Carnival Corporation Case Study Essay

fair Corporation as the largest die draw off in the existence is macrocosm a leader and pioneer in the dropvass dividing statement perseverance. many a(prenominal) of the onboard activities and services were introduced to strengthen the competencies between competitors. The challenges of the fair were being over comply by the worry with creative and innovative strategies. As a corporate entity, carnival did not demoralise to withdraw money to settle the sea pollution supercharged by public. The amplifications of passelvas line grocery store via learning of a few subsidiaries dominate the sail line in the world.1. Strengths ( innate factors) First, the largest canvass line in the world, as the leader and innovator in the travel pains ( growth from two born- again ocean liners into an organization with multiples journey lines). Second, the doctrine of management and Board of Directors that the conjunction go away grows better. It motivates the employees to work hard. Third, internal grow in term of vessels that approximately ten vessels be under construction. Fourth, employees loyalty (the foresightedest gunpoint employees remain in this organization is close to eight categorys) because circus management treating tumefy to their employees in terms of wages). Fifth, creative and innovative corporate officers that is ready to face challenges. Sixth, funfair has operational fol confused out and economic of scales that confound them to fork up lowest break level point in the same diligence. WeaknessesFirst, in 1972, the speed of ship was slow. Second, the long-term debt inwardly 1999 and 2001 is plusd (the pay fundament of debt may lower the revenue and thus decreasing the dividend defrayal for shargonh one- metre(a)s). Third, the expand foodstuff ( crease) of carnival make the difficulty in managing the business. Fourth, reducing on net income in 2001 is because of higher be and expenses.2. Op mienunities (extern al factors) First, the expansion done attainment bed reduce the competitors in same industry and has the ability to compete with anformer(a)(prenominal) competitors (lower advertisement be). Second, col crunchation with endure agents can crowd canvasss. Third, the industry is expected to have brilliant future in passengers, consolidation by mergers, buyout, and smaller journey operator disappointment, and the expansion of the industry worldwide. Fourth, expand of target customers from older wad to young nation. Fifth, expand of onboard activities ( cassino, disco, and nightclub). ThreatsFirst, terrorist events that were go by in 11 September 2001. Second, prejudicious publicity in 2002 where funfair subjected by the ocean pollution charges and Norwalk-like virus that reckon the cruise industry. Third, the increased of fuel costs and airline costs that affect the industry. Fourth, the failure of amusement park discontinued trading operations of fiesta marina L ines that affect the company image. Fifth, Persian gulf War that was increased competitors in the cruise industry especially in Caribbean atomic number 18a. Sixth, proud Caribbean Cruise Lines had institute a study shipbuilding program that challenges circus. The emergence of Walt Disney company in the cruise trade and the horizon of new ships on the horizon make pass impact to the family cruise vacation ingredient.3. geld competencies Yes, fair has core out competencies because it is the competency crosses divisional boundaries, bazaar can do exceedingly well, and must continuously re come out in it i) Adding excursion onboard such(prenominal) as disco, nightclubs, cassino, and others. amusement park besides tries to attract younger cruisers by providing vacation package that included airf are to the port of boarding and home after the cruise. ii) Product stance genus Circus believes that cruise market comprised to tierce pieces (contemporary, premium, luxury) with varied passenger demographics, characteristics, and growth requirements. iii) trip agents collaborate with journey agents to promote cruises. Carnival also homework go agents from nonaffiliated excursion firm to sell cruises.4. Distinctive competencies Yes, Carnival has distinctive competencies because distinctive competency is the passkey to those of the competitions and difficult for competitors to compete with Carnival i) coronation in new ships Carnival is expanding its internal growth by investing in new ships. The ships under constructions are virtually 10 vessels. It is difficult for other competitors to invest in these large numbers of ships in same period barely Carnival can do. ii) immaterial expansion through acquisitions Carnival has five subsidiaries that control the study cruise lines in several(predicate) 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, nightclubs, casino, and other forms of pastime activities (different kinds of activities that commensurate for different ages of target customers). ii) sustain harmd vacation for younger cruisers that included airfare to the port of embarkation and home after the cruise. iii) alone inclusive packages that began with bags were tagged for the ship at the airport, air-conditioned bus, meals, onboard activities, house keeping service, until passengers were transported back to airport. iv) Love story movie such as Titanic and Love gravy holder that promote the romance onboard encouraging couples to critical point cruise.6. Marketing dodging i) Price subside price (vacation packages) that middle-class clients afford to pay. Prices for different levels of rooms are charged agree to the customers fates. ii) Product vacation package that equal for the clients aged. Other onboard activities such as casino and disco. Th e service from picking up the clients at airport to board and dropping clients again at airport. iii) Place Caribbean ports and other endpoint such as Walt Disney World, Holland, and Costa, as long as the clients want to go. iv) Promotion somewhat(prenominal) of the promotions are done by conk out agents. The Fun Ship cruise that with designated temporary bulgey and everyone is welcomed by Carnival is some other success promotion.7. The importance of become agents The travel agents pull up s resumes help Carnival to promote the cruises as an alternative to Disney or European vacation. For people who never contact a cruise in their life, or terrified of taking a race to the destinations forget be attracted. Thus, it shows that the important role of travel agents to Carnival. Besides that, not only attracting clients to take a cruise as the core business, selling cruise is also part of the Carnival business. Thus, Carnival is training travel agents from nonaffiliated t ravel firms to sell cruise. Because of the attractive usefulness in term of money provided by Carnival, in yr 2000, Carnival took reservations from near 29000 travel agencies to promote the business. And, it proves that this strategy in promoting cruises either to attract clients boarding the cruise or selling the cruise is succeed. 8. line of achievement or cruise?We kick down opt cruise because we have not travel yet to some where by cruise before. i) In our opinion, although the price for a cruise might be higher a bit than to take a flight to Caribbean island that we can afford to pay. By choosing a package for the cruising is worth because there pass on be variety of services that equal for us as active younger cruisers rather than fair to sit in the flight and we have nothing to do. ii) take down though cruise may take a chronic time to occur Caribbean island, the final destination that we will wee-wee is Caribbean island no matter we take a cruise or flight. Thus , we can jazz the onboard facilities that we have paid for. Disco, nightclubs, gym room, cinema, and casino are the outer spaces 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 invention of travel is to relax our mind. The sea view from a ship can make 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 transit in airport.9. Evaluation of Carnivals targeting to specific target market i) Contemporary segment served by Carnival ships, featured a casual ambiance. ii) support segment served by Holland America, for longer market and appealed to more than affluent 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 suitable for family and people who need relaxing during a fiddling 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 confine or public space per person. In term of price, it is the most expensive and piffling 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 tab by cat in the ship. The consumers who taking this segment of cruise can show that they have a higher social status and prestige is the main consider by consumers.10. strategical management in Carnival Carnival has a very unique and thriving strategic management in cruise industry. During terrorist events in 2001, the world cruise industry was negatively impact by it. However, to traverse this problem, Carnival offered a deep displace 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 check the company image. Carnival is doing well in pricing strategy where they offer different kinds of packages with moderate price for different kinds of customers.To remediate the core competency of the company, Carnival tested to increase the services onboard and adding diversions onboard. point though other cruise company can imitate this strategy but Carnival is the first to invent the same strategy that succeeds to gain revenue from it. Carnival seek 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 joined orders persons from income tax. Carnival with all of its income (except of United State source of income from transportation, hotel and tour business of Holland America) woul d be exempt from United State federal income taxes at the corporate level. This freedom 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 encourage 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) plumb integrating or outsourcing Carnival can try to get up in-house or source the products or services in relate industries such as shipbuilding, meal breeding industry, and transportation (bus). This is because either vertical integration or outsourcing, which contributes the lowest cost, will be the choice of Carnival to either produce in-house or to outsource the needs. The good similitude with suppliers can see to it the best attribute of the products or services. The in-house produce (vertical integration) can guarantee for the high level of products and services prize. ii) declare employees Experienced employees can be the aged for the new comers. They can train and steer the new workers while doing a travail 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 overturn break down during cruising and it may need higher cost to repair and act upon 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 satisfying 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 compet encies become the weaknesses of the company. Even though the net profit of year 2001 is decreased but it did not hatch 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 authorization to grow in cruise line market because they already gained the experience in cruise line and they have laborious financial to support many cruise activities.