Strengths and weaknesses of carnival cruise lines
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Only 19.8 percent of Americans have enjoyed cruises with market penetration relatively below 50 percent. Nearly 50 million Americans have expressed their intention of cruising in the next coming years. The cruise industry has experienced high product diversification and additional value-added services such as new cruise ship designs and new leisure activities that enhance the industry profitability (Applegate, Kwortni and Piccoli 5).
Carnival cruise lines are one of the largest cruise operators and have a well-recognized brand image in the operation of cruises in the niche market both in contemporary and luxury cruises. Carnival cruise lines have more than 12 cruise lines and more than 75 ships that cover adequately serve the four North American market segments. One of the greatest strengths of Carnival cruise lines is the dominant market share due to high scope of operations and large economies of scale. The company has operations in nearly all the major cruise markets worldwide. In addition, the company is currently expanding the cruise ship portfolio by purchasing modern and luxury cruise ships.
The company has made several mergers and acquisitions that are aimed at strengthening the market leadership position and eliminating competition. In 1996, the company acquired Airtours which is one of the largest air-inclusive tour operators and subsequently acquired Costa Cruises in 1997 in order to enter the Italian market (Applegate, Kwortni and Piccoli 7). The company has been able to attain below the industry average costs and above industry average revenue growth rate. The company has rich experience in cruise operations which makes it easier for the company to enter new markets. The company has rich market knowledge and data that is useful in making new strategic choices due to its experienced workforce.