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Threat of Substitutes:Carnival Corporation and plc has many threats of substitutes facing it, not only in therealm of other competitors but also the choice that customers have to select other types ofvacation experiences. Customers have the option to choose from land-based vacations todestinations world-wide versus an excursion based vacation on a cruise. For example, Carnivalcustomers have the option to take a seven-day cruise to Europe or take a ten-day vacation toEurope and experience more of an individualized and personal experience, being able to move attheir own pace. In order for Carnival to mitigate the risk of these threats it can firstly focus lesson product orientation and thrive off of service orientation which is extremely harder tosubstitute. Secondly, Carnival can aim to increase heavily, the switching cost of its customersfrom taking a cruise to wanting to take a land-based vacation. Finally, the company can idealizewhat exactly is the core needs of the customer as opposed to what they are offering as availableCarnival Cruise Line Case Analysis Rolle | Rizo | Alcindor11
options for purchase. By making available to customers what they want will decrease the threatof substitution.SWOT ANALYSISStrengths:Carnival Cruise Lines and plc is known as one of world most successful and top brand cruiselines. Firstly, their brand is one of the most important strengths that is acquainted to them.Universally, their brand is easily recognizable, and they have built an empire that can defenditself. Brand equity is high with Carnival and this high brand equity is very important simplybecause it is respected by customers, industry competitors and the overall market. It also givesthem the freedom to raise prices during peak seasons and still see increases in passengers.Secondly, the achievement of economies of scale is a huge strength that Carnival has mastered.The company is able to take advantage of their large size to gain cost benefits over some of theircompetitors. The ability to operate on economies of scale is a major strength for Carnivalbecause it has been able to reach its optimum goals whilst keeping expenses at a constant or nearto constant rate. Thirdly, the company has major financial profitability success. This is a pillar of strengthfor the corporation simply because it is a golden key for investors, stakeholders and even thegovernment. Between 2005 to 2009, the company surpassed industry standard average netincome of 6.3% by 11.8%, with an average net income of 18.1%. the strength of profitability isan advantage that is not easily overlooked by investors in the industry. Essentially, a company’sprofitability is highly credited to its success.Weaknesses:Carnival Corporation is heavily dependent on the United States market. This means that amajority of Carnival customers are coming from the United States. This is a major weaknessCarnival Cruise Line Case Analysis Rolle | Rizo | Alcindor12