Carnival cruise
Carnival cruise is among the largest cruise ship operators in the world due to its fleet of more than 100 ships worldwide (Carnival, 2020). The company’s headquarters are located in Florida, USA. The cruise ship industry has grown significantly, with reports indicating that it is projected to exceed USD13 billion in revenue serving more than 30 million customers in 2025 (Grandview Research, 2022). A strategic review entails evaluating key aspects of the organizations to show their importance, review what is working and what is not, and propose recommendations in areas that need improvements. This paper will describe the organization, evaluate its mission statement, innovation within the company, corporate culture, globalization, and competitive environment.
Mission Statement
Carnival cruise’s mission statement is ‘to provide the ultimate cruise vacation experience for our guests exceeding their expectations in every way (Carnival, 2020). This mission statement is very important for this organization’s success since it communicates its purpose, that is, to provide customers with a quality experience. This helps differentiate the company from its competitors since it is more attractive in the eyes of the consumers. This mission statement is a vital tool in marketing since it also communicates the company’s goals. This is important since it can play a part in influencing the behaviors of external partners as it motivates them to join the company if this goal aligns with their own. This argument is supported by Alegre et al. (2018), who argue that a good mission statement communicates its unique selling proposition, thus motivating the stakeholders to become enthusiastic about contributing to this common goal. Thus, mission statement is persuasive and can help attract investors and another strategic partner who can help drive the company forward.
In addition, the mission statement can help support the employees by giving them direction on making decisions that can accelerate the company to achieve its mission. For instance, the mission statement directs employees that the best decision for the company is one that helps improve the guests’ satisfaction, thus giving them a pleasant user experience. Alegre et al. (2018) argue that they provide employee behavior standards in their framework of formulating good mission statements. Carnival Cruise’s mission statement by expressing that it standards high-quality customer service. This has significantly increased the performance of the employees since they have developed a purpose. This concern for customers makes the company more successful as it increases its return rate. The company’s customer return rates exceed 30%, among the highest in the industry. Thus, this mission statement has contributed to unifying employees toward achieving its goals.
Description of the Organization
Carnival cruise competes in the cruise business, and its headquarters are in States. The company serves customers from all over the world, not just in states, since it has multiple stopovers and destinations. However, the company mainly operates in North America, Europe, Alaska, South Pacific, and other tourist destinations (Carnival, 2020). The company operates in the leisure travel and tourism industry. The company has many competitors in this industry. The most significant competitors include MSC cruise, the Royal Caribbean, and the Disney cruise line (Grandview Research, 2022). Carnival cruise offers customers services such as food and drinks, accommodation, and leisure activities on its modern cruise as they travel across the seas to various destinations. The company’s goal is to provide customers with the best travel experience at the bests destinations and considerable (Carnival, 2020). This way, the company aims to give customers value for their money. Thus, the company offers high-quality services and a positive customer experience to differentiate it from its competitors.
Innovation
Technological innovations have significantly improved the leisure and travel industry. Carnival cruise line promotes an innovative culture to help remain ahead of the competition. Innovations, especially in technology, can significantly improve the organization in multiple ways (Lin et al., 2022). First, technological innovation can significantly improve the quality of user experience (Morley et al., 2020). Technologies such as big data analytics and artificial intelligence can help the company provide a personalized user experience, which will help the company sustain value (Papathanassis, 2019). Carnival should invest in these innovative technologies to collect data to offer its cruise passengers exactly what they want and need. Artificial intelligence and other analytical technologies facilitate this by identifying unique patterns in customer behaviors, allowing the company to appropriately change the services and products offered on cruises to suit these unique (Morley et al., 2020). For example, these technologies can produce models that can learn from most customers’ designs, the type of food and drinks customers want, and even the most popular decisions. From such insight, the company can make strategic decisions that reflect this need, thus giving customers a personalized experience and delivering their needs (Woo & Kang, 2021). This way, technological innovation will allow the company to sustain its value by allowing it to increase the quality of user experience.
Adopting technological innovations will also increase the convenience and efficiency of service in the company. Technological innovations will make it easier and more convenient for customers to access services (Papathanassis, 2019). For instance, the development of the internet is making it easier for customers to book cruises and has minimized the hustle of travel for customers. In addition, the business and the customers can easily communicate, making it easier for them to solve any existing issues in minimal time (Papathanassis, 2019). This approach saves time and money for customers who become satisfied due to a positive experience. Innovating in technologies can also increase the luxury of the cruise. For instance, the company is innovating the internet of things to help make consumers more comfortable using smart devices in their cabins (Morley et al., 2020). Suppose successful such technologies can allow the customer to control their cabin temperatures, lighting, and even entertainment digitally. This will make the user experience very interactive and guarantee their satisfaction.
In addition, investing in innovations will help the company manage risks and achieve sustainability. Using technologies such as artifice intelligence will make it easy for the company to predict the demand levels and the number of resources needed throughout the cruise (Grayson & Hodges, 2017). Using computer systems, it will be possible for the company to plan on the resources it will need to help minimize wastage (Carnival, 2020). They will also help reduce risks as the company will not overpay for more resources than it needs (Rodriguez-Fernandez, 2016). This way, these technologies help minimize the company’s waste, making them more environmentally sustainable.
Strategic leadership
Leadership at Carnival cruise plays an important role in determining the performance and success of the company. The company’s organizational culture advocates for instilling of transformational leaders. This leadership style has positively impacted this company due to the benefits it offers. First, transformational leadership has helped the company innovate (Ciulla,2020). Leaders at the Carnival are often very hands-on and take an active approach to solve problems. They also encourage employees to take ownership of their jobs by ensuring they understand them well enough to do them effectively. Transformational leaders can see things from other perspectives and can make connections between seemingly unrelated concepts or ideas (Ciulla,2020). Leaders inspire others with their vision and mission for the company, which makes it easier for the team to perform better (Ciulla,2020). Thus, leadership has significantly increased the motivation and commitment of employees by making them more committed at work, and their high performance has made the company grow to such a size.
In addition, the leadership at the company has helped it change and adapt to different challenges. The Covid-19 pandemic has made it difficult for companies in the cruise industry to maintain regular operations (Carnival, 2020). However, transformational leaders at Carnival made it much easier for the company to adapt to change by implementing new systems and coaching employees on how to deal with such challenges. Leaders at Carnival have improved their team’s quality of service by promoting the employees’ training and development. The leaders continuously advocate for the employees’ professional development to ensure their quality of work (Ciulla,2020). This professional development has made employees more motivated at work as they have an opportunity to improve their careers. As a result, retention is high, as employee turnover rates are relatively low (Ciulla,2020). Strategic decision-making within the company has improved since the leaders consider insight from customers, employees, and other relevant stakeholders before making vital decisions. This proves that leadership has contributed to the success of the Carnival cruise line.
Corporate culture
Gorton et al. (2022) define corporate culture as the environment in its workplace. Corporate culture is crucial in determining the performance of the employees and their general commitment to achieving the company’s vision. Carnival has developed a humanistic corporate culture (Gorton et al., 2022). This is because the company has created a healthy working environment where workers are treated as human beings, not as resources. The company ensures that employees are not overworked and are not exploited. This culture ensures that employees feel safe and are more inclined to remain working, resulting in high retention rates. Experienced and talented employees are retained, giving Carnival cruise a competitive advantage as it is more productive (Urinov,2020). In addition, Carnival’s corporate culture is supportive and inclusive. The company promotes inclusivity and equality and employs people of all ages, cultures, sex, and other ethnic backgrounds. This inclusive culture increases diversity and introduces unique insights, alternative thinking, and creativity (Urinov,2020). These aspects are the basis for innovation within the company. Innovation gives the company a competitive advantage as its corporate promotes environment promotes the generation of new ideas that can help improve user experiences and solve problems to help it stay ahead of its competitors (Gorton et al., 2022).
In addition, the firm’s humanistic corporate culture creates an environment where workers can unlock their full potential. At Carnival cruise, the company promotes communication and teamwork (Gorton et al., 2022). Employees are encouraged to work together and communicate freely. The teams are also encouraged to value each member’s opinion, which helps unlock their potential. Teamwork and efficient communication have increased work efficiency within the company resulting in increased production. This approach has helped the company stay ahead of competitors due to its managing workload effectively. The company also saves on time and costs, and the outcome is faster and more efficient customer service. Moreover, the corporate culture at Carnival cruise gives the employee an opportunity to grow professionally (Carnival, 2020). Leaders in the company are encouraged to give performance reviews and advise employees on possible areas of improving their performance. This culture increases the motivation and satisfaction of employees resulting in high-quality service for customers. This outcome boosts its brand reputation giving it a competitive advantage.
Globalization
Globalization plays a vital role in the organization of Carnival organizational structure. Carnival cruise had to open multiple global branches so as to expand into new markets. The company operates in more than 100 countries (Carnival, 2020). This expansion has increased the diversity of teams and the complexity of managing the workforce. This has forced the company to adopt different organizational structures depending on the norms and working of different cultures. Globalization has also increased the interconnectedness of the company and its foreign partners (Lin et al., 2022). As a result, the company has adopted a corporate matrix structure to manage all these divisions. Matrix organizational structures are used since it decentralizes decision-making, thus allowing each division to formulate and implement strategies that suit their local needs. This corporate structure has also allowed global divisions to operate with better autonomy and interactions.
Globalization has a positive impact on the company. First, the company has had access to a large pool of customers resulting in increased production. The company’s fleet of 100 cruises allows it t operate in more than 100 countries, and this has resulted in a steady increase in revenue. The company recorded revenues exceeding 1.5 billion in the 2021 fiscal year (Carnival, 2020). In addition, globalization has provided the company with additional resources, technologies, and labor that it would otherwise not have access. For example, Carnival Cruise has employed more than 40000 employees employed from different countries (Carnival, 2020). Globalization has benefited Carnival by helping diversify its risks. Disasters and other uncertainty can cause some markets to become inaccessible, which can significantly reduce revenue (Lin et al., 2022). This would hurt the company if one destination was the only source of revenue. By diversifying, the company is effectively managing such risks.
Competitive environment
Carnival operates in a competitive environment with direct and indirect competitors. Its direct competitors include Star Cruises and the Disney Cruise Line. Its indirect competitors include hotels, airlines, and tour companies. To understand the competitive environment, this paper will use Porter’s forces of competitor analysis. This framework will be helpful in describing the competitive environment and can identify what the company needs to do to achieve a competitive advantage.
Threats of new entrants
The threat of new entrants into the cruise industry is low due to the large capital requirements required. Starting a cruise is very difficult since cruises are very expensive to buy (Peručić, 2020). The service has less differentiation since competitors also offer the same product and services as Carnival making the threat of new entrants moderate. Thus, Carnival cruise has to implement strategies to overcome these threats by providing value, lowering costs, and reducing prices. For instance, the company can innovate new services and products to make the company appear attractive to consumers. Carnival cruise can also utilize its economics of scale to reduce the costs of its operation, which will give it a competitive advantage as competitors will find it difficult to match its prices.
Bargaining Power of Suppliers
The bargaining power of suppliers is relatively low. This is because there are many suppliers distributing the same products. Product differentiation is also low, meaning that the company can easily source from different suppliers without a significant drop in quality. Carnival can handle the bargaining power of suppliers by sourcing from multiple suppliers to give its more control over them. The company can also use its economics of scale to negotiate lower prices.
Bargaining power of Buyers
The bargaining power of buyers is very high. This is because there are many other competitors offering the same products. The switching costs of customers are also relatively low. As a result, the users can put pressure on Carnival cruise to switch to lower their prices (Lin et al., 2022). These issues can be resolved by providing customers value for the customers. Carnival can also focus on innovating new products and services to maintain its customers.
The threat of substitute products and services
The threats of substitute products and services are very high. Customers can easily choose to choose other forms of luxury other than cruises. For example, they can choose to fly to new destinations and stay in their hotels (Lin et al., 2022). The switching cost to these alternatives is low. Carnival can maintain its competitive environment by providing customers with a unique customer experience, which will prevent them from switching to these alternatives.
Competitive rivalry
The competitive rivalry between Carnival and its competitors is relatively high. These firms offer the same products and services with little differentiation. The switching cost is very low due to many competitors. These competitors eat into Carnival’s market share (Papathanassis, 2019). However, Carnival can overcome this competition by differentiating itself. It can achieve this by providing high-quality products and services. It can also utilize its economies of scale to lower its costs. This outcome will help the company attain a competitive advantage over its competitors.
Conclusion
This paper has aimed to analyze different aspects of Carnival cruise line’s business to understand its strategic management. Its mission statement communicates its purpose, which is to provide high-quality customer service. It also acts as a guiding tool for employees and supporting stakeholders. This analysis also concludes that the company should innovate in technologies such as artificial intelligence to keep it ahead of competitors. Carnival cruise has a supportive organizational culture that benefits its team. Transformational leaders in the company help it grow and become more productive. Its supportive corporate culture increases retention rates resulting in higher productivity. The company operates in a competitive environment and has to use its economic of scale and focus on high quality to differentiate itself from competitors.
References
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