and every market: bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes and rivalry among competitors. A sixth element has also been added…show more content…
With this considerations buyers have low price sensitivity that allow Carnival to have a strong position. Carnival is a leader in the cruise industry and it’s highly likely that the consumers would select this company; as it is also a branded company recognizable on the market it allow the process of word of mouth that lessen the power of the consumers from their self. Even if the company can have a strong position against its buyers due to the business characteristics the close relationship that the customers have with the travel agencies gives their a greater influence over the ticket price. In summary, the low price sensitivity, low buyer concentration and the leadership of Carnival in the cruise industry on one hand enhances the buyer power while a high degree of involvement of travel agency on the other reduces their bargaining power, the power of buyer of the buyers in the cruise line market of Carnival is moderate. Threat of new entrants’ category. LOW Factors affecting the ability of new comers to enter the market include capital requirements and cost of fuel, economies of scale, access to channels of distribution, constraint of brand equity, threat of M&A and regulation on Maritime cruises. It is difficult for new cruise lines to enter this market since the level of star-up capital required is extremely high given the average cost of a cruise ship and the

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