Carnival Case Study

1. Firm’s existing vision, mission, objectives and strategies.

Vision: They do not have one

Mission: Our mission is to deliver exceptional vacation experiences through the world’s best-know cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivaled on land and sea.

Objectives: To use its brands to reach every tier of the cruise market.

Strategies: The company will do so by providing services to travelers regardless of the vacationers’ budget, itinerary, geography, demographics or psychographics.

2. Develop vision and mission for the organization.

Vision: Our vision is to continue to be the number one company of off-land vacations.

Mission: To provide our customer with a cruising experience that go beyond their expectations, by catering a variety of different lifestyles and budgets, continually innovating our ships and services, treating our employees with respect, maintaining a high standards regarding environment care and remaining profitable and growing for our investors.

3. Identify the organization’s external opportunities and threats.

Opportunities: Two to three new ships coming out every year

7.4% growth of industry annually

The Caribbean as number 1 destination

Growth opportunity in Europe, Asia, Australia, New Zealand and South America

Younger passengers

Threats: Growth of competitors such as Royal Caribbean

Risks such as seasonality, natural disasters, Governments regulations, environmental

and health concerns, economic conditions, increase of fuel price and terrorism.

4. Competitive Profile Matrix.

Carnival Corporation & plc showed to have a little higher grade compared to Royal Caribbean, and that can be explained by the market share and financial position, in which Carnival has a much bigger market share (52.9% compared to 27.6%) and, therefore, a better financial position ($30.15b of market capital to Carnival compared to $8.6b of Royal Caribbean). There is one point that Royal Caribbean really stood out, which is customer loyalty, in which a higher percentage of Royal Caribbean customers reuse their services after the first experience.

5. External Factors Evaluations Matrix.

Carnival has great opportunities, but the company is not reacting to all those opportunities the same way. First, we have the 7.4% growth of the industry, which may represent 2.17b in revenues for the global market, and Carnival is taking advantage of this opportunity, making acquisitions, such as Ibero Cruises, expanding its business and investing in market. Another great opportunity is the significant growth in Europe, Asia, Australia, New Zealand and South America, represented by a 40% growth of cruises in the Asia-Pacific region. This opportunity is not being fully used by Carnival, since almost 60% of their ships are located only in North America.

When it comes to threats faced by Carnival, there are not many, but there is one that is really dangerous, which is the rapid growth of Royal Caribbean with already 27% of the market.

6. Identify the organization’s internal strengths and weaknesses.

Strengths: Utilization or occupancy of 100%

Revenue of $11 billion and net income of $1.9 billion

Wide variety of marketing activities, including Facebook

Highest market share (52.9%)

Industry with high entry barrier

High margin operations

Weaknesses: High costs

Industry is still a small part of the wider global vacation market

Risks such as seasonality, natural disasters, Governments regulations, environmental

and health concerns, economic conditions, fuel price and terrorism.

Both for weaknesses and threats, seasonality, natural disasters, governments regulations, environmental and health concerns, economic conditions, fuel price and terrorism were listed in, and that is because, in my point of view, all those facts can be seen today as weaknesses, since the company does depend in seasonality, may face natural disasters and terrorist acts, has to follow governments regulations, does have to care about environmental and health concerns, is affected by economy and also fuel price, but those factors can also represent threats, because, if not taken care of, the more fuel price rises, increasing the prices, or the more restrict governments regulations get, for example, more and more people will consider other options for their vacations, therefore, decreasing the total participation of cruise trips in the global vacation market.