Growth is an area where Carnival has had continued success. The recent acquisition of Princess, one of the largest purchases in the history of the cruise industry, looks to have great potential in the near future. Acquisitions like Princess can help to meet the needs of the growing European and Asia-Pacific markets and also untapped areas in North America. With such a large control of the market, continued mergers, acquisitions, and alliances can be undertaken while striving to balance the risks with the rewards.
Team Carnival believes this strategy recognizes the opportunity of value-chain partnerships with vendors, suppliers, and the distribution network. At this time, we believe an assessment of best practices, leveraging management resources, and leveraging the value chain partnerships can enhance the operation efficiency of Carnival. From a financial perspective, Carnival should evaluate all operations and eliminate those that do not fit with the short- and long-term business and customer need/desire/satisfaction goals. We recognize that Carnival may have to hold onto services that have low gross margins to achieve the aforementioned goals. However, Carnival's intention should be to support current and future market share and niche growth.
Alternative #2: Concentric Diversification
Carnival could get involved in the airline or motel business through joint ventures or even buying out existing companies. Carnival already owns many hotels and land transportation companies in Alaska and could explore the possibilities of doing the same in other Carnival-destinations. Again, with such a large share of the market, Carnival can afford to experiment and expand their horizons through acquisitions outside the cruise industry that impact the cruise industry. Also, Carnival could seek different types of adventure cruises where the port or destination is a major focus of the trip, not just the cruise ship. For example, making the highlight of the cruise be a diving experience to view a shipwreck. The activities are still available onboard, however fulfilling people�s dreams of an adventure would be the ultimate purpose. Creating different theme-related cruises may draw consumers who dedicate vacations to land-based sightseeing. This would provide the opportunity for consumers to see historical or interesting sites that are inaccessible or inconvenient to reach except by ship.
Carnival should evaluate all decisions based on a critical assessment of environmental and customer analysis for the long- and short-term. The financial team should be closely consulted to assess those options that have the greatest profit potential.
Alternative #3: Pause/Proceed with Caution
With the slowdown of the economy last year, further expansion may be risky. A focus on corporate structure, enhancing plans for the next phase when economy is more supportive for consumer discretionary spending, and improving its current activities, amenities, policies, procedures, and integration will provide stability. A commitment to honing the service of customers to gain new customers and retain existing customers would be prudent.
Carnival should explore niche markets to assure long-term growth. Again, this may risk short-term investments; however, this strategy may significantly pay off in the future. This will require an assessment of customer and trend analysis to predict the success of Carnival�s programs. Long-term profits and market share development will allow Carnival to grow and have leadership in the marketplace.