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Carnival Cruise Lines

Essay by   •  September 23, 2011  •  Essay  •  503 Words (3 Pages)  •  1,253 Views

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EXECUTIVE SUMMARY

Carnival Cruise Lines operates in the leisure travel market of the tourism industry. The barrier to entry is extremely high due to expensive ships, so competitors are easily defined. Despite the leading market share in the cruise industry, Carnival has experienced a slowing growth rate due to economic downturn. Carnival will look to maintain its current customer base, and attract tourists who would typically seek resort locations. Our recommendation for Carnival will boost sales growth and improve the vacation quality for the consumer.

Carnival became successful by using a differentiation strategy, and providing the lowest cost cruises available. Providing more affordable trips to customers seeking a high value vacation has enabled Carnival to attract a larger customer base. Carnival offers countless amenities that provide enjoyable experiences for a multitude of customers. Carnival has positioned itself as the 'fun' cruise line and has rigorously marketed this image. As competitors catch up to Carnival, they will need to implement their next business strategy to promote healthy sales growth. Carnival's profitability ratios are below the industry averages but with improvements in efficiency, and asset turnover they can easily cure these indicators. Carnival is financially strong, but improving these performance indicators will boost their stock price and add to shareholder wealth.

While Carnival Cruise Lines has been vastly successful there still lies one key improvement that they can make to ensure their continued success. Our recommendation for Carnival is to form a strategic alliance with Jet Blue. This move will enable Carnival to remove a barrier to some customers. Customers will be able to purchase their cruise and flight in one convenient portal. Driving to a port city is a major drawback for some customers. With this implementation, not only will Carnival benefit, but so will Jet Blue. Jet Blue is the perfect company to partner with Carnival because they also utilize a low cost strategy.ALSOARE STRATEGY provide aprovide a fun atmosphere Jet Blue will gain new customers while Carnival will be able to book more cruisers. This mutual relationship will help customers try out both companies and form a lasting relationship. One thing you don't want to be bothered with on vacation is a 14 hour drive. This recommendation alleviates that issue and adds value for the customer.

In conclusion, Carnival currently has the leading market share for the cruise line industry. The tourism industry is heavily influenced by economic factors and cruises are no different. Carnival's strategy of differentiation and low-costs havestrategy of differentiation and low-costs has been successful up to this point, but they need to take steps to ensure that they remain the market leader. With a strategic alliance

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