Pestle Analysis The model helps in examining the external factors which affect the business. It also helps in aligning the organization strategies with those of the environment to ensure that a company does not fail. The analysis helps a company in avoiding strategic rules which are in conflict with the environmental forces. Political factors: Since CCL cruise lines operate on different countries, its operations may be affected by terrorism and other related factors. The increase in growth in tourism across the world has raised concerns for the passengers. Increase in terrorism activities may result in strict immigration laws which eventually reduce tourism (Dowling, 2006). For example, CCL cruise lines may face the risk of tourism when entering Mexico and Somalia borders. To reduce this impact, Carnival Corporation should adopt appropriate security measures. This entails the company investing funds in security systems. Political instability is another factor which affects cruise activities. Different taxation policies in different countries also affect CCL profitability. Economic factors: Since CCL transports tourists from one destination to another, changes in economic activities may negatively affect its operations. CCL has experienced a drop in tourism business due to fluctuating exchange rates. Additionally, the price of fuel price will fluctuate making the cruise industry will experience a drop in profitability (Bridge, 2017). The fluctuating exchange rates will also affect the purchasing power of passengers when they travel from one location to another. It will also affect the customer’s decision to use cruise lines hence reducing CCL performance. CCL also provides
CARNIVAL CORPORATION & PLC 4 jobs to personnel working in restaurants, travelling agencies and tour operators. Therefore, the potential Brexit would result in these people losing jobs. Social-cultural factors are affecting the cruise industry since many customers come from western and most affluent families who value lifestyle (Icahn, 2015). Due to this, CCL revenues mostly come from the advanced western countries. CCL customers come from different cultures with different demands. CCL needs to consider the needs of their customers to remain competitive in the cruise industry. Change in consumer’s preferences and the taste is also affecting the cruise industry as customers prefer other modes of transport such as air. To maintain the customers, CCL needs to maintain a good reputation on the public. As a result, the company is able to increase its sales and profitability. Technology: The cruise liners keep changing their fleets to acquire the most efficient ones. Some companies have adopted on board online entertainment to meet customer’s preferences and lifestyle (CCL, 2016). This is why line cruisers are investing in technology to make the fleet more customers friendly. The development of the CCL website enables customer’s book their voyage and hence reduces the costs incurred through agencies.
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- Fall '19
- Cruise ship, Holland America Line, ccl