Carnival Corporation Growth Strategy Academic Report on Strategic Management by Diana Romanova 100878 Strategy & Communication EHM3.SC-02 December 10, 2012 Abstract The purpose of the report is to discuss the current strategy of the Carnival Corporation, the world leader in the cruise industry. Based on the external and internal situation analysis the new growth strategy is formulated. The recommendations on the strategy implementation and evaluation are provided by terms of the various strategic theories and models. The projected internationalization strategy may result in the improvement of the financial business situation, by increasing the corporation’s profit margins and shareholder value, and non-financial indicators, for …show more content…
4|Page Further in the report I discuss the possibilities for the future growth of the company; risks and complications. My suggestions are based on the environmental scanning and situation analysis. Finally I make recommendations on the growth strategy implementation in order to maintain leading position in the market. Situation Analysis Cruise Line industry is very complex; it is a combination of tourism, passenger carrier and hotel business, and affected by many external events. Thus for the macro-environment analysis DEPEST model was used which had shown that changes in the economic, social, demographic and technological environment are influencing the industry the most. The credit crunch strongly affected the industry. Even though USA remains the main market (62.5% according to the Cruise Market Watch), due to the recession consumers significantly downgraded or cancelled their vacation budgets. However, the opportunity can be found in the economy shift from West to East with the focus on the emerging countries (BRIC). There is a shift in social values and attitudes towards the
A pause strategy is the best initial course of action for Carnival Corporation to improve on its health standards, overall safety and public relations. This allows the corporation to consolidate its resources to take more precise action towards its critical issues. Taking a pause strategy approach the corporation can put its growth strategy on temporary hold, keying in on improving ship infrastructure and implementing better safety features. Carnival can begin by issuing more frequent maintenance and upkeep of ships, improving the diligence of sanitization of surfaces, and executing better care and handling of perishables. This strategy gives Carnival Corporation the opportunity to show progressive action towards improving overall customer health and safety. Carnival can then utilize this to apply a marketing strategy showcasing its efforts to continually keep customer wellbeing at its
Answer: The threats that exist for the future performance of the cruise –line industry and, specifically, of Carnival Cruise Lines are-
Carnival Corporation & plc is a global contender with the title of the world’s largest cruise and leisure travel company. The goal of this assessment is to analyze the strengths and weaknesses with the financial ratio analysis of the company along with conducting an internal factor evaluation matrix to view the status of the company in comparison with their top competitor, Royal Caribbean Cruises Ltd.
a) It is advisable to manage than to own as it is consistent with the growth strategy. In this manner, mar riot can attract additional capital that gives it an opportunity to even invest more in the future, share the risks with limited partners. The partnership can be of great benefit as it is a good way of saving on taxes.
* High Capital Requirements: The capital required to start up a cruise line is one of the key factors contributing to this industry’s high barriers to entry. With the average cost of building a cruise ship rising, the amount of capital needed to start up a cruise line is estimated at one billion dollars. Therefore discouraging any new entrants into the industry.
Carnival is “The World’s Most Popular Cruise Line” with 24 “Fun Ships” operating voyages ranging from three to 16 days in length to the Bahamas, Caribbean, Mexican Riviera, Alaska, Hawaii, Canada, New England, Europe, and Bermuda. Carnival’s success is attributed to its marketing program directed towards
Carnival Cruise’s, Disney Cruises and Norwegian was the only other clear competitors to RCL but in terms of subsidiaries Crystal Cruises was the only direct rival in terms of size and scale and position in the industry but in analyzing the demand increase from 1999 to 2001 a 16.7% increase in demand showed that Celebrity cruises had to maintain their position as a luxury brand to continue being a major player in the industry. The demand was strong and the competition was average, as it relates to entries to market the cruise line industry requires multiple stipulations and regulations required thus unless one of the major players mentioned above acquired a smaller cruise line to increase in operations and services Celebrity’s position was relatively strategic and smart. The competitive landscape was relatively small so quality improvement process should be the main focus during this time, they already created the process needed to offer superior service thus tweaks such as management training, career progression programs and increases in standard of performance programs would set Celebrity’s consistent quality assurance position in the industry to better
The economic climate has a strong impact on the cruise line industry. However, the cruise line industry is growing and more people are traveling today then ever before. As welfare of people has considerably grown despite all possible crises in world economy, anyhow many economic factors are influence to cruise line industry, such as clientele's economic positions, growth in markets, currencies rates when working international and inflation plays a role. Operators of a cruise will be affected under management and operational levels. If fuel price begins to increase, then it will influence operational costs of the company. If interest rates increase then, then it will influence the income of the company. Economic factor plays a major role for the company to be afloat of cruise industry.
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.
Carnival’s value proposition was to be a cheaper alternative to land vacations at all inclusive resorts while providing a variety of activities and destinations in one trip. Carnival was the “fun ship”, providing contemporary vacationing to first-time and repeat cruisers. Because customer retention is low, Carnival uses a more traditional style of marketing, focusing on the short-term customer.
One of the rapid producing leisure industry divisions, the cruise industry faces several challenges. Whereas supply continues to rise at double-digit levels, demand battles to keep speed. Known the demands on communications and the jeopardy of an eroding on-shore practice, less port are in a location to provide accommodation the cruise lines as supply grows. At the similar time, the community sector's inspection of manufacturing practices associated to the surroundings, duty, safety, protection and work increases. Regardless of these confronts, numerous cruise lines report record levels of productivity. This analysis will calculate the leisure-cruise
The final uncontrollable force affecting the cruise line industry is competition (Montalvo, 2007). This is probably the least influential force since 91% of the cruise line industry is made up of three companies-Carnival, Royal Caribbean, and Star. These three organizations are world-famous and have developed the cruise concept to the point that there is a cruise that will fit just about every person’s destination dream and budget reality.
Carnival has a strong market expansion strategy for selling the mass-market cruise category and first-time cruisers. Furthermore, Carnival Cruise Lines are successful because they have a clear vision and a commitment to their brand essence,
209AMG Tourism Marketing 1 Cruise Marketing Strategies of Carnival Cruise Lines and Thomas TUI Monisha Chauhan 3093632
The global cruise industry continues to be the fastest growing travel sector in the world with strong consumer attention and substantial cruise line investment in a diversity of mind-blowing ships that travel to the most exotic locations in the world and offer exceptional vacation experiences.