Carnival being a large company has economies of scale for which they have a

Carnival being a large company has economies of scale

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Carnival being a large company has economies of scale for which they have a significant cost advantage over most of their competitors Carnival corporation has a huge global and international presence. They have strong consumer demand in the Europe Carnival aggressively and effectively invests in print and television media. Their promotions target the lifestyles of each group of customers. Carnival are "Fun Ships". This creates the image of high value entertainment. Carnival supports its travel partners with training, online marketing and exclusive offers and savings to its secondary markets. Affordable vacation packages for families. Weaknesses The vast majority of the company’s sales come from travel agents who arrange cruises on behalf of clients. Given the emergence of internet-based travel bookings and direct to consumer models of selling airline tickets, their business in general has declined. Because the company depends on a broad base of going-concern travel agents, any prolonged slump or major consolidation in the travel agency business could adversely impact the company. The costa Concordia and costa allegra has suffered some recent accidents tarnishing the reputation of carnival corporation and the cruise industry as a whole. These incidents happened due to poor safety records and lack in problem solving. They also suffered some low-profile problems such as viral outbreak and losing a person at sea which generated some bad publicity. Many people believe that these types of cruises are very expensive Opportunities The cruise industry has grown considerably in the past 10 years but still occupies a very small proportion of the global vacation market. The revenue for cruises has declined in the US, it is growing in Europe and Asia, leading to more opportunities for Carnival to expand in these regions. 6
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Customers in Asia and China are now looking for luxurious cruises as a vacation option. So new location routes can be created to expand the market. Carnival can take advantage of the economies of scale and offer them the best prices and packages. Brand loyalty and loyalty to cruising are extremely high and should be utilized to get a large number of repeat customers. Advertising through different platforms should be introduced to expand their media presence and attract customers of all age groups. They can adopt new strategies or slightly change the current ones in response to the market feedback. And can look into acquisition of other star cruise lines to expand their business. Threats Carnival has been taking advantage of special tax loopholes to avoid paying US corporation taxes. Carnival is considered a Controlled Foreign Corporation (CFC), which exempts shipping operations of a corporation from income tax. In 2009 the US government decided to look at closing those loopholes. If these loopholes are closed, it could affect their financial statements and fiscal bottom line in the future.
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