Strategic

STRATEGIC MANAGEMENT (BPMN 3023) 1
CARNIVAL CORPERATION
1. INDRODUCTION
Carnival Corporation & PLC is a British American registered multi-national cruise
company and the worlds largest cruise ship operator. Carnival is a dual listed company,
with headquarters at carnival places in the Miami Suburb of Doral, Florida, united states
along with a sales office carnival house in Southampton, Hampshire, England. Besides,
carnival has a portfolio of most recognized cruise brands in geographic areas
accounting for 85% of the worlds cruise passengers and attracting 10 million guests
annually.
Carnival is strong brand recognition and presence has contributed to its success as
one of largest vacation companies in the worlds and will allow for continued grown
through expansion into new regions. Carnival comprises nine individual cruise line
brands, operating a combined fleet of over 100 ship, totaling over 190, 000 lower berths
and new ships on order. The carnivals corporation to take the world an vacation and
deliver exceptional experience through many of the worlds best known cruise brands
that caters to variety of different geographic regions and lifestyles.

2. COMPANY PROFILE
Carnival Cruise Line was founded in 1972 by the late Ted Arison in Miami, Florida.
The flagship brand began operations with a single ship, the Mardi grass, with a one-way
trip from Miami to San Juan. It made an initial public offering of 20% of its common
stock in 1987. This provided capital that allowed the company to begin its expansion
through acquisition. The first acquisition was operator Holland America Line in 1989,
followed by Seaborne Cruise Line in 1992. In 1993 the company changed its name to
Carnival Corporation, and continued to expand further into the cruise industry with the
acquisitions of Cunard Line in 1998 and Costa Cruises in 2000. In 1988 Carnival Cruise
expanded into charter airlines with the purchase of Pacific Interstate Airlines, renamed
Carnival Air Lines in 1989. The company flew Airbus A300s, Boeing 727s and Boeing
737s on routes between San Juan, Orlando, Miami International Airport and other
charter services.
Carnival Corporation & plc is a British-American registered multi-national cruise
company and the worlds largest cruise ship operator. Carnival is a dual listed company,
with headquarters at Carnival place in the Miami suburb of Doral, Florida, United States
along with a sales office Carnival House in Southampton, Hampshire, England. The
constituent Corporation and plc are separate listed companies and have different
shareholders, but they jointly own all the operating companies in the group. In addition,
Carnival Corporation own the majority stake, however as part of Carnival Corporation
acquisition of P&O Princess Cruises in 2002 it was agreed that P&O Princess would be
relisted as Carnival plc in London. The Carnival Corporation has the highest brand
presence in the cruise line industry with twelve of the most highly recognizable brands
in North America, the United Kingdom, Germany, Italy and Australia.

2.1 Core business

Carnival Corporation & plc operates a fleet of 100 ships, with new ship
deployments beginning in spring 2014 in several key markets. Carnival has a portfolio of
most recognized cruise brands in geographic areas accounting for 85% of the worlds
cruise passengers and attracting 10 million guests annually. Carnivals strong brand
recognition and presence has contributed to its success as one of largest vacation
companies in the world and will allow for continued grown through expansion into new
regions.
2.1.1 Brands and Ships
Carnival comprises nine individual cruise line brands, operating a combined fleet
of over 100 ships, totaling over 190,000 lower berths and new ships on order. Executive
control of each brand is by geographical location, with Carnival Corporation controlling
operations in North America, Carnival UK controlling operations in the United Kingdom
and Costa Cruises Group controlling operations in the rest of Europe. There are several
brands which are Carnival Cruise Lines, Holland America Line, Princess Cruises and
Seaborne Cruise Line. There are more than 10 ships inside of each main brand of
cruise. For example, Carnival Breeze, Carnival Conquest, Carnival Dream, Carnival
Ecstasy, Carnival Elation, Carnival Fantasy, Carnival Fascination, Carnival Imagination,
Carnival Inspiration, Carnival Legend, Carnival Liberty, Carnival Magic, Carnival
Miracle, Carnival Paradise, Carnival Pride, Carnival Sensation, Carnival Spirit, Carnival
Splendor, Carnival Sunshine, Carnival Triumph, Carnival Valor and Carnival Victory are
including in Carnival Cruise Lines.
a) Carnival Cruise Line
Carnival Cruise Line is the most popular cruise brand in North America and operates
24 ships designed to foster exceptionally fun and memorable vacation experiences at
an outstanding value. Carnival Cruise Line is the leading provider of year-round
Caribbean cruises and also operates seasonal cruises in Europe, Alaska, New England,
Canada, Bermuda, Hawaii, Mexican Riviera and the Panama Canal. The brand caters
to a wide consumer demographic, appealing to families, couples, singles and seniors
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alike. One common denominator among Carnival's guests is the desire for a truly fun,
memorable and enjoyable vacation experience.
b) Princess Cruises
One of the best-known names in cruising, Princess Cruises is a global cruise and
tour company operating a fleet of 18 modern ships renowned for their innovative design
and wide array of choices in dining, entertainment and amenities, all provided in an
environment of exceptional customer service. A recognized leader in worldwide cruising,
Princess carries 1.7 million guests each year to destinations around the globe ranging in
length from three to 114 days.
c) Holland America Line
Holland America Line's premium fleet of 15 mid-sized ships offers more than 500
cruises to ports in 98 countries, territories or dependencies, such as Antarctica, South
America, Australia/New Zealand, Asia, Caribbean, Alaska, Mexico, Canada/New
England, Europe and Panama Canal. The cruise line also offers an annual Grand World
Voyage of over 100 days. Renowned for its gracious service, Holland America Line's
spacious, elegant mid-sized ships feature sophisticated five-star dining, extensive
entertainment and activities, innovative culinary enrichment programs and compelling
worldwide itineraries. Popular features are the Greenhouse Spa & Salon, the Culinary
Arts Center presented by Food & Wine magazine a state-of-the-art onboard show
kitchen where more than 60 guest chefs and culinary experts provide cooking
demonstrations and classes Explorations Cafe powered by The New York Times,
Digital Workshop powered by Windows, new dining experiences such as the Italian
Canaletto Restaurant, an Evening at Le Cirque in the Pinnacle Grill and dishes from the
famed Culinary Council. Holland America Line currently has two new 2,650-guest
Pinnacle-class ships on order.

d) Seabourn
Seabourn provides ultra luxury cruising vacations in a unique, small-ship style that
focuses on genuine, intuitive service, all-suite accommodations, superb cuisine and
unique experiences in destinations worldwide. Critics and readers' polls consistently
rate Seabourn as the world's best small-ship cruise line and among the top vacation
choices of any kind. Between 2009 and 2011, Seabourn added three new ships that are
hailed as "game-changers for the luxury segment," offering more categories of luxury
suites, more dining alternatives and the largest spa facility on any ultraluxury vessel.
Seabourn ships maintain a service ratio of nearly one staff member per guest, and the
intimate, sociable atmosphere that is the hallmark of the Seabourn cruising lifestyle.
Seabourn's ships cruise to destinations throughout the world, including Europe, Asia,
the South Pacific Islands, Australia and South America and Antarctica.
2.2 MISSION

To take the world on vacation and deliver exceptional experiences through many
of the worlds best known cruise brands that cater to a variety of different geographic
regions and lifestyles, all at an outstanding value unrivalled on land or at sea.
2.3 GOALS AND OBJECTIVES
The companys objective is to be leading vacation company in the world. Carnival aims
to achieve this by offering both quantity, in the form of the wide range of holiday and
vacation products to a broad customers base, and quality, in the form of an exceptional
vacation experience well worth the price.
2.4 BOARD OF DIRECTORS
1 Micky Arison
Chairman of the Board, Carnival Corporation & plc
Micky Arison grew up in the cruise business and spent the better part of two
decades learning it from the ground up before being appointed chairman in 1990. Mr.
Arison began in the sales department at Carnival Cruise Lines and worked his way
becoming reservations manager in 1974. He became vice presidents of passenger
traffic in 1976, and just three years later, Mr.Arison named as a president. In 1987,
Carnival went public, raising $400 million for future expansion, and by early 1989, Mr.
Arison engineered the acquisition of the venerable Holland America Line. The purchase
also included Windstar Cruises and Westours (now Holland America Princess Tours), a
leading Alaska tour operator, giving Carnival entre to the premium segment of the
cruise industry.
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Over the next several years, Carnival Corporation acquired brands in various
other markets including ultra-luxury Cunard Line and Seabourn Cruise Line, as well as
contemporary European operator Costa Cruises, the regions number one cruise line. In
April 2003, Mr. Arison spearheaded the transaction combining Carnival Corporations six
cruise operators with the brands of P&O Princess Cruises, creating a truly global cruise
operator with the leading cruise brands in both North America and Europe. Mr. Arisons
contributions to the cruise industry have been recognized worldwide. Some of his
honours include being named Officer of the French Legion of honour the countrys
highest civilian honor by then French President Jacques Chirac, as well as receiving
the insignia of Onorificenza al Merito della Repubblica Italiana by the president of Italy,
which confers that country's highest title on a civilian.
Mr. Arison has been chairman of the board of directors since 1990 and a director
since 1987. He became a director and chairman of the board of directors of Carnival plc
in April 2003. He was Chief Executive Officer of Carnival Corporation from 1979 to July
2013 and was Chief Executive Officer of Carnival plc from 2003 to July 2013.
2 Sir Jonathon Band

Former First Sea Lord and Chief of Naval Staff, British Navy
Sir Jonathon Band has been a director of Carnival Corporation and Carnival plc
since 2010. He served in the British Navy from 1967 until his retirement in 2009, having
served as First Sea Lord and Chief of Naval Staff, the most senior officer position in the
British Navy, until 2009. He has been a non-executive director of Lockheed Martin UK
Limited since May 2010.
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3 Arnold W.Donald
President and Chief Executive Officer, Carnival Corporation & plc
Arnold W. Donald has been a director of Carnival Corporation since 2001 and a
director of Carnival plc since 2003. Mr. Donald has been President and Chief Executive
Officer of Carnival Corporation & plc since July 2013. He was President and Chief
Executive Officer of The Executive Leadership Council, a professional network of
African-American executives of major U.S. companies, from 2010 to June 2012. He
previously served as President and Chief Executive Officer of Juvenile Diabetes
Research Foundation International from 2006 to 2008. From 2000 to 2005, Mr. Donald
was the Chairman of the Board of Merisant Company, a manufacturer and marketer of
table top sweetener products, including the Equal and Canderel brands. From 2000 to
2003, he was also the Chief Executive Officer of Merisant Company. From 1998 to
2000, he was Senior Vice-President of Monsanto Company, a company which develops
agricultural products and consumer goods, and President of its nutrition and consumer
sector. Prior to that, he was President of Monsanto Company's agricultural sector. He
has been a member of the boards of directors of Bank of America Corporation since
January 2013 and Crown Holdings, Inc. since July 1999. He was a member of the board
of The Laclede Group, Inc. from January 2003 to January 2014, Oil-Dri Corporation of
America from December 1997 to January 2013 and The Scotts Company from March
2000 to January 2009.

4 Richard J.Glasier
Former President and Chief Executive Officer, Argosy Gaming Company
Richard J. Glasier has been a director of Carnival Corporation and Carnival plc
since 2004. From 2002 to 2005, Mr. Glasier was President of Argosy Gaming Company,
an owner and operator of casinos, and its Chief Executive Officer from 2003 until 2005.
From 1995 to 2002, Mr. Glasier was Executive Vice President and Chief Financial
Officer of Royal Caribbean Cruises Ltd.
5 Debra Kelly-Ennis
Former President and Chief Executive officer, Diageo Canada, Inc.
Debra Kelly-Ennis has been a director of Carnival Corporation and Carnival plc
since April 2012. She was President and Chief Executive Officer of Diageo Canada,
Inc., a subsidiary of Diageo plc, a global spirits, wine and beer company, from 2008 to
2012. From 2005 to 2008, she was Chief Marketing Officer for Diageo North America
Inc., another subsidiary of Diageo plc. Ms. Kelly-Ennis has also held marketing, sales
and general management positions with leading companies such as RJR/Nabisco, Inc.,
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The Coca-Cola Company, General Motors Corporation and Grand Metropolitan PLC.
She has been honoured as one of the Top 100 Most Powerful Women in Canada in
2012, 2011, 2010 and 2009 and was named Leading Chief Executive Officer in 2010 by
the Toronto Human Resources Professional Association. She has been a member of the
boards of directors of Altria Group, Inc. since February 2013, where she serves on the
Innovation Committee and the Nominating, Corporate Governance and Social
Responsibility Committee, Hertz Global Holdings, Inc. since May 2013, where she
serves on the Nominating and Governance Committee, and Pulte Group, Inc. since
September 1997, where she serves on the Audit Committee and the Nominating and
Governance Committee.
6 Sir John Parker

Chairman, Anglo American plc and Vice Chairman of DP World Limited
Sir John Parker has been a director of Carnival Corporation since 2003 and a
director of Carnival plc since 2000, having served as Deputy Chairman of Carnival plc
from 2002 to 2003. He was the non-executive Chairman of National Grid plc from
October 2002 until January 2012. He has been Vice Chairman of DP World Limited
since February 2005 and a director of Anglo American plc since July 2009, serving as its
Chairman since August 2009. He has also been a non-executive director of Airbus
Group N.V. (formerly known as European Aeronautic Defence and Space Company
EADS N.V.) since October 2007. From May 2007 to August 2009, he served as nonexecutive chairman of Mondi plc. He was formerly Senior Non-Executive Director of the
Court of the Bank of England, a non-executive director of GKN plc, Brambles Industries
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plc and BG Group plc, Chairman of Babcock International Group plc, RMC Group plc,
and P&O Group plc, President of the Royal Institute of Naval Architects and President of
the Royal Academy of Engineering. He was formerly a member of the Prime Ministers
Business Council for Britain and Chancellor of the University of Southampton. Sir John
Parker has been a member of the General Committee of Lloyds Register of Shipping
since 1983 and was Chairman of its Technical Committee from 1993 to 2002.
7 Stuart Subotnick
President and Chief Executive Officer, Metromedia Company
Stuart Subotnick has been a director of Carnival Corporation since 1987 and a
director of Carnival plc since 2003. Mr. Subotnick has been President and Chief
Executive Officer of Metromedia Company, a privately held diversified Delaware general
partnership, since 2010, having previously served as its general partner and Executive
Vice President since 1986. He was a member of the board of directors of AboveNet, Inc.
from July 1997 to July 2012.
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8 Laura Weil
Former Executive Vice President and Chief Operating Officer, New York & Company,
Inc.
Laura Weil has been a director of Carnival Corporation and Carnival plc since
2007. She was the Executive Vice President and Chief Operating Officer of New York &
Company, Inc., a woman's apparel and accessories retailer, from June 2012 to August
2014, having served as an Executive Consultant since February 2012. Ms. Weil was the
Chief Executive Officer of Ashley Stewart LLC, a privately held retailer, from 2010 to
2011. Ms. Weil was the Chief Executive Officer of Urban Brands, Inc., a privately held
apparel retailer, from 2009 to 2010. Ms. Weil was the Chief Operating Officer and Senior
Executive Vice President of Ann Taylor Stores Corporation, a women's apparel
company, from 2005 to 2006. From 1995 to 2005, she was the Chief Financial Officer
and Executive Vice President of American Eagle Outfitters, Inc., a clothing retailer.
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9 Randall J.Weisenburger
Managing Member, Mile 26 Capital LLC
Randall J. Weisenburger has been a director of Carnival Corporation and
Carnival plc since 2009. Mr. Weisenburger is the Managing Member of Mile26 Capital
LLC, a private investment firm. He was the Executive Vice President and Chief
Financial Officer of Omnicom Group Inc., a Fortune-250 global advertising, marketing
and corporate communications company, from 1998 to September 2014. Mr.
Weisenburger has been a director of Valero Energy Corporation since January 2011.
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3.0 General Task of Carnival Cooperation

i.
Political and Legal

Political factors are how and to what degree a government intervenes in the
economy. Specifically, political factors include areas such as tax policy, labour law,
environmental law, trade restrictions, tariffs, and political stability. In Carnival
Cooperation Company, The increasing number of global tourism activities combined
with growth of the cruise industry has led to a serious issue of security and safety
(Dowling, 2006). Political instability in a national government increases the likelihood of
terrorism activities near regions such as Somalia. Pirates consider cruise ships as an
easy target to hijack and will demand high ransoms for passengers (Dowling, 2006).
Passengers lives are at risk if their requirements are not met, endangering Carnival
Corporations operations. Taxation policies in different countries would also affect
company profits.
ii.
Social
Social factors include the cultural aspects and include health consciousness,
population growth rate, age distribution, career attitudes and emphasis on safety.
Trends in social factors affect the demand for a company's products and how that
company operates. For Carnival Cooperation Company, people from different cultures
have different demands for their travel options. People in developing countries will likely
perceive cruise vacations as unneeded luxuries while those in developed nations
consider cruise vacations affordable, leading to most cruise lines operating in the
Western hemisphere.
Besides that, the players may segment the market using multiple brands that
target different demographic groups to achieve maximum penetration. The cruise
industry like carnival cooperation has to position its self to meet the demand for cruising
based on the consideration of demographic trends impacting its major markets. In
between 2010 and 2020, the number of people in the cruise industry primary age group
of 45 years and older are expected to grow by 20 million in the U.S and Canada, and 17
million in the aspect of traveling, have had a significant adverse impact on demand and
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pricing in the travel and vacation industry in the past and may have an adverse impact
in the future.
iii.
Economic
Economic factor include economic growth, interest rates, exchange rates and the
inflation rate. These factors have major impacts on how businesses operate and make
decisions. The economic segment centres on the economic conditions within which
organizations operate. It includes elements such as interest rates, inflation rates, gross
domestic product, unemployment rates, levels of disposable income, and the general
growth or decline of the economy. The economic crisis of the late 2000s has had a
tremendous negative effect on a vast array of organizations. As the economy is in
recession, people would likely not have enthusiasm and enough money to spend on a
cruise vacation. High inflation rates will increase the cost of operation and also affect
the exchange rate for foreign currency. The change in foreign currency rates would
affect the purchasing power of cruise passengers when they arrive at foreign
destinations. Disadvantageous rates would significantly influence the consumer
decision making process when individuals consider going on a cruise.
iv.
Technology
Technology factors include technological aspects such as R&D activity,
automation, technology incentives and the rate of technological change. They can
determine barriers to entry, minimum efficient production level and influence outsourcing
decisions. Internet technology plays an increasingly important role in global commerce.
Consumers can easily book their cruise trip on company websites by themselves, rather
than see a travel agent. Cruise companies need to constantly invest in technology to
add more functions on their ships, creating a convenient and enjoyable experience for
their customers while increasing the safety level of their ships.
Other than that, all cruise business including carnival cooperation use software
and other IT system to among other things, manage its inventory of cabin held for sale
and set pricing in order to maximize
its revenue yields, and to optimize the
effectiveness and efficiency of its shore side and shipboard operation. High technology
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provides convenient service for customer and all cruise business. However, cruise
businesses are later adopter as compared to other technology business. Therefore,
technology has a moderate strong influence on the all business.
v.
Ecology
Ecology factors include environmental aspects such as weather, climate, and
climate change, which may especially affect industries such as tourism, farming, and
insurance. Furthermore, growing awareness of the potential impacts of climate change
is affecting how companies operate and the products they offer, both creating new
markets and diminishing or destroying existing ones. Emissions from cruise ships of
sulphur oxides (SOx), which cause acid rain and soil degradation, have a huge negative
impact on the environment and peoples health. The resulting environmental concern
has led to government intervention in some part of the world (Euromonitor International,
2013).
In addition, the spread of contagious diseases and threats, adverse weather
condition or natural disasters could have an adverse effect on cruise products sales and
the profitability of all cruise business. For example, travel restriction to Mexico due to
the flu virus and significant reduction in discretionary spending, which ultimately led to
the largest one-year cruise prising decline in all business. Events such as the terrorist
attack in U.S on September 11, 2001 and the threats of additional attack in the U.S
adversely affected the demand for cruises.
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3.1 INTERNAL ENVIRONMENT

a) Corporate Structure
A standard corporate structure consists of various departments that contribute to the
company's overall mission and goals. Common departments include Marketing,
Finance, Accounting, Human Resource, and IT. These five divisions represent the major
departments within a publicly traded company, though there are often smaller
departments within autonomous firms. There is typically a CEO, and Board of Directors
composed of the directors of each department. There are also company presidents, vice
presidents, and CFOs. There is a great diversity in corporate forms as enterprises may
range from single company to multi-corporate conglomerate. The four main corporate
structures are Functional, Divisional, Geographic, and the Matrix. Carnival Corporation
serves major market segments through Carnival, Holland America, and Seaborne in
joint venture. Decision-making is centralized, with top management and the Board of
Directors controlling all strategic decisions. The corporation attempts to reduce routine
decision-making by standardizing shipboard operations when possible.
b) Corporate Culture
Corporate culture is the pervasive values, beliefs and attitudes that characterize a
company and guide its practices. To some extent, a company's internal culture may be
articulated in its mission statement or vision statement. Carnival Corporation's culture
seems to internalize the concept of providing guests with the highest service standards
while keeping a firm grip on operating costs. There is significant corporate pride
regarding Carnival's position as the leader and innovator in the cruise industry.
c) Corporate Resources
Corporate resources are basically the sum value and properties-employees like
human capital of the company. Human, financial, physical, and knowledge factors that
provide a firm the means to perform its business processes.
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i) Marketing
Carnival Corporation's main marketing objective is to hold on to its 44% market
share in the cruise industry. It plans to retain the leadership position through aggressive
promotional campaigns by gaining loyalty from former cruisers and by being innovative
in shipboard activities and operations. Carnival's cruise product is well-defined and
positioned to serve three major markets: contemporary, premium, and luxury. Carnival
Cruise Lines (contemporary) targets young and first-time cruisers with moderately
priced packages which include airfare and a variety of shipboard amenities. Prices are
competitive with those of other similar cruise and land-based packages. The "Fun Ship"
cruise theme markets the ship itself as the primary vacation destination, with ports-ofcall being of secondary importance. Holland America Lines (premium) is positioned to
attract higher income travellers with cruise prices averaging 25-35% higher than
Carnival Cruises. HAL serves an older, more established clientele. Carnival provides
additional vacation opportunities through Westmark Hotels, Westours, Gray Line Tours,
and the McKinley Explorer railroad coaches in Alaska. These auxiliary tours and hotels
are marketed primarily to satisfy growing demand for Alaskan land vacations in
conjunction with Carnival's Alaskan cruises. Seaborne serves the luxury market with
South American, Mediterranean, Southeast Asian, and Baltic cruise destinations.
Seaborne serves very wealthy clientele with worldwide cruises up to 98 days' duration.
Windstar Sail Cruises serves a specialty cruise niche with ships that have small
capacity (fewer than 150 guests) and can approach smaller, less travelled ports-of-call.
Carnival Corp. was the first cruise operator to advertise on television. Carnival books
99% of its cruises through travel agents and has implemented an incentive program to
reward travel agents who suggest a Carnival cruise before other vacations.
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ii)
Finance
Currently Carnival Corporation's primary financial consideration is the control of
costs in order to maintain a healthy profit margin (greater than 20%). Another main
concern is the current expansion plan funded by internal growth. The financial ratios
show several areas that need to be addressed in the company. Carnival has very low
liquid assets, as evidenced by the low current and quick ratio, and has negative working
capital, which may cause creditors to doubt whether Carnival can meet its current
obligations. Overall, the liquidity of the company is very poor but may be common to the
industry since so much money is tied up in the fixed assets portion of the balance
sheets. In other areas, Carnival is doing much better with a profit margin of 22%, ROI of
11%, and ROE of 19%. The company isn't overburdened by debt and has two revolving
credit agreements for a total of $1 billion, $815 million of which is still available for the
refurbishing and building of ships. In the past five years the corporation has experienced
losses due to the discontinuation of the Fiestamarina Line and two of its hotels. Carnival
recently purchased $101 million of secured notes issued by Kloster Cruise Lid.
(Norwegian Cruise Lines). Kloster has experienced financial difficulties, and if the
company fails, Carnival will be in position to claim a portion of Kloster's assets. A
financial strength of Carnival Corp. is that it is registered as a Controlled Foreign
Corporation and thus is exempt from U.S. Federal income taxes at the corporate level.
iii)
Research and Development

Carnival relies on RD on the part of its shipbuilders to produce faster, more fuel
efficient, technologically advanced ships. Carnival also uses service RD to implement

and improve shipboard entertainment and activities to serve the disparate needs of the
three market segments they serve.
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iv)
Operations
Main operations consist of the twelve cruise lines and the auxiliary tours and hotels
mentioned in the analysis of marketing. The company expects to take delivery of ten
new ships (including several "superliners") in the next four years; seven for the Carnival
Line, two for the Holland America Line, and one for Windstar. These ships will result in a
20,484 passenger increase over Carnival Corp.'s current capacity and cost $3.3 billion.
This expansion will enable Carnival to stay competitive with its rivals, who are also
expanding, but if future demand remains depressed, the extra capacity could negatively
affect future profitability. The major strength of Carnival's operations is that they are very
efficient; it has the lowest break-even point of any organization in the cruise industry. It
has also been able to achieve significant economies of scale by standardizing layout
and shipboard operations on its ships. Carnival's fixed costs make up 33% of the
company's operating expenses, and they can't be reduced in proportion to decreases in
passenger loads and revenues. Major variable costs as a percent of operating expense
are as follows: airfare (25-30%), travel agent fees (10%), and labour (13-15%).
Shipboard operations are very labour-intensive, which results in high labour costs.
Carnival Corporation's cruises are also subject to general threats in the environment
such as political conflicts and natural disasters in areas where they cruise.
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4.0
TASK ENVIRONMENT
Task environment analysis is defined as an external environment of an organization
that will affects that organization ability to achieve its business goals. Furthermore, any
business or consumer with direct involvement with the organization might be a part of
the task environment as well. For instance, the customers, labour supply, competitors
and suppliers.
4.1 Porters five force analysis
4.1.1 Rivalry among competing firms-High
In industries, firms actively compete against one another. Competitive rivalry
intensifies when a firm is challenged by a competitor actions or when a company
recognizes an opportunity its market position. They able seek to differentiate
themselves from competitors. In this case, Carnival Corporation does have a high
competition among Royal Caribbean and Star Cruises in being a market leader in this
part. Star cruises is a member of Genting Hong Kong, is the sixth largest cruise line in
the world behind companies where it include Carnival Corporation. Star cruises
dominates the Asia Pacific market and even in credited with almost single handily
developing the cruises industry in Asia Pacific region. Its foray into the global shipping
market as allowed it to tap into lucrative and more mature market in North America and
Europe.net income of Star Cruises is 17.91 Billion for 2007. Meanwhile, Royal
Caribbean, carnivals most aggressive competitor, is a global cruises vacation company
that operates royal Caribbean international, Celebrity Cruises, Pullmantur, and Azamara
Cruises. The company currently has 35 ships at sea and there is 6 under construction.
Royal Caribbeans brand offers a range of on board activities, services, and amenities to
travelers and also offers unique land tour vacation. The net income of Royal Caribbean
is 523.25 Million. Moreover, cruise line industry is highly concentrated with two major
players, which is Carnival with 51.6% of market share and Royal Caribbean with 25.6%
of market share. (cruise market, 2011). After a series of incidents that happened earlier
this year, the majority of cruise line companies had to slash prices in the face of
decreasing market size and consumers choosing safer vacations. The combination of
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undifferentiated services, low consumer switching cost, and high exist cost, contributes
to high intensity of rivalry.
4.1.2 Threat from new entrants- Low
Entry barriers make it difficult for new firms to enter an industry an often place them
at a competitive disadvantage even when they are able to enter. As such, high entry
barriers tent to increase the returns for existing firm in the industry and may allow some
firms to dominate the industry. Several kind of potential significant entry barriers may
discourage competitor from entering a market such as economic of scale, product
differentiation, capital requirement, switching costs and access to distribution channels
and government policy. For Carnival Corporation, an entry barrier for a new competitor
is low unless the entry barrier for a new competitor is high. Even they may have
chances to face with legal factors to start the business. They also have strong
relationship with variety of suppliers and solid reputation for attracting customers, which
will be challenging for new entrants to access and replicate. Therefore, any new entrant
will require intensive capital investment for ships and labour, which create significant
barriers to entry. However, still there numerous new entrepreneurs and companies
trying to enter the emerging Asian-pacific markets (Yi, Day & Cain, 2011).
4.1.3 Threat of substitute products High
Substitute products are goods or services from outside a given doing assignment
from outside a given industry that perform similar or the same functions as the product
that the industry produces. In general, products substitutes present a strong threat to a
firm when customer face few, if any, switching costs and when the substitute products
price is lower or its quality and performance capabilities are equal to or greater than
those of competing product. Travellers who choose to be carnival corporation
passenger have many choices to spend their vacation like spending their holidays by
going to theme parks. It is not a compulsory for someone to go after the provided
services but still they have many alternatives to be on their way on choosing their
vacation place which generate the highest levels of extreme satisfaction. Although
consumers may choose an all-inclusive vacation at a resort offered at a cheaper price,
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cruise ships are continuously improving their amenities to create a differentiated

vacation experience.
4.1.4 Bargaining power of suppliers- Moderate
Increasing prices and reducing the quality of the product are potential means
suppliers use to exact powers over firm competing within and industry. If a firm is unable
to recover cost increases by its suppliers through its own pricing structure, its
profitability is reduced by its suppliers action. A supplier group is powerful when it is
dominated by a few large companies and its more concentrated than the industry to
which it sales. Carnival corporation need suppliers to support and supply their service
toward to the customers. Its actually have fulfilled the basic requirement for the cruise
such as fuel, food, water, air conditioner, and basic needs of customers. However, fuel
is generally a consolidated industry with a limited number of suppliers, limiting Carnival
Corporations influence in the industry. To curb buyer pressure, ship manufactures
create high switching costs in the form of tailored designs (Levin, Jones & Slade, 2012).
4.1.5 Bargaining power of consumers- Moderate
Firm seek to maximize the return on their invested capital. Alternatively, buyers want
to buy are products at the lowest possible price-the point at which the industry earns
the lowest expectable rate of return on its invested capital. To reduce their cost, buyers
bargain for higher quality, greater levels of service and lower prices. Carnival
corporation do have many competitor as above mentioned. There are many competitor
and substitute faced for the cruise vacation industry for the customers to choose from.
Customers have many alternative or substitute choice to go after with. It is not a must
for a vacationer to choose a particular company for the vacation purpose but still have
many idea of selecting different company where they felt more content with. This is the
time and situation where this competing company would face the challenges to compete
with other customers perception on other competing company. The increased access to
information for customers via newspaper, TV, and the internet has diluted the power of
travel agents and consequently, consumers themselves, travel agencies cannot
demand lower prices with less purchase volume (Jainchill, 2012). Additionally,
23

customers are widely distributed around the world and cannot establish a unified
presence capable of minimizing Carnivals influence as the largest cruise provider in the
world (Levin, Jones & Slade, 2012).
4.1.6 Overall of Task Environment Analysis
Based on the analysis above, we know that in the Carnival corporation, the threat
of new entrants is low, the rivalry among existing firm is high, the threat of substitute
product is high, the bargaining power of buyers is moderate and the bargaining power of
suppliers is moderate.
24

5.0 CARNIVAL CORPORATION & PLC SWOT ANALYSIS

5.1
STRENGTH
Dominant Market Share

Carnivals biggest strength is its huge scale and scope which is twice as large as
its biggest competitor and competes in nearly every market and segment worldwide.
This gives Carnival Corp. tremendous power over the cruise industry as a whole. It
enables the company to undertake projects that grow the industry, gives it a platform for
continued acquisitions and M&A activity, and helps the company negotiate with major
manufactures of cruise ships.
ii
Operational Excellence and Experience

Carnival Corp. & PLC has achieved below-industry-average costs and above-
average revenue historically. This is largely due to the companys immense experience
in owning and operating cruises, as well as some smart strategic plays. That advantage
makes expanding into new markets vastly easier for the company than for a smaller
player or upstart firm. Carnival also has the largest pool of data to draw on to determine
what does and does not work, and has the most experienced marketers of cruises in the
world. These advantages let this company potentially segment its customers more
efficiently than competitors.
5.2
WEAKNESS
Uncoordinated Business Operations

Previously, Carnival has been run by the Arison family as a coalition of largely
independent business. Each cruise line largely manages its own customers, marketing,
distribution, sales, ports, and logistics. This approach has had benefits which the
internal competition means that each line operates better than any would in isolation.
25

The single biggest change that Carnival should implement to take advantage of
its overall market share is to reduce the number of new ships ordered companywide.
With its current ships on order, carnival is slated to increase its market share slightly
which is the exact opposite of correct competitive behavior. This is likely to happen
because each cruise line takes projected costs and benefits when ordering new ships,
not realizing that each new order drives down prices across the industry and into
Carnivals other brands. Accordingly, in order to exploits its strategic position in a better
way, Carnival should reduce new ship production and re-invest the money into retrofits
and marketing-spending which will help improve overall fleet quality without saturating
the market.
ii
Poor Safety Record

The Costa Concordia tragedy has been the most recent in Carnivals safety
woes. Shortly after, the Costa Allegra suffered an engine fire and was adrift in the pirateridden Indian Ocean for several days. These large, visible accidents require that a
cruise ship be scrapped for months, and they also generate huge negative publicity,
hurting both Carnival and the cruise industry as a whole.
Carnival has a notably worst safety record than other cruise companies. While
there is no public database of major cruise accidents such as the Costa Concordia
disaster, the Center for Disease Control does track all major viral outbreaks on cruise
lines. The company is also thought to have a worse safety record for persons lost at
sea, especially in the Carnival brand; of the 179 disappearances since 2000, Carnival
Cruise line alone accounts for nearly 30% of them.
26

5.3
OPPORTUNITIES
Strongly Favorable Demographics

In the cruise industry, peoples below the ages of 65s are considered as the
young se. As populations across Europe and North America age, Carnivals target
market is growing larger. Carnivals branding, segments, and market share make it the
best-positioned cruise line overall and the company is already well positioned to take
advantage of this trend.
To take full advantage of this trend, Carnival needs to ensure that the baby
boomers currently in their 50s and early 60s embrace the cruising experience. There is
one way to do so which is by identifying individuals poised to take their first cruise, or
entering a new stage of life where frequent Mediterranean getaways are a realistic
possibility.
ii
Exploding Asian Market

Asian customers accounted for only 9.8% of global cruise revenues in 2010.
However, this market segment grew by almost 40% driven by a new, affluent class and
aging demographics across the Asia-Pacific region. Unfortunately, Carnival has lagged
behind in the Asian market as a whole. After an exploratory and failed bid in Asia in the
early 2000s, Carnival recently set one ship to capture the Asian market on 6 months of
time per year.
There are three strategies that the company might adopt in response to this
opportunity. First, Carnival could have continued to ignore the Asian customers as the
companys historic strength has been in marketing and execution to Western customers.
Second, Carnival could grow its business organically in Asia, either by expanding
current cruise lines to include Asian-language service and Asian ports of destination, or
by introducing new brand to the region. Lastly, Carnival can slightly pursue an
acquisition with Star Cruise Line.
27

5.4
THREATS
Geopolitical Instability
In 2011, the Arab Spring revolutions caused significant upheaval across the
Eastern Mediterranean. While laudable from a democratic perspective, these types of

disruption also tend to shut down cruises. The Eastern Mediterranean is a relatively
small market and a carnival must watch for future threats and react appropriately.
However, most geopolitical threats are unavoidable from Carnivals perspective.
And then, the most cruisers are not wedded to a specific destination. When Carnival is
prepared to pivot quickly from one region to another, then the losses from these cruises
can be minimized.
iii
Fuel Price Risk

Fuel cost constitute is a significant small portion of Carnivals cost structure. In
2011, although fuel price were relatively high by historical standards, total fuel cost were
$2.19B, or about 20% of total cruise operating expenses. Additionally, fuel cost are
much more volatile than other cost, creating more short-term risk. This proportion,
unfortunately, has grown sharply.
Moreover, cruise have two weapons against high fuel prices, there are pricing
and derivatives. Because all main cruise lines price to fill capacity, at first glance they
would appear to have little market power in response to short-term fuel price change.
However, recently Carnival and other cruising companies have imposed fuel surcharge
fees. These fees often are not apparent until quite late in the cruise booking process,
so the surcharges upset relatively few customers and add some extra revenue.
So, Carnival might consider putting pressure on its ship builders to deliver more
fuel-efficient designs. While the technical feasibility of this approach is beyond the
scope of this report, the is potential for differentiation and innovation. As by far the
largest new build purchaser Carnival is in apposition to assume leadership and request
innovation.
28

6.0
TOWS MATRIX
1
2
3
4
SO Strategies
Expand P&O Cruise Line (Australia) by 2 ships by 2016.
Expand Costa Cruise Line (Asia) by 2 ships by 2016.
Increase technology advancements on 50% of our fleets by 2014.
Increase number of cruise available by 25%.
ST Strategies
Continue cost saving fuel energy practices by installing energy reduction technologies on
2
3
4
our ships.
Offer departing specials from 8 homeports in North America.
Custom prepared healthy meals for guests on our Seabourn Yachts.
Increase safety and security awareness on all 10 cruise lines, by offering special
advertising reassurance to travel on CCL.
1
2
WO Strategies
Launch four new vessels by 2014.
Create marketing campaign for baby boomer generation to revamp our brand on safety
3
4
or security.
Upgrade Carnivals Website Services for online booking/questions.
Promote loyalty membership program on all luxury fleets to secure brand loyalty.
WT Strategies
Add 1 employee per 100 guests to inform them of any safety or security issues while on
2
3
4
6.2
board any Carnival Cruise Line Ships.

Raise ticket price by 10%.
Create a new employee division to oversee and maintain all maintained on cruise ships.
Renovate five ships with solar powered technology to reduce cost.
IFE MATRIX
INTERNAL FACTOR EVALUATION MATRIX (IFE)

Strength
1
Weight Ratin
Carnival Corporation and PLC is the largest cruise company 0.08
Weighted
g
4
Score
0.32
0.15
in the world, having 48.4 % of worldwide market share in

2
passengers
Passenger Capacity has increased over the last 4 years at an 0.05
29

average rate of 3.59%.

Fuel consumption has been reduced 21% since 2007, with a 0.06
0.18
projection to reduce fuel consumption by another 5% per

4
unit.
The Holland America line has the highest rate of repeat 0.05
0.15
customers in the cruise industry.

Seabourn Yachts have a service ratio of one staff member to 0.04
0.12
one guest.
P&O Cruises is the leading Australian cruise line, with 300 0.04
0.16
passengers in 2012.
In 2012, our North America brand represented 61% of our 0.06
0.24
total passenger capacity.

Carnival Corp & PLC owns 40% interest in Grand Bahamas 0.07
0.21
repair facility in the world.

Carnival Cruise Line operates from 19 homeports in North 0.05
0.20
10
America, which is more than our competitors.

Carnival Cruise Lines and PLC serves 8.5 million guests a 0.06
0.24
000 passengers annually. P&O Cruises (Australia) carried

almost half of all Australia and New Zealand cruise
Shipyard, LTG, which is the largest cruise ship dry-dock
year and has 10 distinct cruise lines under ownership.
Weakness
Weight
Rating
Weight
Score
1
The net income was $1,298 in FY2012, a decrease of 6%
0.05
0.05
0.04
0.04
employees and all others working on behalf of the 0.07
0.07
0.10
as compared to 2011
2
Revenues declined $410 million in 2012
3
Protecting the health, safety, and security of our guests,
company since Costa Concordia tragedy.
4
Carnival Corporation &PLC accounts for
disappearances of guests at sea since 2000.
30% of
0.05
30

5
Communicating with passengers and employees, if in
0.05
0.10
0.06
0.06
0.02
0.04
0.01
0.02
areas: funds directed at travel agents, including 0.06
0.06
0.06
crisis mode while sailing. (Costa Concordia tragedy)

6
During 2012, $28 million was spent for ship incidentrelated expenses that were not covered by insurance.
7
Sales of cruises mainly booked through travel agents cost
10% of sales fees and additional commissions.
8
Cash can only be used in the gaming area of the boat
9
Full brand recovery from Costa Concorida tragedy will
take 2-3 years, extra marketing would come in three
cooperative advertising; social media; and possibly more
TV ads.
1
0
Loyalty program was recently expanded to six tiers from

two, downgrading some members to lower membership 0.03
level and taking away perks.
TOTAL
6.3
1.00
2.57
EFE MATRIX
External Factor Evaluation Matrix (EFE)

Opportunities
Weight Rating
Weighted
Score
Long term expansion in Asian Vacation Markets due to

increased prosperity and size of Asian countries (2012: 8%
and 2013: 10%)

Worldwide, the
cruise
industry
has
an
0.05
0.15
0.07
0.28
annual
passenger compound annual growth rate of 7% from 1990

2017.
31

3
4
Unveiling of nine cruise ships through March 2016.

4
0.20
0.04
0.12
0.05
0.15
0.05
0.15
0.07
0.21
0.06
0.24
0.04
0.08
0.06
0.18
The UK Provides the largest number of cruise passengers

sourced in Europe; 1.8 million are estimated to have cruised
in 2012.
Europeans and Australians have significantly more vacation
days a year than North Americans (4 weeks paid vacation).

The age group of 45 years and older is expected to grow by
13% in US and Canada and 11% in the major Western
European countries by 2022.

The global travel and tourism industry is expected to grow
approximately 2.8% during 2012.

Almost 60% of the cruise passengers in the world are
sourced from the North American region, where Carnival
0.05
Corporation has 19 US ports.

Demand for technology growing on cruise ships; In the past
five years, Internet logins on the MTN network almost
doubled from approximately 15 million to 27 million per
10
year.
Cruising is
about
five
percent
of
the overall vacation market and is the fastest growing

segment of the travel industry.
6.4
Threats
Weight Rating
Weighted
Score
1
2
3
A 6.3% increase in fuel prices, since February 2013. (Fuel

0.06
accounts for 20% of cruise ticket price)
The Costa Concordia and European sovereign debt crisis
0.05
impacted all cruise line revenues by about -5.1%
Increasing cost of ship building; In 1990 it cost $250
million to build a ship, where as in 2012 it cost $740
0.05
0.12
0.15
0.15
million.
32

4
5
6
7
8
Safety and security of travel- terrorism, drug attacks, vessel

0.08
seizures
Royal Caribbean passengers carried increased 0.3% last
0.05
year
Currency risk- the US dollar decreased 0.3% in Feb. 2013
0.06
The United States unemployment rate is currently still high
0.03
at 7.40%
Trend toward healthy eating and lifestyles; 1 in 4
Americans are currently on a diet, which is 25% of US
Americans.
Global warming is causing the oceans to absorb a great deal
10
of extra heat (up to 90%).

Increase of corporate tax
0.08
0.10
0.18
0.12
0.04
0.12
0.02
0.04
0.02
0.02
TOTAL
1.00
7.0
2.84
Nature of Ratio Analysis

Ratio Analysis is a powerful tool of financial analysis. A ratio is defined as "the
indicated quotient of mathematical expression" and as "the relationship between two or

more things". Ratio Analysis is a form of Financial Statement Analysis that is used by
our company to obtain a quick indication of a firm's financial performance in several key
areas. The ratios are categorized as Short-term Solvency Ratios, Debt Management
Ratios, Asset Management Ratios, Profitability Ratios, and Market Value Ratios.
A ratio is used as benchmark for evaluating the financial position and
performance our firm. The relationship between two accounting figures, expressed
mathematically, is known as a financial ratio. Ratio Analysis as a tool possesses several
important features. The data, which are provided by financial statements, are readily
available. The computation of ratios facilitates the comparison of firms which differ in
size. Ratios can be used to compare a firm's financial performance with industry
averages.
33

In addition, ratios can be used in a form of trend analysis to identify areas where
our firm performance has improved or deteriorated over time. Ratio helps to
summarizes large quantities of financial data and to make qualitative judgment about
our firm's financial performance.
7.1
Ratio Analysis
Financial Ratios - Liquidity

Royal Caribbean
Liquidity Ratios
Current Ratio
Quick Ratio
Net Working Capital Ratio
Operating Cash Flow
Cash from Operations to Total
2010
2009
2008
2007
2006
0.295
0.199
0.295
0.483
0.142
0.373
0.227
0.373
0.307
0.079
0.365
0.252
0.365
0.401
0.111
0.424
0.233
0.424
0.542
0.154
0.268
0.155
0.268
0.507
0.130
(0.152)
(0.119)
(0.006)
(0.032
Debt
Free Operating Cash Flow to (0.045)
Total Debt
Carnival Cruises
(in million)
2010
2009
2008
2007
2006
34

Liquidity Ratios
Current Ratios
Quick Ratio
Net Working Capital Ratio
Operating Cash Flow
Cash from Operations to Total Debts
Free Operating Cash Flow to Total
0.216
0.118
(0.120)
0.663
0.264
0.017
0.306
0.181
(0.094)
0.673
0.226
(0.003)
0.285
0.185
(0.124)
0.587
0.237
0.003
0.272
0.190
(0.155)
0.560
0.286
0.053
0.368
0.2606
(0.112)
0.671
0.294
0.093
Debt
7.2
Financial Ratios Probability
Royal Caribbean
Profitability Analysis Ratios
ROA
RNOA
2010
2.887%
3.303%
2009
0.936%
0.985%
2008
3.649%
3.882%
2007
4.253%
5.023%
2006
5.144%
11.020
NOAT
40.739
35.710%
44.207
51.187
%
90.907
NOPM
%
8.108%
2.758%
%
8.783%
%
9.813%
%
12.122
ROE
7.091%
2.271%
8.462%
9.392%
%
10.886
Profit Margin
8.108%
2.758%
8.783%
9.813%
%
12.122
%
Carnival Cruises
Profitability Analysis Ratios
ROA
RNOA
NOAT
2010
5.323%
6.835%
44.881%
2009
5.09%
6.412%
42.133%
2008
6.895%
8.599%
49.490%
2007
7.440%
9.446%
2006
7.738%
18.874
47.503
%
90.870
%
35

NOPM
15.229%
15.218%
17.375%
12.616
12.988
%
12.988
ROE
8.777%
8.703%
11.930%
%
12.616
Profit Margin
13.671%
13.605%
15.909%
%
18.476
%
19.250
2007
0.712
0.316
0.416
7.425
2006
0.678
0.349
0.404
8.375
7.3
Financial Ratios Activity & Leverage
Carnival Cruises
Leverage Ratios
Debt to Equity
Long Term Debt to Equity
Debt Ratio
Times Interest Earned
Activity Analysis Ratios

Assets Turnover
2010
0.628
0.348
0.386
6.209
2010
0.343
2009
0.672
0.413
0.402
5.668
2009
0.323
2008
0.749
0.405
0.428
6.592
2008
0.397
2007
0.410
2006
0.390
2007
1.217
2006
1.199
Royal Caribbean
Leverage Ratios
Debt to Equity
2010
1.480
2009
1.431
2008
1.420
36

LT Debt to Equity
Debt Ratio
Times Interest Earned
1.046
0.597
2.613
1.065
0.589
1.541
1.027
0.549
2.753
0.871
0.549
2.808
0.891
0.545
3.367
Carnival Forecasting and Equity Value

Net Sales Growth
Net sales (unrounded)
Net Sales (rounded)
NOPAT
NOA
14,469.00
14,469.00
2,203.48
2203.48
32395.00
15,235.86
15,236.00
2,082.85
2082.85
33947.46
4.70%
15,915.94
2,180.74
2180.74
35342.78
Book Value Multiple Forecasting

Equity Intrinsic Value
$20829114240.39
Equity Intrinsic Value per Share : $34.72

Residual Operating Income Model :
Firm Equity Value
Equity Value per Share
Current Share Price
Carnival Corporation and PLC

Stockholders Equity
Net Income x 5
(share price/EPS) x Net Income
Number of Shares Outstanding x Share Price
Method Average
Royal Caribbean
Stockholders Equity
Net Income x 5
(share price/EPS) x Net Income
Number of Shares Outstanding x Share Price
Method Average
7.4
Internal Strengths
: $17271800744.12
$28.79
$30.65
$19,414
$6490
$24117
$28942
$19741
$7876
$92
$1999
$8157
$4531
37

Carnival Corporation and PLC is the largest cruise company in the world, having
48.8% of worldwide market share in passengers. Passenger capacity has increased
over the last 4 years at an average rate of 3.59%. fuel consumption has been reduced
21% since2007, with a projection to reduce fuel consumption by another 5% per unit.
The Holland America line has the highest rate of repeat customers in the cruise industry.
Seaborm Yachts have a service ratio of one staff to one guest.
In 2012, our North America brand represented 61% of our total passenger
capacity carnival Corp & PLC owns 40% interest in Grand Bahamas Shipyard, LTG,
which is the largest cruise ship dry dock repair facility in the world. Carnival Cruise Line
operates from 19 homeports in North Americ, which is more than our competitors.
Carnival Cruise Lines and PLC serves 8.5 million guests a year and has 10 distinct
cruise lines under ownership.
7.5
Internal Weaknesses
The net income was $1,298 in FY2012, a decrease of 6% as compared to 2011
while revenues declines $410 million in 2012. Carnival Corporation & PLC accounts for
30% of disappearances of guests at sea since 2000. During 2012, $28million was spent
for ship incident-related expenses that were not covered by insurance. Moreover, sales
of cruises mainly booked through travel agents cost 10% of sales fees and additional
commissions. Internal weaknesses Carnival Corporation also like cash only be used in
the gaming area of the boat.
38

8.0
Strategy Alternatives and Recommended Strategy carnival cruise

Continue to merge and acquire a diverse offering of vacation cruise lines. Focus
on four target market sector cruise types: family, love boat, learning, and leisure. While
this strategy allows for rapid expansion, it also opens the door for rapid failure.
Emerging target markets and ports of call will provide the potential for increased cruise
vacationers. This method could prove to be very expensive, as in the merger with
Princess.
Offer expanded learning cruises for families and students alike. With the
possibility of increased market share that comes with an offer of a broader range of
cruises, Carnival also risks losing its devoted core market if it loses focus. The American
cruise market remains grossly underdeveloped. With the introduction of trips to outer
space for civilians currently going for $1 million per person, a cruise package priced at
$125+ per day per person still seem quite reasonable.
Begin to expand horizontally with the acquisition of private Island resorts or ports
of call where cruisers may debark from the ship and enjoy ultra-premium resorts, shops,
and hotels that are opened only to cruise passengers. The focus would be on the
destination not so much the cruise itself as in the past. These cruise vacations could be
provided at a lower cost because of the private ownership of ports of call. This will
expose Carnival to new liabilities as well as extraordinary opportunities. In concert with
the drive and cruise programs, the cruise vacation will become affordable for many
more people than ever before imagined.
39

9.0
Conclusion
Carnival corporation & PLC operates is a well-being and strength is a major
component to the country economy. They carry the aspirations and pride of the nation.
Carnival has a portfolio of most recognized cruise brands is geographic areas
accounting for 85% of the world cruise passengers and attracting 10 million guest
annually.
Carnival Corporation & PLC operates updated with latest technologies and
innovations.
Their service gives more satisfaction to their customers.
Carnival
Corporation controlling operations in North America, Carnival UK controlling operations

in the United Kingdom and Costa Cruises Group Controlling Operations in the rest of
Europe. They also have many brand caters to increases their company profit.
40

10.0
References
Retrieved on March 20, 2015 from,

http://www.slideshare.net/mmclean487/financial-statement-analysis-13460536
Building Communities & Beyond (2015). Annual Report 2013.
Retrieved on March 20, 2015 from,

http://bcbbhd.com.my/investor-relations/5-year-financial-highlights/
Carnival Corporation. (2006). Corporate information. Retrieved from

http://phx.corporate-ir.net/phoenix.zhtml?c=200767&p=irol-prlanding
Cruise Line International Association. (2011). 2011 Cruise market profile study.
Retrieved from
http://www.cruising.org/sites/default/files/pressroom/Market_Profile_2011.pdf
Cruise Industry News. (2013, April). Global fleet growth at 2% per year to 2021.
Retrieved from
http://www.cruiseindustrynews.com/cruise-news/8996-global-fleet-growth-at-2per-year-
41

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STRATEGIC MANAGEMENT (BPMN 3023) 1

STRATEGIC MANAGEMENT (BPMN 3023) 2

STRATEGIC MANAGEMENT (BPMN 3023) 3

2.1 Core business

STRATEGIC MANAGEMENT (BPMN 3023) 4

STRATEGIC MANAGEMENT (BPMN 3023) 5

STRATEGIC MANAGEMENT (BPMN 3023) 6

STRATEGIC MANAGEMENT (BPMN 3023) 7

2 Sir Jonathon Band

STRATEGIC MANAGEMENT (BPMN 3023) 8

STRATEGIC MANAGEMENT (BPMN 3023) 9

STRATEGIC MANAGEMENT (BPMN 3023) 10

6 Sir John Parker

STRATEGIC MANAGEMENT (BPMN 3023) 11

STRATEGIC MANAGEMENT (BPMN 3023) 12

STRATEGIC MANAGEMENT (BPMN 3023) 13

STRATEGIC MANAGEMENT (BPMN 3023) 14

3.0 General Task of Carnival Cooperation

Political and Legal

STRATEGIC MANAGEMENT (BPMN 3023) 15

its revenue yields, and to optimize the

STRATEGIC MANAGEMENT (BPMN 3023) 16

STRATEGIC MANAGEMENT (BPMN 3023) 17

3.1 INTERNAL ENVIRONMENT

STRATEGIC MANAGEMENT (BPMN 3023) 18

STRATEGIC MANAGEMENT (BPMN 3023) 19

Research and Development

efficient, technologically advanced ships. Carnival also uses service RD to implement

STRATEGIC MANAGEMENT (BPMN 3023) 20

STRATEGIC MANAGEMENT (BPMN 3023) 21

STRATEGIC MANAGEMENT (BPMN 3023) 22

STRATEGIC MANAGEMENT (BPMN 3023) 23

cruise ships are continuously improving their amenities to create a differentiated

STRATEGIC MANAGEMENT (BPMN 3023) 24

STRATEGIC MANAGEMENT (BPMN 3023) 25

5.0 CARNIVAL CORPORATION & PLC SWOT ANALYSIS

Dominant Market Share

Operational Excellence and Experience

Uncoordinated Business Operations

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Poor Safety Record

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Strongly Favorable Demographics

Exploding Asian Market

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Eastern Mediterranean. While laudable from a democratic perspective, these types of

Fuel Price Risk

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board any Carnival Cruise Line Ships.

INTERNAL FACTOR EVALUATION MATRIX (IFE)

Carnival Corporation and PLC is the largest cruise company 0.08

in the world, having 48.4 % of worldwide market share in

STRATEGIC MANAGEMENT (BPMN 3023) 30

average rate of 3.59%.

projection to reduce fuel consumption by another 5% per

customers in the cruise industry.

total passenger capacity.

repair facility in the world.

America, which is more than our competitors.

000 passengers annually. P&O Cruises (Australia) carried

Shipyard, LTG, which is the largest cruise ship dry-dock

year and has 10 distinct cruise lines under ownership.

employees and all others working on behalf of the 0.07

STRATEGIC MANAGEMENT (BPMN 3023) 31