Overall carnival corporation dominates the industry

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Overall, Carnival Corporation dominates the industry, with 52.9% of the North American market share and 51.6% of the rest-of-world market share. Its most formidable competitor, Royal Caribbean, has only 27.6% of the North American market share and 25.6% of the rest-of-world market share. Such high market concentration means that there is the potential for collaboration among industry leaders, which might in turn reduce the possibility and intensity of price competition. The cruise line industry has relatively high competitor diversity and a moderate level of product differentiation. Carnival and Royal Caribbean are each more than 3x the size of the next largest competitor. Carnival Corporation’s multiple brands create a competitive rivalry within the company; however, each brand caters toward a slightly different demographic or specializes in a particular market or geographic region. Overall, it suggests that the competitive rivalry is quite high for Carnival Corporation and Plc. Implications of Porter Five Forces on Carnival Corporation By analyzing all the five competitive forces of porter’s model, Carnival Corporation strategists can gain a complete picture of what impacts the profitability of the organization. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. PEST analysis- The PEST analysis can be used to understand the forces acting upon Carnival Plc. and how it effects the firm. Along with the SWOT analysis this helps to broaden the understanding of the firm as well as the industry allowing for a better look into the current situation of Carnival Plc. and how the firm can proceed to fulfil its visions. 10
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Category Situation and factors at play Effects on Carnival Plc. Political The increasing growth in global tourism combined with the growth of the cruise industry has raised a serious concern for passengers’ security and safety (Dowling, 2006). Cruise liners take a risk when entering hostile region such as area near Somalia and Mexico (Dowling, 2006). Different taxation policies and regulations in different countries would also affect company profits (CCL, 2016a). Carnival Corporation’s operations would be affected if the appropriate security measures were not implemented. To improve the level of security CCL would need to spend extra money investing in its security systems. Economical Global economic output US$ 117 Billion in 2015(CLIA, 2016). Potential negative impacts of Brexit (Bridge, 2017). The Cruise industry also provides jobs for people working for restaurants, tourist attractions, tour operators and travel guides (Dale, 2007). Fluctuating price of marine fuel (i.e. crude oil) (Figure 1). Fluctuating exchange rates (CCL, 2016a). The fluctuating exchange rates would affect cruise passengers’ purchasing power when they travel to foreign destinations.
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