Carnival Corporation Case Study Essay

pleasure ground Corporation as the widest journey melodic line in the orb is being a attractor and innovator in the journey line pains. Many of the onboard activities and aids were introduced to fortify the competencies between competitors. The challenges of the fair were being whip by the management with fictive and innovative strategies. As a corporate entity, bazaar did non stand firm to withdraw money to settle the ocean pollution superaerated by public. The expansions of domiciliatevass line market place via acquisition of a few subsidiaries predominate the travel line in the world.1. Strengths ( immanent meanss) First, the largest cruise line in the world, as the leader and innovator in the cruise industry (growth from two reborn ocean liners into an organization with multiples cruise lines). Second, the belief of management and Board of Directors that the caller go away grows better. It motivates the employees to work hard. Third, internal grow in marches of vessels that almost ten vessels atomic number 18 to a lower place construction. Fourth, employees loyalty (the longest intent employees sojourn in this organization is around eight categorys) because Carnival management treating advantageously to their employees in terms of wages). Fifth, creative and innovative corporate officers that is ready to sheath challenges. Sixth, Carnival has operational companionship and economic of scales that causing them to produce terminal break even point in the same industry. WeaknessesFirst, in 1972, the hasten of channelise was slow. Second, the long-term debt within 1999 and 2001 is increased (the payback of debt may go down the tax income and thus decreasing the dividend payment for sh beholders). Third, the expand market (business) of Carnival causing the voicelessy in managing the business. Fourth, reducing on net income in 2001 is because of juicy cost and expenses.2. Op interfaceunities (external factors) First , the expansion through acquisition mess concentrate the competitors in same industry and has the ability to compete with other competitors (lower publicizing costs). Second, collaboration with spark agents fag end advance cruises. Third, the industry is expected to feature bright future in passengers, consolidation through mergers, buyout, and smaller cruise operator failure, and the expansion of the industry worldwide. Fourth, expand of mark customers from older heap to jr. people. Fifth, expand of onboard activities (casino, disco, and nightclub). ThreatsFirst, terrorist events that were happen in 11 September 2001. Second, detrimental publicity in 2002 where Carnival subjected by the ocean pollution charges and Norwalk-like computer virus that yarn-dye the cruise industry. Third, the increased of fuel costs and airline costs that affect the industry. Fourth, the failure of Carnival discontinued trading operations of Fiesta marina Lines that affect the company image. Fifth, Persian Gulf War that was increased competitors in the cruise industry particularly in Caribbean area. Sixth, Royal Caribbean Cruise Lines had institute a major(ip) shipbuilding program that challenges Carnival. The emergence of Walt Disney Company in the cruise market and the prospect of sassy ships on the horizon give push to the family cruise vacation piece.3. Core competencies Yes, Carnival has centre competencies because it is the competency crosses divisional boundaries, Carnival merchant ship do exceedingly well, and must continuously reinvest in it i) Adding diversion onboard much(prenominal) as disco, nightclubs, casino, and others. Carnival also tries to attract younger cruisers by providing vacation package that included airfare to the port of embarkation and shell after the cruise. ii) Product positioning Carnival believes that cruise market comprised to cardinal constituents (contemporary, reward, luxury) with different passenger demographics, char acteristics, and growth requirements. iii) Travel agents collaborate with travel agents to progress cruises. Carnival also pedagogy travel agents from nonaffiliated travel firm to give cruises.4. Distinctive competencies Yes, Carnival has distinctive competencies because distinctive competency is the superior to those of the competitions and difficult for competitors to compete with Carnival i) Investment in new ships Carnival is expanding its internal growth by investing in new ships. The ships under constructions are around 10 vessels. It is difficult for other competitors to invest in these large numbers of ships in same period precisely Carnival gage do. ii) External expansion through acquisitions Carnival has five subsidiaries that control the major cruise lines in different countries. This causing Carnival becomes as the largest cruise line in the world.5. What trends are emerging in cruise industry?i) The adding diversion onboard such as planned activities, disco, nig htclubs, casino, and other forms of entertainment activities (different kinds of activities that capable for different ages of target customers). ii) Moderate priced vacation for younger cruisers that included airfare to the port of embarkation and home after the cruise. iii) All inclusive packages that began with bags were tagged for the ship at the airdrome, air-conditioned bus, meals, onboard activities, house keeping service, until passengers were transported back to airport. iv) Love recital movie such as Titanic and Love boat that countenance the romance onboard encouraging couples to join cruise.6. Marketing strategy i) Price gibe price (vacation packages) that middle-class clients afford to pay. Prices for different levels of rooms are charged according to the customers needs. ii) Product vacation package that suitable for the clients aged. Other onboard activities such as casino and disco. The service from picking up the clients at airport to board and dropping clie nts a remove at airport. iii) Place Caribbean ports and other stopping point such as Walt Disney World, Holland, and Costa, as long as the clients want to go. iv) packaging roughly of the promotions are done by travel agents. The Fun enrapture cruise that with designated shipboard party and everyone is welcomed by Carnival is another achievement promotion.7. The importance of travel agents The travel agents willing help Carnival to promote the cruises as an alternative to Disney or European vacation. For people who never recognise a cruise in their life, or afraid of victorious a trajectory to the destinations will be attracted. Thus, it shows that the important role of travel agents to Carnival. likewise that, not only attracting clients to satisfy a cruise as the core business, selling cruise is also part of the Carnival business. Thus, Carnival is grooming travel agents from nonaffiliated travel firms to sell cruise. Because of the attractive benefit in term of mone y provided by Carnival, in year 2000, Carnival took reservations from about 29000 travel agencies to promote the business. And, it proves that this strategy in promoting cruises all to attract clients boarding the cruise or selling the cruise is succeed. 8. Flight or cruise?We will choose cruise because we have not travel yet to some where by cruise before. i) In our opinion, although the price for a cruise energy be high a bit than to shell out a rush to Caribbean island that we nominate afford to pay. By choosing a package for the cruising is worth because on that point will be variety of services that suitable for us as active younger cruisers rather than just to sit in the flight and we have nothing to do. ii) redden though cruise may take a longer time to reach Caribbean island, the final destination that we will reach is Caribbean island no matter we take a cruise or flight. Thus, we washbasin enjoy the onboard facilities that we have paid for. Disco, nightclubs, gym room, cinema, and casino are the places that we seldom go for but we can enjoy if we take a cruise for this vacation. iii) Cruise is a place that we can relax ourselves since the theatrical role of travel is to relax our mind. The sea view from a ship can come to us happy and reduce our stress. On the other hand, we can also meet some new friends through this trip. iv) Besides, we can experience some exotic destinations when the cruise will sail in the ports. The cruisers can come down from the vessel and visit some famous spots. Adversely, if we take flight, we cant visit anywhere except just theodolite in airport.9. Evaluation of Carnivals targeting to specific target market i) Contemporary segment served by Carnival ships, featured a effortless ambiance. ii) Premium segment served by Holland America, for longer market and appealed to to a greater extent adequate consumers iii) Luxury segment served by Seabourn and Cunard, catered to experience cruisers. The above are the target market for Carnival. Each segment has different types of costs to be charged to consumers. For the contemporary segment, it is more than suitable for family and people who need relaxing during a short period of holidays. The price is cheaper than premium or luxury segment. For the premium segment, it is more suitable for affluent consumers, who need a longer period to relax.It normally targets an older people to board because the facilities in the ship are more suitable for their ages. This segment of cruise will have more cabin or public space per person. In term of price, it is the most expensive and little people can afford to pay. The price for this segment is higher than contemporary segment. Not everyone will prefer this segment of cruise because they need to consider the available time for taking the cruise. The luxury segment targets for extremely rich consumers where they were served as king and queen in the ship. The consumers who taking this segment of cruise can show that they have a higher social status and prestige is the chief(prenominal) consider by consumers.10. strategical management in Carnival Carnival has a very grotesque and successful strategic management in cruise industry. During terrorist events in 2001, the world cruise industry was negatively impact by it. However, to overcome this problem, Carnival offered a deep discount to lure back the passengers. In year 2002, Carnival was subjected to the ocean pollution charges. The company was withdrawing $18 million to overcome this issue. This strategy is not only to overcome the issue ethically but also to maintain the company image. Carnival is doing well in price strategy where they offer different kinds of packages with moderate price for different kinds of customers.To advance the core competency of the company, Carnival tried to increase the services onboard and adding diversions onboard. regular(a) though other cruise company can imitate this strategy but Carnival is t he first to invent the same strategy that succeeds to gain revenue from it. Carnival tried to introduce new strategy to make more convenience to consumers such as the all-inclusive package. The main purpose of this strategy is to maximize the satisfaction of consumers on Carnival services. Finally, to reduce the competition in cruise industry and to compete with other competitors in the same industry, Carnival did acquisition on many cruise lines as subsidiaries. The expansion of Carnival in cruise line market through acquisition can tighten the status of Carnival in cruise industry.11. The advantage of being a CFC The individuals (foreigners or locals) who held the stocks of Carnival under the CFC status are incorporation exempt shipping operations of United States persons from income tax. Carnival with all of its income (except of United State source of income from transportation, hotel and tour of duty business of Holland America) would be exempt from United State federal income taxes at the corporate level. This exemption not only can increase the revenue of Carnival, it also allows the company to have more funds (liquidation assets) to run more projects or activities for the company. The reason of government to give exemption to Carnival is because to embolden this industry to growth and attract more passengers boarding on ship, especially the ship with casino. It will increase the government sources of money.12. How to maintain low costs, high level of service? i) Vertical integration or outsourcing Carnival can try to produce in-house or outsource the products or services in related industries such as shipbuilding, meal preparation industry, and transportation (bus). This is because either vertical integration or outsourcing, which contributes the lowest cost, will be the superior of Carnival to either produce in-house or to outsource the needs. The good tattle with suppliers can guarantee the best quality of the products or services. The in-house produce (vertical integration) can guarantee for the high level of products and services quality. ii) Maintain employees Experienced employees can be the senior for the new comers. They can train and guide the new workers while doing a task rather than the company to send them for training course. Thus, maintaining experienced employees can save the labor cost and maintain the service quality to passengers. iii) Maintain cruise standard (such as sanitary standard) by periodically checking to avoid break down during cruising and it may need higher cost to repair and bring inconvenience to passengers.Conclusion The success of Carnival is depends on the innovative Board of Directors and management. The growth of cruise market becomes more significant because of the low fares high quality of service. Carnival is dominating the cruise line market but they still do investment in improving the services so that to avoid the core competencies become the weaknesses of the company. Even thoug h the net profit of year 2001 is decreased but it did not mean that they have weak internal control. External factors such as increased in fuel cost also are considered the factor in the declining profit. Finally, Carnival has the potential to grow in cruise line market because they already gained the experience in cruise line and they have strong financial to support many cruise activities.