Swot Analysis

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ROYAL CARIBBEAN CRUISES
SWOT Analysis

SWOT ANALYSIS
RCC is the second largest global operator of cruise ships and holds a market share of about 35% in the oligopolistic North American cruise market. The company may face a considerable decline in its earnings due to increasing fuel prices.

Strengths
Dominant business position Strong brand recognition Consistent increase in revenues

Weaknesses
Increasing expenses Low efficiency Inadequate presence in high growth European market

Opportunities
Favorable demographic trends Marketing alliances Improved cruise passenger traffic

Threats
Weather conditions Severe competition High fuel prices

Strengths
Dominant business position RCC is the second largest global operator of
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Demographic trends favor the company’s growth in the coming years. Marketing alliances As the cruise ship industry continues to grow, there are increasing demands on cruise lines to provide more varied onboard services and visit more exotic harbors. Remodeled interiors and increased deck space are also required to keep ships competitive. The company has several brand partnerships that enhance the quality of its onboard services in terms of attracting customers. These brands include Johnny Rockets, Ben & Jerry’s ice cream, Seattle’s Best Coffee and Cova Cafe Milano. There is an immense potential for the company to grow its revenues from onboard services through such marketing alliances. Improved cruise passenger traffic There has been a recovery in passenger traffic on cruise lines since 2003. Cruise lines carried 2.3 million passengers on North American cruises in the first quarter of 2004, reflecting a 13.6% increase compared to the same period in 2003. Increased consumer spending due to the economic recovery in the US is the main reason for improved traffic on cruise ships. The company is well poised to benefit from these favorable trends.

Threats
Weather conditions The company operates in an industry which inherits risk of unfavorable weather conditions. For instance, Florida experienced four major hurricanes in 2004 successively. Such unfavorable events could force the company to delay or change its schedules

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