Case Analysis
Carnival Cruise Lines
Focus:
This case is being viewed from the perspective of Mickey Arison, Chairman and CEO, who is reviewing the current situation and planning strategically for the future.
Objective: The objective of this case analysis is to identify strategic recommendations, which Carnival can employ to achieve its vision and mission.
Problem How can Carnival continue to grow by increasing market share and increase profit margins while maintain their brand image.
Current Situation
A. Current Performance Return on Investment (ROI)
ROI has been on steady decline over last five years, down from 8.82% in 2005 to
5.80% in 2009
Market Share
Carnival holds approximately 50% of the worldwide cruising market
As of 2009, Carnival held 55% of the North American market
Profitability
Posted net income of $1.79 billion in 2009, a decrease of roughly 30% from 2008 B. Strategic Posture (implied) 1. Mission To deliver exceptional vacation experiences through the world’s best known cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivalled on the land or sea. 2. Objectives
Corporate level
Overseas expansion into Europe, Australia, and Asia (i.e. increase global market share) Continue average annual capacity growth in North America and Europe at 3% and 9% respectively through 2012
Position the company in a way to take advantage of industry changes by focusing on differentiation
Maintain corporate reputation and brand image
Satisfy shareholders with favorable stock prices
Business level
Brand managers to increase capacity of their respective operating companies
Careful management of selling, general, and administrative expenses to partially offset cost of goods sold
Increase revenues and profits for each respective
Focus:
This case is being viewed from the perspective of Mickey Arison, Chairman and CEO, who is reviewing the current situation and planning strategically for the future.
Objective: The objective of this case analysis is to identify strategic recommendations, which Carnival can employ to achieve its vision and mission.
Problem How can Carnival continue to grow by increasing market share and increase profit margins while maintain their brand image.
Current Situation
A. Current Performance Return on Investment (ROI)
ROI has been on steady decline over last five years, down from 8.82% in 2005 to
5.80% in 2009
Market Share
Carnival holds approximately 50% of the worldwide cruising market
As of 2009, Carnival held 55% of the North American market
Profitability
Posted net income of $1.79 billion in 2009, a decrease of roughly 30% from 2008 B. Strategic Posture (implied) 1. Mission To deliver exceptional vacation experiences through the world’s best known cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivalled on the land or sea. 2. Objectives
Corporate level
Overseas expansion into Europe, Australia, and Asia (i.e. increase global market share) Continue average annual capacity growth in North America and Europe at 3% and 9% respectively through 2012
Position the company in a way to take advantage of industry changes by focusing on differentiation
Maintain corporate reputation and brand image
Satisfy shareholders with favorable stock prices
Business level
Brand managers to increase capacity of their respective operating companies
Careful management of selling, general, and administrative expenses to partially offset cost of goods sold
Increase revenues and profits for each respective