Corporate Growth Strategy

Topics: Strategic management, Strategic planning, Holland America Line Pages: 11 (3662 words) Published: December 3, 2013
Carnival Corporation Growth Strategy
Academic Report on Strategic Management
by Diana Romanova 100878 Strategy & Communication EHM3.SC-02 December 10, 2012
Abstract
The purpose of the report is to discuss the current strategy of the Carnival Corporation, the world leader in the cruise industry. Based on the external and internal situation analysis the new growth strategy is formulated. The recommendations on the strategy implementation and evaluation are provided by terms of the various strategic theories and models. The projected internationalization strategy may result in the improvement of the financial business situation, by increasing the corporation’s profit margins and shareholder value, and non-financial indicators, for example, brand awareness. Moreover the company can adapt the proposed scenario for entering new markets in the future. 2|Page

Table of Contents
Abstract ...................................................................................................................................... 2 Introduction ................................................................................................................................ 4 Situation Analysis ...................................................................................................................... 5 Strategic Direction ..................................................................................................................... 6 Formulating a strategy ............................................................................................................... 8 Strategy implementation ............................................................................................................ 9 Monitoring and evaluating strategic performance ................................................................... 10 Conclusions and recommendations.......................................................................................... 12 Works Cited ............................................................................................................................. 13 3|Page

Introduction
In 1972 Carnival Cruise Lines (CCL) began operations with the single second-hand ship, now it is a multibillion Corporation, owning 10 leading cruise lines, operating 99 ships and over 90 000 employees are serving the company worldwide. Under the Carnival name operate: Princess Cruises, P&O (UK), P&O (Australia), Holland America, Costa, Ibero, AIDA, Gurnard, Seaborn, and the signature brand Carnival Cruise Lines. Carnival Corporation gradually expanded through mergers and acquisition of various cruise brands which are targeting different demographic segments and geographic markets with the concentration in North America, Europe and Australia. In 1987 after achieving its goal and becoming “the World’s most popular Cruise Line”, Carnival declared itself public and offered 20% of the common stock which helped to raise $400 million, the sufficient funds for the further growth. The company entered new markets and started to operate in multiple international locations. In my opinion, well represented in various market segments Carnival eliminated possible attacks from the existing competitors and potential new entrants. As a result of the horizontal growth strategy (Hunger J.D., 2011), according to the GP Wild reports 2010, the corporation owns the biggest market share of 48% in the cruise industry (Vogel M., Papathanassis A., Wolber B., 2012). Nowadays the company continue expanding externally and internally by aiming to deliver 2 to 3 newly built vessels annually. One of the reasons the company succeeded was the choice of the competitive strategy. CCL has followed cost leadership approach; minimising the costs as much as possible in order to keep the competitive advantage (Cunill, 2006). It has been done by:     employment of the international personnel mainly from the developing countries which significantly reduced labour...

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