Strategic management is important to the success and expansion in most businesses. What is Strategic management? It is the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives (slide 1-4, chapter one of The Nature of Strategic management). Why would this information be vital to Carnival Cruise? The annual revenue for just the U.S economy was 37.85 billion dollars and the annual increase for the company is 7.4% (Cruise Ship Industry Statistics). That is a huge profit margin and is vital reason why the cruise industry takes strategic management so seriously. Strategic management also helps companies figure out how to create better and more profitable business strategic plans. This helps Carnival Cruise make tough decisions biased among many decisions.
Let’s start with Strategy formulation. It starts with the company having a vision and mission statement. It also helps identify the strengths, weaknesses, opportunities, and threats (SWOT) (slide 1-8, chapter one of The Nature of Strategic management). Why does a successful company need this? It helps determine what ventures to leave behind or enter. It helps reduce wasting resources and helps improve how companies operate. It also can prevent hostile takeovers and guide paths in international markets or expanded operations to diversify. Strategy implementation also called the action stage going to help Carnival develop annual objectives, policies, motivation tactics, and allocate resources (slide 1-10, chapter one of The Nature of Strategic management). Strategy implementation is very important stage. Only 19.9% of the U.S. population has taken a cruise and of that 19.9% the average age of a passenger is 50+ years old (Cruise Ship Industry Statistics). To maintain a high profit margin a company needs to find ways to save on expanses and entice new customers. It is especially important in today’s economy because many people are saving and not spending on luxury items. Strategy evaluation is how companies can review external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions (slide 1-11, chapter one of The Nature of Strategic management). Carnival Cruise understands this and uses it to gain a competitive advantage. Let’s start with the company’s vision statement. “To consistently provide quality cruise vacations that exceed the expectations of our guests” (Carnival Team). This helps a company figure out what path it wants to take. Many companies view this as the first step in strategic planning (slide 1-16, chapter one of The Nature of Strategic management). Vision statements are underestimated in many businesses. It can help draw the team together and provide a universal goal. Carnival Cruise’s vision statement is short, sweet and direct to all who read it. A mission statement provides identification for many companies and answers the question of, “what does our business portray or do?” Carnival’s mission statement is, “Our mission is to take the world on vacation and deliver exceptional experiences through many of the world’s best-known cruise brands that cater to a variety of different geographic regions and lifestyles, all at an outstanding value unrivaled on land or at sea.” They have one of the better mission statements compared to other competitors. It lets all know who the customers are (everyone in the world are customers), what products are offered (vacations), and what markets (different geographic regions) and technology (best-known cruise brands). It does all this while identifying Carnival’s philosophy and self-concept. The mission statement does not cover survival growth, public image or concern for employees. Leaving these areas out of their mission is hurting the company especially concern for survival and growth. There are many individuals that want to go on a cruise but...
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