The Environmental Factors Of Royal Caribbean Cruises Ltd

Carnival Corporation & plc. is a global company with over 100,000 employees that serve 5 million passengers a year. At the end of 2014 Carnival Corporation & plc. income earnings were $15,884,000 dollars. Tickets sales at $11,889,000 dollars. After paying salaries and other fees Carnival Corporation & plc. income came to $459,000 which is low considering that in 2012 and 2013 income was over $1,070,000 dollars for each year after deducting costs. (Financial Information) The total sales come for the different age demographics, so approximately 50 percent of the predictions for cruise come from the 25-39 age group followed by the 40-59 age group at about 39 percent and the 60 plus age group at 11 percent. (Cruise Demographics)

Summary: The cruise line industry has been experiencing a period of massive expansion over the last decade thus heightening the competitive profile for the industry in terms of market share and competitive rivalry. Now cruise industry is one of the most competitive across all.

During the recent economic contraction, the cruise industry has been continually changing with more carriers purchasing larger ships. This is part of an effort to offer better amenities when attracting upscale cliental. However, the industry has become more competitive and the total number of players has increased exponentially.

* Low price sensitivity: As cruising may be categorized as a luxurious leisure-activity, its target market on average have high annual income of $82,000 - $97,000 with the average age of a cruiser being in their late forty’s. Therefore, they are not as sensitive to pricing, as the price of a cruise vacation is relatively low to the average income of the target market.

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.

Cruise lines accounted for only 5.2% of the $575.2 billion worth of the travel industry in 2014. While the revenue for cruises has declined in the US, it is growing in Europe and Asia, leading to more opportunities for Carnival to expand in these regions. Current plans calls to increase berth capacity for the European market 30% and 20% for the Asian Market by 2016.

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.

Carnival Cruise Lines is the largest cruise company in North America and carries more than 60,000 passengers a week. The Carnival experience is the standard against what past cruisers judge their later cruise experiences. Carnival has captured the "fun" psychographic and has a strong reputation for an enjoyable, relaxed cruise. Furthermore, Carnival has a strong market expansion strategy for selling the mass-market cruise category and first-time cruisers. They have a clear vision and knowledge about the industry and a commitment to their brand essence, which is fun. Also, as an extension to their branding of the "fun" ships they are the low-price leaders. Because of their strong brand image they are able to achieve double-digit growth in

There are large barriers of entry into the cruise businesses. Ships are extremely costly and time consuming to build.

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.

Cruising has become popular in the UK and throughout the world for holidays. Breaking travel news states that, ‘Cruise holidays are on the rise and the cruise industry seems

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,

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.

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

Environmental forces are something that is intangible but somehow it still affects your firm¡¦s operation. Therefore, these environmental forces can be divided into groups such as internal and external forces. In the Cathay Pacific Airway case, the internal forces can be considered as its human resource management, since the labor cost is its main concern. In addition, government policies, competitors and customer satisfaction will be considered as its external forces.