Title Strategy Management Case Study - Carnival Corporation: Acquiring Princess Cruise Line (2002)

Table of Contents.

Q1. How would you describe the present performance of the Corporation? .........................3

Q2. (a) What is the difference between mission and objectives of a company? .....................4

Mission

Objectives

(b) Identfy the mission of the Corporation.......................................................................................5

(c) What are the current objectives of the Corporation that you can gather from the case ?..........5

Financial Performance

Objectives

Q3.Descibe the present corporate and business strategies employed by the Corporation? ...6

Top Management

Board of Director

Corporate Structure

Corporate Resource

Operations and Logistics

Human Resource

Pricing

Q4.Perform an industry analysis on the Corpoaration by using Porter’s 5 forces. Descibe

the threats faced by the Corporation by using the analysis, and determine the level of each

threat whether it is high, medium or low. The analysis should be in the folowing

order.................9

Threats of new entrants

Rivalry among competitors

Threats of substitutes

Bargaining power of suppliers

Bargaining power of buyes

Bargaining power of other stakeholders

Q5. Perform SWOT analysis on the Corporation and briefly describe the major strength, weakness,

opportunities and threats………………………………………………………………………………………..14

Strengths

Weaknesses

Opportunities

Threats

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Q6. From your SWOT analysis identify two viable strategies and choose only one strategy that should

be carried out by the Corporation. Gives reasons as to why the Corporation should implement the

chosen

strategy……………………………………………………………………………………………………………16

Viable strategies

Recommended strategy

Q1. How would you describe the present performance of the Corporation?

Carnival Corporation is in the enviable position of being the largest, most profitable, and most popular cruise line in the world. Carnival Corporation owns Carnival Cruise Lines, Holland America Line, Costa Cruises, Cunard Line, Seabourn Cruise Line, and Windstar Cruises. The company's cruise lines operate 45 ships that travel to a wide variety of exciting destinations around the world.

With a commitment to leadership, innovation, value, and quality, Carnival offers cruise vacations that appeal to a wide variety of lifestyles and budgets, and sail to some of the world's most exciting destinations. Through acquisitions and alliances, Carnival has built up an impressive fleet of ships that sail the world, as well as interests in hotel operations.

Present performance of Carnival Corporation base on the case study given in class earlier can be described in terms of corporate finance performance (profitability), market share, ship capacity, advertising and marketing expenditures.

Finance performance:In the consolidated financial statements for Carnival Cruise Lines, Inc., corporate revenues for fiscal 2001 rose to $4.54 billion, compared to $3.78 billion in 2000 with net income from operations of $926 million.

In light of the enormous challenges that Carnival faced in 2001, Carnival maintaining the reputation to be the most profitable company in the leisure travel business. The ability to post these achievements is the direct result of prompt actions taken at crucial moments during the year by the management teams and employees.

Market share:In 2002, Carnival market share of the cruise travel industry was approximately 32% overall. The combination of Princess Cruise’ market share of 11.9% with Carnival’s 31.9% would create a dominant organization in the cruise segment of leisure travel industry.

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Steadiness and consistency are Carnival hallmarks, and despite the turbulent times faced in 2001, Carnival Corporation executive management team continually strove to maintain Carnival's reputation as the industry's leader and innovator. They had assembled one of the newest fleets catering to cruisers, with the introduction of several “super liners” built specifically for the Caribbean and Alaskan cruise markets. Management also planned to invest over $6 billion in new ships by 2005 to be distributed among various cruise brands under the corporate umbrella.

Carnival management and Board of Directors believed that the demand would continue to increase well into the future considering that only a small percentage of the North America market had taken a cruise vacation, reaching more of the North American target market would improve industry profitability.

Ship capacity:At the end of fiscal 2001, Carnival operated 16 ships (excluding the Tropicale, which was transferred to Costa), with a total berth capacity of over 33,154.

The Boston Consulting Group, in a 1989 study, estimated that only 5% of persons in the North American target market had taken a cruise for leisure proposes and estimated that market potential to be in excess of $50 billion.

Carnival Corporation’s management believed that this percentage had increased to 12% to 15% by 2002. Various cruise operators, including Carnival Corporation, had based their expansion and capital spending programs on the possibility of capturing part of the 85%-88% of the North American population who had yet to take a cruise vacation.

Advertising and marketing expenditures:

Carnival always placed a high priority on marketing in an attempt to promote cruises as an alternative to land-based vacations. Carnival was the fisrt cruise line to succesfully break away from traditional print media and use television to reach a broader market. Even though other lines have followed Carnival’s lead in selecting promotioanl media and were close to Carnival in total advertising expenditure, the organizations still led all cruise competitors in advertisong and marketing expenditures.

Q2. (a) What is the difference between mission and objectives of a company?

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Mission

A mission helps an organization to define its present nature of business as well as what it should do in the future. A mission, which is developed based on the organization’s vision, is required to assist management of organization in answering the following two fundamental questions; what is our business? And what will our business be?

In other words, a mission is a brief written statement of the purpose of a company or organization. Ideally, a mission statement guides the actions of the organization, spells out its overall goal, provides a sense of direction, and guides decision making for all levels of management.

Objectives

Objectives are the specific steps you and your company need to take in order to reach each of the goals. They specify precisely what must be done — and when. Think of it this way: Goals tell you where you want to go; objectives tell you exactly how to get there. Goals can increase your effectiveness; objectives back your goals and make you more efficient. Goals are typically described in words; objectives often have numbers and specific dates attached to them. These need to be 'SMART' goals, i.e. Specific, Measurable, Accountable, Realistic and Time. What is it that you are trying to achieve through your processes?

The difference between goals and objectives is simply that a goal is the level of achievement you must attain to reach your mission, and objectives are the specific measurable actions that act as stepping-stones to that goal.  When all your goals are achieved, your mission must logically succeed.  That is why the objectives that underpin them must be measurable and focused.  Otherwise, you have no way to know what went wrong if you fail.

While the Mission Statement conveys how your community conducts its business, the goals state which accomplishment must take place to move the community toward its vision.  Goals must align with the vision.  They show you understand the community operation, know your resource requirements and limitations have the ability to marshal those resources, and are thorough and focused.

Q2. (b)Identify the mission of the Corporation.

Carnival Corporation wanted to deliver exceptional vacation experiences through the world's best-known cruise brands that cater to a variety of different lifestyles and budgets, all at an outstanding value unrivaled on land or at sea.

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Q2. (c)What are the current objectives of the Corporation that you can gather from the case?

Carnival's objective is to remain #1 in the volatile travel and vacation industries by promoting cruises as an alternative to land-based vacations. Increasing berth capacity has been met with slower growth in demand so innovative means are necessary to fill cabins without resorting to "price wars", which would adversely affect all of the cruise lines.

To do this, Carnival strives to remain a leader and innovator in the cruise industry and do so with sophisticated promotional efforts and by gaining loyalty from former cruisers, by refurbishing ships, varying activities and ports of call, and being innovative in all aspects of ship operations.

The objectives of Carnival Corporation that can be gather from the case are as follows:

* Remain a leader and innovator in the cruise industry.

* Maintain the commitment to participate in all segments of the cruise industry.

* Offer the best value in the entire vacation marketplace.

* Use various multimedia promotional efforts to attract first-time cruisers.

* Earn loyalty from former cruise customers to promote repeat business.

* Increase existing fleet and acquire other cruise/vacation companies to sustain growth over the competition.

* Seek "fresh and exciting" enhancements such as new or refurbished ships, new ports of call, new shipboard activities, etc.

* Capture the portion of the North American market that has never been on a cruise.

* Continue to grow European presence.

* Increase profit margins.

Q3.Descibe the present corporate and business strategies employed by the Corporation.

Carnival Corporation is an organization that strives to treat the customer with the utmost respect, thereby promoting an enjoyable vacation. Carnival Corporation also prides itself in environmental awareness, understanding the importance of a clean and

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safe environment both on and off the cruise ship.

Carnival's commitment to leadership is demonstrated by the number of "firsts" in the industry:

* First cruise line to carry over one million passengers in a single year.

* First cruise line to carry over five million passengers by fiscal 1994.

* First modern cruise operator to use multimedia advertising promotions.

* First cruise operator to use television for marketing to reach a broader market.

* Established the theme of "Fun Ship" cruises, primarily promoting the ship as the destination and ports of call as secondary.

Carnival Corporation follows a differentiation strategy because they offer a wide variety of cruise options to accommodate many different types of people. Carnival positions its products from its belief that the cruise market actualy comprises three primary segments with different passenger demographics, passenger characteristics, and growth requirements.

* Contemporary -- served by Carnival ships for cruises that are seven days or shorter and feature a casual ambience.

* Premium -- served by Holland America and Costa ships for cruises that are seven days and longer and appeal to more affluent consumers.

* Luxury -- served by Seabourn, Cunard, and Windstar ships for more experienced cruisers with sailings of seven days and longer.

To maintain long-term profitability, Carnival Corporation must maintain at full capacity. In order to remain the leader and innovator in the cruise industry, Carnival uses a variety of strategies. One strategy is acquiring new cruise lines and building new ships. Another effective strategy is the high quality of the service. This results in customer satisfaction, which leads to new and repeat customers. Another strategy is the economies of scale. Carnival is trying to increase the size of the company so that they can have the lowest break-even point in the industry.

Top Management

The management of Carnival Corporation is very strong. The leaders have been responsible for many firsts in the industry. The management team in place has been in place for several years. When the Corporation merges or buys out other companies, they often keep on the key players from the new acquisition. The Chief Executive Officer and Chairman of the Board of the Carnival Corporation is Micky Arison, whose father founded the corporation.

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Board of Directors

Board of Directors is comprised of fourteen members. The members hold various jobs, such as ambassadors and executives of financial groups. The company has a stable mix of inside and outside directors.

Corporate Structure

Carnival has a divisional structure. It is made up of two cruise divisions and a chain of Alaskan hotels and tour coaches. The current corporate structure is based on a profit center concept. The goal of the company is to make a profit. Carnival is now building super liners. These very large ships not only hold more people, but also house more activities and entertainment. The company is catering to many diverse populations. They are doing this by offering a large range of cruises, from 3 days to many weeks, on ships for the middle class to the very wealthy.

Corporate Resources

MarketingCarnival places a high priority on marketing. The ships have a “Fun Ship” theme that is promoted through television and print advertising. Carnival wants to think of the boat as the destination, and the ports as secondary. The marketing strategies are consistent with the company’s objectives of bringing in new customers and bringing back repeat customers. The marketing managers are including more varied activities that are marketed towards different lifestyles. This attracts more people who would not have considered a cruise in the past.

Carnival has a strong marketing mix. They are trying to make their product unique by using the “Fun Ship” theme. They also offer many promotions that lower the cost of their cruise. The company also offers a large selection of cruise options, with ports located in many countries around the world.

Operations and Logistics

Carnival’s operational experience in the industry allows them to have the lowest break-even point in the industry. As a result of this, the company shows a higher profit margin when compared with its competitors.

Human Resources Carnival employees stay with the company on an average of eight years. This shows that the company has a low turnover rate. Human Resources effectively hire qualified employees who remain loyal to the company. They also report that applications for all positions greatly exceed the need.

Pricing

Comparable price versus land-based vacation package, Carnival’s all-inclusive package compared to theme park or resorts, often was priced lower these destinations,

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especially considering the array of activities, entertainment, and meals. Most vacations would be hard pressed to match Carnival’s per diem prices, which ranged from $125 to $300 per person per day, depending on accommodations.

Q4. Perform an industry analysis on the Corporation by using Porter’s 5 forces. Describe the threats faced by the Corporation by using the analysis, and determine the level of each threat whether it is high, medium or low. The analysis should be in the following order:

 

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a) Threats of new entrants

a) Potential new entrants. Any inability to fend off newer, more nimble, and unconventional competitive brands could torpedo Carnival's growth. The industry's outstanding success over the years has attracted new entrants. One recent start-up, Disney Cruise Line, has positioned itself exactly where Carnival was at its inception: as the low-cost provider. While Disney Cruise Line is operating mainly in the Mediterranean Sea, there is the real possibility that Disney Cruise Line become a force to reckon with in the North American market.

Regardless of where it operates, each new entry into the cruise industry has some impact on Carnival's position. That said, however, the ability of a company to enter the market and make a sizable dent in Carnival's sales is limited. To begin with, the cost of new-ship construction has risen dramatically, as explains in the accompanying case with the competition between Carnival and Royal Caribbean International (RCI) for largest-ship bragging rights. Second, Carnival has a tremendous advantage in size that generates economies of scale. These economies allow Carnival to profit in the present market while being the low-price leader. Third, Carnival has the advantage of being further advanced on the learning curve.

The current corporate structure is based on a profit center concept. The management is very cost conscious on both fix and variable cost for the maintenance of healthy profit margin. Comparable price versus land-based vacation package, Carnival’s all-inclusive package compared to theme park or resorts, often was priced lower these destinations, especially considering the array of activities, entertainment, and meals. Most vacations would be hard pressed to match Carnival’s per diem prices, which ranged from $125 to $300 per person per day, depending on accommodations. - Therefore probability of occurrence of threat of new entrance is high but the probable impact on organization at the current stage is low.

b) With array of activities, entertainment and meals with various tour packages to suit the income level of customers and special and discounts allowed for even lower prices, influence of product differentiation is greater. Based on its excellent customer service arrangement throughout the journey of vacation from the beginning until the end, it will mostly add to Carnival’s brand loyalty in customer’s eye. In a market where buyers are satisfied with existing products or services, it is normally difficult to switch those buyers to new products and services offered by a new company.- Therefore probability of occurrence of threat of new entrance is high but the probable impact on Carnival Corporation at the current stage is low.

c) Cruise subsidiary of Carnival had a presence in most of the major cruise segments and provided worldwide operations hence the ability to distribute products to the customers through existing channel of distribution is proven. Penetrating existing channels of distribution or setting up new distribution network from scratch is usually

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difficult for newcomers since cruise industry is already dominated by existing and established companies. - Therefore probability of occurrence of threat of new entrance will be low and the probable impact on Carnival Corporation is low.

d) Carnival Corporation is domineering in cruise industry with nearly 44% of share market and with huge incurred capital investment may deter new companies to enter this market. Highly competitive market that requires large investment in technology, research and development, and physical plant can discourage entry into the market.- Therefore probability of occurrence of threat of new entrance is low and the probable impact on organization at the current stage is low as well.

Summary: Probable occurrence of threat of new entrance is medium, but probable impact on organization is low.

b) Rivalry among competitors

As the dominant player in the entry-level cruise business, Carnival Cruise Lines string of successful and profitable years encouraged copycat competitors, even as the cruise industry consolidated. Since Carnival's founding, the cruise industry has become fiercely competitive due to increased capacity, price discounting, and a "sea of sameness" where all the cruise brands are beginning to look and sound alike. It can be concluded that Carnival now faces the challenge of deciding how best to burnish its brand to succeed in the future.

Land based vacations are a big threat to Carnival. Many vacationers do not think of cruises when planning trips. At this time cruises are only 7% of the North American vacation market. Burden of carrying high fixed cost related to market operation in cruise industry can increase price competition among existing firms in the market. Continuous cost reduction is essential in cruise industry to remain competitive and to lead the industry. Stored or incurred large investment by existing firms in cruise industry result to hurdles or difficulty to exit the market along with the high risk attached.

Summary: Probable occurrence of rivalry among competitors in cruise industry is high and the probable impact on Carnival Corporation is high as well.

c) Threats of substitutes

Substitute products. Many hospitality products are potential substitutes for a cruise, including hotels, destination resorts, all-inclusive resorts, timeshares, rental homes, air travel, trains, and casinos. Though none of these products alone supplies the identical

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experience, several can be combined to provide a package with features similar to a cruise. Another set of substitute products that are not hospitality-related also compete for the customer's disposable dollar, such as cars, furs, and jewels. Indeed, Carnival's marketing department has determined that the primary purchase decision is whether money will be spent on cruising or on luxury items. These substitutes represent real threats to the future of cruising.

Substitute products constitute a strong challenge to the cruise industry due to the perceptions surrounding cruises. First, the perceived high cost of cruising makes other travel options seem more reasonably priced, even though the expense of a land-based vacation is comparable to the price of a cruise when all costs are considered. Second, the perceived cost of a cruise creates a barrier related to switching costs. Given that an extended vacation may be a once-a-year-option, customers want to get the best value. Other products on the market appear to be less risky, whether they are land-based vacations or luxury purchases.

Summary: Probable occurrence of threat of substitute in cruise industry is high and the probable impact on Carnival Corporation is high as well.

d) Bargaining power of suppliers

Suppliers of key inputs. The supply input that is paramount to cruise lines is air transportation. A reduction in airline seats to major ports, whether by marketing decision, strike, or other interruption of service, can damage the cruise industry. Additionally, airfare increases can limit the potential pool of customers. Although cruise packages may include airfare, the recent rise in fuel prices will put pressure on the economics of the cruise business. The customer or buyer has unlimited choice versus what is being offered by cruise industry on the whole. Carnival has to add more business activities to complement their cruise packages in order to strengthen their bargaining power.

Summary: Probable occurrence of bargaining power of suppliers in cruise industry is high and the probable impact on Carnival Corporation is high as well.

e) Bargaining power of buyers

Buyers. The primary purchaser of cruises has traditionally been travel agents, who are Carnival's primary distribution channel. Although travel agents are important to Carnival, their influence has so far been manifested in whether they recommend a Carnival cruise, another cruise line, or another type of vacation altogether. As the primary brand representatives for Carnival, any weakening of the brand risks confusion in the marketplace. Moreover, if travel agents banded together, they could force a cruise line to reduce margins and pay greater commissions. Indeed, some

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organization of travel agents has occurred which increases their bargaining power.

Direct purchase by passengers has become a growing source of sales. Due to the transparency offered by the Internet, passengers have become more educated on cruise offerings and can shop for attractive prices. At the moment, end users have some market power, but not yet enough to have a noticeable effect on the industry. While the power of direct purchasers is currently limited (because they are small in number and fragmented), there is the real possibility that a stronger buyer group could depress prices and diminish Carnival's stellar profitability record.

Summary: Probable occurrence of bargaining power of buyer in cruise industry is high and the probable impact on Carnival Corporation is high as well.

f) Bargaining power of other stakeholders

Carnival Corporation is the larger of the two holding companies and is incorporated in Panama. Carnival has captured 43.8% of cruise industry market share and it is the dominant player in the industry. While the remainder 56.2% remains fragmented share of other cruise liners. Hence to topple Carnival, the remainder cruise liners have to collide to take the lead in cruise industry. With competition intensifying, industry observers believed the wave of failures, mergers, buyouts and strategic alliances would increase.

Summary: Probable occurrence of bargaining power of other stakeholders in cruise industry is high and the probable impact on Carnival Corporation is medium.

 PROBALE IMPACT ON ORGANIZATION

HIGH MEDIUM LOW PRIORITY

PR

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AB

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F

OC

CU

RA

NC

E

HIGH Bargaining

power of buyer

Bargaining power

of other

stakeholders

 

Bargaining

power of

supplier

Threat of

substitues

Rivalry among

competitors

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MEDIU

M   

Threats of new

entrants

LOW      

Q5.Perform SWOT analysis on the Corporation and briefly describe the major strength, weakness, opportunities and threats.

SWOT Analysis

Strenghts

1. Carnival is known for Carnival Destiny, the largest cruise ship in the world. The square tonnage is 101,353, which is over 30,000 more than any other ship in Carnival’s fleet. It can hold up to 2,642 passengers with double occupancy.

2. The "Fun Oriented" Philosophy is there to keep everyone involved. There are various activities to keep young and old alike entertained. The ship has been designed to cater to everyone’s interests.

3. Not everyone wants to dress up to go to dinner on a cruise. The non-formal dress setting keeps the atmosphere light and happy. People do not feel the need to be embarrassed, and Carnival has gotten great response to it.

4. Who wants to be on a cruise and sit in their room all day? Carnival ships are fully equipped to handle the entertainment of all the passengers. With casinos, shopping centers, weight and exercise rooms, activities, bars, lounges, ballrooms, etc. there is more than one way to tickle your fancy.

5. The advertising team for Carnival is doing its job well for it leads it competitors in advertising and promotion. The Carnival Cruise Line is a common name because of

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such advertising and promotion efforts.

6. The company has more cruise lines and travels to more destinations than any other cruise line.

7. Carnival is a very affordable cruise line.

Weakness

1. Carnival has not fully tapped into the market.

2. The cruise line is only discounted during the off season. This discourages people to use Carnival during the busy season because they can not get a reduced rate.

3. The fact that Carnival is usually at a 100% capacity isn't always good news. There is always the risk of overcrowding or overbooking. If this should happen, Carnival may need to refund money because of unhappy customers.

4. There are only so many ports that Carnival can go to and there are none that other cruises have not traveled to. The ships all have a specific route that they follow, and some people do not want that specific route. They want to be able to hit several different ports that may not be offered by one cruise. Unfortunately, port choice is limited.

Opportunities

1. Most people want to get away for awhile. They want a unique vacation that they will remember forever. Instead of having the hassle of trying to drive across the country to spend a couple of days somewhere, they can take a week off and not have to worry about anything. Carnival takes care of all their travel worries including airfare, hotel, food, and entertainment accommodations. For the accommodations that Carnival can't provide, a partnership can be formed with complimentary companies.

2. The pricing of the Carnival Cruise Line is very moderate compared to other Cruises. It ranges from $75 to $100 a day, where the competitors range from $75 to over $1000 a day! Because of this difference, Carnival has the room to slightly raise prices in exchange for more services.

3. It is truly a company that can take care of all of a traveler’s needs. Carnival Corporation owns five cruises, a chain of hotels, an airline, and a bus line. Travelers can be flown from where they live, have a bus deliver them to the cruise, and be able stay in a hotel all through Carnival. But there are still markets that can be penetrated by the company. Car rental is any example. Even non-related markets are good ideas.

4. Ever since the popularity of the movie "Titanic", people have gone wild wanting to take a Trans-Atlantic Cruise. If Carnival can cash in on this, they could make a good profit and provide more port options.

5. The idea behind Carnival is the "Fun Ship" philosophy. They want people of all ages to enjoy their cruise. They have everything from Nautilus workout rooms, to

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indoor and outdoor pools, casinos, shopping centers, exciting ports of call, etc. From the youngest child to the oldest person, there is something for everyone on Carnival Cruise Lines. If marketing these facts to the percent of people who do not travel on Cruise ships does not work, Carnival has the ability to survey this untapped market though business deals with various statistical companies. This way, they can find out what they want from a cruise vacation and provide it for them.

6. Carnival can add more ships to "shadow" certain routes to prevent overcrowding or overbooking of overly popular cruise lines.

Threats

1. There are various competitors in the market of cruise lines. With so many to choose from, it is not always easy to be able to decide what is best for the dollar.

2. There are so many other vacation spots that require less planning. For example people could go to the beach, take a bus tour across the country, go to Disney World, etc. People usually regard cruises for the rich, or for those people who do not want to take the time to plan their vacation out.

3. There is only a limited target audience that Carnival can reach due to its cost. For $75 a day and higher, there is only a certain portion of the population that would consider a cruise.

4. When serious mishaps occur, it could spell disaster for a cruise line. It has yet to be determined the extent the fire aboard "Ecstasy" has had on business.

Q6. From your SWOT analysis identify two viable strategies and choose only one strategy that should be carried out by the Corporation. Give reasons as to why the Corporation should implement the chosen strategy.

Viable Strategies and Recommended Strategy.

A. Viable Strategies

1. Differentiation Strategy: Carnival could make their cruises more unique and luxurious then other cruise lines.

a. Pros: The product would draw in vacationers who are looking for a new and unique experience.

b. Cons: Carnival might have to charge a higher price, which could cause more customers going to its competitors.

2. Encirclement Strategy: The Company could use their superior service, reputation, and diversification to take competitor’s clients away.

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a. Pros: Carnival would gain a larger market share of the vacation industry.

b. Cons: Competitors might reduce costs, which would cause Carnival to have to reduce prices. This would cause a lower profit margin for the company.

3. Growth with Concentric Diversification: The Company could expand into the airplane, hotel, or theme park industry.

a. Pros: This would help them enter new markets and therefore, raise their profit potential. b. Cons: There could be existing competition in those markets.

4. Market Development Strategy: Only 5-7% of North American population takes cruises each year.

a. Pros: Increase Company’s share of existing market.

b. Cons: This plan would need considerable finances up front.

B. Recommended Strategy

I recommend the Encirclement strategy, so that Carnival can capture a larger share of the cruise line industry. Carnival should continue to build new and larger ships. They should also try to increase ports of calls and enter other markets. They need to offer more of a selection then their competitors. The company should maintain high quality service expected by customers.

Implementation

Top management should continue to merge with other companies and build new and larger ships. They should increase their efforts to expand into other ports, particularly the Asian market. The company should increase their marketing campaign. They should focus on the different price ranges available, the many ports-of-call, and the high quality superior service that is found on every Carnival cruises. They need to develop a budget more concentrated on marketing and improvement of services. This will make their product seem unique.

Evaluation and Control

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A system should be developed to measure how quickly and satisfactorily customer needs are being met. The system should also look at how the services can be expanded and improved. Carnival must be sure that all the companies they merge with or purchase, share the same vision of customer satisfaction and service. They should evaluate their financial performance and be sure that they are still operating at their high performance level.

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