Case study of Carnival Corporation

Case study of Carnival Corporation

Implication of Low-Cost Approach

Carnival Cruise has developed the low cost approach by making the fun ships that were targeted towards those who have never been on a cruise rather than competing as luxurious ship. The low cost strategy was also done by targeting a large mass of the target market to generate revenues that cover the cost of conducting the business. Both of these actions make carnival Cruise the Wal-Mart of the cruise industry (www.studymode.com).

SWOT Analysis

Strengths

The strengths of Carnival Corporation are as:

Market Share Dominance

The biggest strength of the company is its huge scope and scale. It is almost twice the size of its main competitor and competes in all the markets worldwide. This provides power to the company over the entire cruise industry. This enables the company to negotiate with big manufacturers of ships and continue their merger and acquisition activities (Levin et al, 2010).

Operational Experience

The company has always had below-average costs as compared to the industry and has also has above-average revenues. It is mainly because of its experience regarding the operations and owning of cruises along with good strategic decisions.

Competitive Advertising Team

The company has a very strong and competitive advertising team that whose promotion and advertising efforts has caused the company to segment its customers in a more efficient manner (Levin et al, 2010).

Weaknesses

Uncoordinated Business Operations

The company is a coalition of independent businesses. Every cruise manages its own customers, distributing, marketing, logistics and ports. This causes internal competition which enables each line to perform better. The company should try to reduce the number of ships that each line orders. The company is not realizing that every ship that they are ordering will bring the prices down in the entire industry and also in the other brands of Carnival. The company should reinvest its money in marketing efforts and not on its ship production (Levin et al, 2010).

Poor Safety Record

The accidents that the cruise ship of Carnival faces, results in scrapping and dry-docking for months. It also causes negative publicity for the company as well as the cruise industry. It also faces the issues related to lower profile such as personal loss and viral outbreaks. The company should try to integrate safety as an important value in the corporate culture.

Discount during Off-season

The company offers discount in the off season only. This results in discouraging the people to use the cruise of Carnival in the busy season because they are not able to get the tickets at reduced rates (Levin et al, 2010).

Opportunities

Favorable Demographics

The increasing population of North America and Europe has increased the target market of Carnival. The company can take advantage of this opportunity because of its market share, segments and branding. The company should ensure that the baby boomers experience the cruising experience. The company should identify the individuals that have yet to take their first cruising experience.

Asian Market

The Asian market has grown by forty percent in terms of ...