Threat of Substitutes Carnival Corporation and plc has many threats of

Threat of substitutes carnival corporation and plc

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Threat of Substitutes: Carnival Corporation and plc has many threats of substitutes facing it, not only in the realm of other competitors but also the choice that customers have to select other types of vacation experiences. Customers have the option to choose from land-based vacations to destinations world-wide versus an excursion based vacation on a cruise. For example, Carnival customers have the option to take a seven-day cruise to Europe or take a ten-day vacation to Europe and experience more of an individualized and personal experience, being able to move at their own pace. In order for Carnival to mitigate the risk of these threats it can firstly focus less on product orientation and thrive off of service orientation which is extremely harder to substitute. Secondly, Carnival can aim to increase heavily, the switching cost of its customers from taking a cruise to wanting to take a land-based vacation. Finally, the company can idealize what exactly is the core needs of the customer as opposed to what they are offering as available Carnival Cruise Line Case Analysis Rolle | Rizo | Alcindor 11
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options for purchase. By making available to customers what they want will decrease the threat of substitution. SWOT ANALYSIS Strengths: Carnival Cruise Lines and plc is known as one of world most successful and top brand cruise lines. 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 defend itself. Brand equity is high with Carnival and this high brand equity is very important simply because it is respected by customers, industry competitors and the overall market. It also gives them 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 their competitors. The ability to operate on economies of scale is a major strength for Carnival because it has been able to reach its optimum goals whilst keeping expenses at a constant or near to constant rate. Thirdly, the company has major financial profitability success. This is a pillar of strength for the corporation simply because it is a golden key for investors, stakeholders and even the government. Between 2005 to 2009, the company surpassed industry standard average net income of 6.3% by 11.8%, with an average net income of 18.1%. the strength of profitability is an advantage that is not easily overlooked by investors in the industry. Essentially, a company’s profitability is highly credited to its success. Weaknesses: Carnival Corporation is heavily dependent on the United States market. This means that a majority of Carnival customers are coming from the United States. This is a major weakness Carnival Cruise Line Case Analysis Rolle | Rizo | Alcindor 12
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