Carnival Corporation

Hilda Teodoro
 1

COMPANY
BACKGROUND
Company Background
l Largest cruise line in the world = 40% market share
l Leader and innovator in the industry
l Cruises to the Bahamas, Canada, the Caribbean, Mexico, New
England, Panama Canal, Alaska and Hawaii
l Achieved several firsts
More than 1 million passengers carried in a single year
First cruise line to carry 5 million passengers (1994)
l Top honchos
Micky Arison, Carnival Corp. CEO & Bob Dickinson, Cruise Lines
President and COO
l A controlled foreign corporation (CFC) since 50% of its stock is
held by foreigners
Enjoys exemption from US federal income taxes (except income
from US sources)
 1

VISION
MISSION
 Carnival Vision Evaluation
To consistently provide quality cruise vacations that exceed the expectations of our
guests. We understand the principle that fun is different for every individual so we offer
a diverse on-board experience that provides guests with a variety of ways to enjoy a
memorable vacation on one of our spectacular floating resorts. To cruise on one of our
vessels is to cross over to a world of endless fun and excitement.

Criteria Evaluation
1. Focused To consistently provide quality cruise vacations that
concept yes exceed the expectations of our guests

2. Plausible We understand the principle that fun is different for

chance of success every individual so we offer a diverse on-board
yes experience that provides guests with a variety of
ways to enjoy a memorable vacation on one of our
spectacular floating resorts.
3. Noble Purpose To cruise on one of our vessels is to cross over to
yes a world of endless fun and excitement.
 Carnival Mission Evaluation
Criteria Evaluation
Customers R Absolute dedication to understanding and fulfilling our customers needs
with the appropriate mix of service, reliability and price for each customer
Products/Services R Our mission is to deliver exceptional vacation experiences through the
worlds best known cruise brands
Markets R We will be the superior choice and the acknowledged leader and
innovator in the cruise travel industry worldwide.
Concern for survival, R Ensuring sustainable and long-term increase in shareholder investment
growth & profitability by maintaining double-digit growth and leveraging on operational efficiencies
and synergies;
Technology R An aggressive shipbuilding program which incorporates state-of-the-art
technology, innovation and mechanical superiority;
Philosophy R A professional organization which conducts its business honestly and with
unquestionable integrity;
Self-concept R cruise brands that cater to a variety of different lifestyles and budgets, all
at an outstanding value unrivaled on land or at sea.
Concern for public R operating environmentally responsible ships and committed to preserving
image the purity of the crystalline waters we call home.
Concern for R A work environment that rewards achievement, develops potential,
employees motivates the collective spirit, and offers each employee superior
opportunities for personal and professional growth.
Concern for nation- R operating environmentally responsible ships and committed to preserving
 1

EXTERNAL
AND
INTERNAL
SCANNING
 Porters Five Forces Fuel & Shipbuilding
suppliers

High capital Threat of

requirements
New entrants Bargaining
(LOW) Power of
Suppliers
(HIGH)

Heightened
Rivalry among
competition
Competitors
(HIGH)

Bargaining
Power of Club Med
All Inclusive Tours
Buyers Threat of
(HIGH) Substitute
Products
Buyer has all relevant (MODERATE)
info
Low switching costs
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
Integrated network of sales
4 0.15 3 0.45 3 0.45 2 0.30
channels
5 Product Quality 0.10 3 0.30 2 0.20 2 0.20
6 Financial position 0.10 3 0.30 2 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15
Carnival 4 largest
has 0.60
capacity3 with 3.5
0.45 3 0.45
million passengers,
3 Advertising Royal
0.15 is next
4 with 0.60
2.5 million3passengers
0.45 and 3Star is 0.45
last
Integrated network of sales
with 1.1 million passengers
4 0.15 3 0.45 3 0.45 2 0.30
channels
5 Product Quality 0.10 3 0.30 2 0.20 2 0.20
6 Financial position 0.10 3 0.30 2 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15
The power 4of Carnivals
0.60 global3 brands0.45 3
comes from the0.45
Integrated network of sales effective integration of design (interiors and exteriors of
4 0.15 3 0.45 3 0.45 2 0.30
channels ships), operations (service and entertainment) and market
5 Product Quality appeal
0.10 (imaginative
3 imagery/slogans).
0.30 2 0.20 2 0.20
6 Financial position 0.10 3 0.30 2 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
Integrated network of sales
4 Carnival
0.15 was3 the first
0.45cruise line
3 to break
0.45 away2from 0.30
channels
traditional print media and to use television to reach a
Product Quality 0.10 3
Its0.30 2 0.20
with 2Kathie 0.20
5
broader market. Fun Fun commercials Lee
6 Financial position 0.10 have
Gifford 3 been so0.30successful.
2 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
Integrated network of sales
4 0.15 3 0.45 3 0.45 2 0.30
channels
5 Product Quality 0.10of Carnivals
One 3 0.30
strength is 2its vertical
0.20integration
2 0.20
6 Financial position 0.10
downstream 3 with Airtours,
0.30 one2 of the0.20 1 UK travel
four largest 0.10
agents.
7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
Carnival has received consistently good ratings
Integrated network of sales
4 0.15its customers
from 3 0.45 3 to product
with recard 0.45 quality.
2 0.30
channels
5 Product Quality 0.10 3 0.30 2 0.20 2 0.20
6 Financial position 0.10 3 0.30 2 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity Carnival shows 4the strongest
0.20 0.80 financial
3 position
0.60 with2a return on
0.40
2 Global brand power equity 0.15
(ROE) of 414% compared
0.60 to3Royal 0.45
Caribbeans
3 9% and
0.45
Star Cruises 3%. The double digit ROE for Carnival has been
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
sustained over the years. In contrast, Royal Caribbeans ROE
Integrated network of sales
has gone
4 0.15down 3from 12%0.45to 9% during
3 the period 2000
0.45 2 to0.30
2002.
channels
Star Cruises ROE, on the other hand, stands at a fragile 3%
5 Product Quality 0.10 3 0.30 2 0.20 2 0.20
6 Financial position 0.10 3 0.30 2 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
Cost containment has largely been responsible for
Integrated network of sales Carnivals success, as it has managed to keep operating
4 0.15 3 0.45 3 0.45 2 0.30
channels expenses at a 3-year average of 77% against revenues.
5 Product Quality 0.10 averages
3-year 3 for0.30 2 0.20
Royal Caribbean and Star2Cruises
0.20
are
6 Financial position at0.10
83% and3 91% respectively.
0.30 2 l. 0.20 1 0.10

7 Cost containment 0.10 3 0.30 3 0.25 1 0.10

8 Management depth 0.05 3 0.15 3 0.15 3 0.15

Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15
Carnivals 4
major 0.60
successes 3
have 0.45
especially 3 driven
been 0.45by
3 Advertising strategic
0.15 expertise
4 of Arison and
0.60 3 Dickinson
0.45 armed
3 with0.45
Integrated network of sales
bigger resources that allow them to implement those
4 0.15
strategic 3 that0.45
plans propelled 3the company
0.45 2 0.30
to leadership
channels
5 Product Quality
status.
0.10
However,
3
the management
0.30 2
teams
0.20
of Star
2
Cruises
0.20
and Royal Caribbean are themselves experts in their fields
6 Financial position 0.10
and 3 0.30 succeeded
have continuously 2 in0.20
ensuring 1that their
0.10
Cost containment / Price respective companies
7 0.10 3 0.30do not 3lag too0.25
far behind1 the leader.
0.10
competitiveness
8 Management depth 0.05 3 0.15 3 0.15 3 0.15
Total 1.00 3.50 2.75 2.15
 Competitive Profile Matrix
Carnival Group Royal Caribbean Star Cruises

Critical Success Factors Weight Rating Score Rating Score Rating Score
1 Capacity 0.20 4 0.80 3 0.60 2 0.40
2 Global brand power 0.15 4 0.60 3 0.45 3 0.45
3 Advertising 0.15 4 0.60 3 0.45 3 0.45
Integrated network of sales
4 0.15 3 0.45 3 0.45 2 0.30
channels
5 Product Quality 0.10 3 0.30 2 0.20 2 0.20
6 Financial position 0.10
Carnival 3
is highly 0.30
competitive2versus0.20 1
its two nearest 0.10

7 Cost containment competitors

0.10 3Royal Caribbean
0.30 3and Star
0.25Cruises.1 This is0.10
confirmed by its having the highest market share.
8 Management depth 0.05 3 0.15 3 0.15 3 0.15
Total 1.00 3.50 2.75 2.15
 1

SEGMENTATION
AND STRATEGIC
POSITIONING
 MARKET
SEGMENTATION

Socio-Economic
Segmentation
Approach
STRATEGIC POSITIONING
Capacity
STRONG

Strength of Carnival
Global Brands
(Customer
Royal Caribbean
Awareness) LOW HIGH
Star

Market
Company
Share
Carnival 34% WEAK
Royal Caribbean 27%
Star Cruises 12%
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary
Approximately expenditure
100 million US(disposable 0.15taken a cruise
residents have never 3 0.45
holiday
income); high GDP per capita
compared with some 20 million that have. North America dominates with a
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3
67.5% share of the worldwide cruise passenger market followed by 0.30
30% of cruisers are single age 25-39 years old.
Western Europe with 22.5 %. Asia accounts for the remaining 10%.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of spent
The money cruisersby
arepassengers
aged 40+ married
on while
comes 0.10
leisure 3
from disposable 0.30
30% of cruisers are single age 25-39 years old.
income. High GDP generally signals growth for an economy, which also
4-P Liberalization of international ports 0.05 2 0.10
drives the increase in household income.
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international 0.05
ports of 40+ married couples 2 0.10
There is a growing number that are taking cruises
5-T Major
as shipyards
their are able
preferred to provide
yearly adequate
vacation supply of
preference. 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards
There has beenare able to provide
a 20% adequate
increase supply
in the of 0.05
liberalization 3
of international 0.15
ports
ships
in the past 3 years. Because landed ports are enhancements for the
cruise
EXTERNALservice
THREATSit would benefit the cruise company if more ports are
1-E opened and fuel
Rise of bunker liberalized.
cost T 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
In the last 3 years Norwegian shipyards have increased their building
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
capacity by 50%. The availability of supply
30% of cruisers are single age 25-39 years old.
from the shipyards allows the
company to effectively plan for capacity build-up.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt
Cruise shipDisney Cruisesexpenses are impacted by 0.10
operating changes in2bunker 0.20fuel
3-C prices.
Heightened Post war issues in Iraq had elevated issues
competition 0.10
on higher3 fuel cost,
0.30

4-C thus, operating

Availability cost (other
of substitutes per available berth day is expected
types of vacations) 0.05 to be3 high. Bunker
0.15
5-P
fuel cost have risen by 22% in the last year.
Terrorism and security issues 0.05 1 0.05
.
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
Walt
30% ofDisneys involvement
cruisers are in the
single age 25-39 cruise
years old. market since last year shows that
4-P even a company
Liberalization with no
of international deep-sea shipping experience
ports 0.05 can become
2 a
0.10
5-T highly successful
Major shipyards operator.
are able to provideDisneys success
adequate supply of hardly
0.05came as3a surprise,
0.15
bearing
ships in mind that the corporation is able to draw from its vast
experience
EXTERNAL THREATSin the operation of theme parks and resorts and its strong
1-E brand.
Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
There are more than 50 cruise lines with the majority competing for the
EXTERNAL THREATS
same contemporary market segment as Carnival. Each of these cruise
1-E Rise ofhave
bunkerbeen
fuel cost 0.15 1 0.15
lines more aggressive in the advertising and in upgrading the
2-C Entry of Walt Disney Cruises
ships. 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E There are sofuel
Rise of bunker many
cost other vacation offers that require
0.15 less planning.
1 For
0.15
2-C
example people could go to the beach, take a bus0.10 tour across2
the country,
0.20
Entry of Walt Disney Cruises
go to Disney World, Club Med, take a Trafalgar European tour.
3-C Heightened competition 0.10 3 0.30

4-C Availability of substitutes (other types of vacations) 0.05 3 0.15

5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry uncertain
The of Walt Disney Cruises
environment 0.10 concerns
can impact bookings and 2 regarding
0.20
3-C post-war
Heightened effect 0.10 issued3to various
in Iraq compounded by security alerts
competition 0.30

4-C national
Availability governments.
of substitutes (other types of vacations) 0.05 3 0.15
5-P Terrorism and security issues 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
E-F-E Matrix
Weighted
Key External Factors Weight Rating Score
EXTERNAL OPPORTUNITIES
1-E Expansion of overall leisure market particularly in North 0.20 4 0.80
America & Europe
2-E Increase in discretionary expenditure (disposable 0.15 3 0.45
income); high GDP per capita
3-SC Approx 70% of cruisers are aged 40+ married while 0.10 3 0.30
30% of cruisers are single age 25-39 years old.
4-P Liberalization of international ports 0.05 2 0.10
5-T Major shipyards are able to provide adequate supply of 0.05 3 0.15
ships
EXTERNAL THREATS
1-E Rise of bunker fuel cost 0.15 1 0.15
2-C Entry of Walt Disney Cruises 0.10 2 0.20
3-C Heightened competition 0.10 3 0.30

4-C Carnival
Availability is doing a slightly
of substitutes better
(other types than average job0.05
of vacations) of responding
3 to the
0.15
5-P opportunities and issues
Terrorism and security threats in its environment. 0.05 1 0.05
Total 1.00 2.65
E=Economic, SC=Socio-cultural, P=Political, T=Technological, C=Competitive
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

6-M Cost Containment 0.10 3 0.20
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15

INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, globalisbrands
Carnival that command
operating high of
a fleet degree of awareness,
70 ships 0.15 another
and will have 4 13 ships
0.60
recall, consumer trust and loyalty
scheduled for delivery by year-end 2006. It has achieved several first in
3-M Strong advertising campaign 0.10 4 0.20
the cruise industry; with more than 1 million passengers carried in a single
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40
year and first cruise line to carry 5 million passengers.
5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30
6-M Cost Containment 0.10 3 0.20
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15

INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
Its global brands are the strongest in the industry because these brands
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40
allow direct association and identification with the respective markets they
5-M Highlyto
integrated 0.10 3 0.30
wish serve.network
The ofultimate
sales channels/flexible
manifestationdeployment
of a brands strength is when its
6-M very name Carnival becomes the global generic term
Cost Containment 0.10 for cruising.
3 0.20
7-MT Among all themanagement
Strategy-oriented cruise companies
& multi-culturalno other brand could
workforce 0.05 hold a3candle to
0.15

Carnival.
INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M ThemeThe advertising
ship concept (e.g. "funteam for Carnival
ship" concept) is doing its 0.10 4 it leads0.40
job well for it
5-M competitors
Highly in advertising
integrated network and promotion.
of sales channels/flexible deployment The Carnival
0.10 Cruise
3 Line0.30
is a
6-M common name because of such advertising and
Cost Containment 0.10 promotion
3 efforts.
0.20
7-MT Companys
Strategy-oriented commitment
management to intensified
& multi-cultural workforce advertising
0.05 is evident
3 in the
0.15

INTERNAL WEAKNESSES significant advertising budget appropriated. 0

1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

The Fun Oriented Philosophy is there to keep everyone involved. There
6-M Cost Containment 0.10 3 0.20
are various activities to keep young and old alike entertained. The ship
7-MT 0.05
Strategy-oriented
has management
been designed to&cater
multi-cultural workforce
to everyones interests. Those 3who come 0.15

aboard
INTERNALCarnivals
WEAKNESSES modern, gaily decked out vessels, 0 expect to have fun.
1-O Thus,
High fixedincost
the public psyche, Carnival is the Fun Ship, 0.10 the provider
1 of0.10
good
2-O time. The Fun Ship is widely acknowledged as the
Risk of overcapacity 0.05 industrys
2 cleverest
0.10
3-M communications
No Asian market idea because it succeeds in informing 0.05 customer
1 precisely
0.10
4-HR what
Lack of the experience
performance-driven is going
incentives to be.
for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

6-M Cost Containment 0.10 3 0.20
Carnivals regional offices are literally floating around the sea most of the
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15
time, coordinating and managing these moving targets. It has 18 servers
INTERNAL WEAKNESSES 0
running on Microsoft Back Office server one on each ship, plus other in
1-O High fixed cost 0.10 1 0.10
the companys headquarters in Miami; offices in LA, Orlando and Puerto
2-O Risk of and
Rico overcapacity
soon shipyards in Italy and Finland. 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

6-M Cost Containment 0.10 3 0.20
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15
The company has over the years sustained its double digit profitability and
INTERNAL WEAKNESSES 0
this has been possible because the company has been able to effectively
1-O
and contain both fixed and variable costs. 0.10
High fixed cost
control 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

6-M Cost Containment 0.10 3 0.20
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15

INTERNAL WEAKNESSES
The ability of management 0
to act quickly on opportunities is a major
1-O strength
High fixed cost for Carnival. The most recent manifestation 0.10 1 companys
is the 0.10
2-O successful
Risk of overcapacitybid over P&O Cruise Line. A multi-cultural 0.05 workforce
2 allows
0.10
3-M theAsian
No company
market to have a truly global persona and allows 0.05 the 1assimilation
0.10 of
4-HR Lack of performance-driven different
incentives forcultures
staff in the crew service.
0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated

Because of itsnetwork of sales channels/flexible
purchase of new cruise ships it has 0.10
deployment high fixed3costs. 0.30
6-M Depreciation
Cost Containmentand fuel are some of the more significant 0.10 costs,3 which 0.20
7-MT cannot be avoided
Strategy-oriented every
management time a ship
& multi-cultural sets sail.
workforce 0.05 3 0.15

INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Deliveries of new
Theme ship concept ships
(e.g. "fun ship"by 2006 herald an increase
concept) 0.10in capacity
4 to 42,000
0.40

5-M LB. The risk

Highly integrated depends
network of sales on the companys
channels/flexible ability to0.10
deployment build the3 customer 0.30
6-M base at about the time the new ships will be available
Cost Containment 0.10 for sailing
3 to fully
0.20
7-MT
cover the massive fixed costs expected. 0.05 3 0.15
Strategy-oriented management & multi-cultural workforce
.
INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

6-M Cost Containment 0.10 3 0.20
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15

INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
The company has not developed cruises that cover the Asian market.
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40
A major component of the cruise is the service. Carnival has not set up
5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30
performance-driven incentives that will motivate crew to always render
6-M 0.10 3
Cost Containment
their best service and adhere to Carnivals exemplary service level 0.20
7-MT standards.
Strategy-oriented management & multi-cultural workforce 0.05 3 0.15

INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
I-F-E Matrix
Weighted
Key Internal Factors Weight Rating Score
INTERNAL STRENGTHS
1-O Capacity of 68 ships, 50% under 10 years old, with over 100,000 0.15 4 0.60
berths
2-M Strong, global brands that command high degree of awareness, 0.15 4 0.60
recall, consumer trust and loyalty
3-M Strong advertising campaign 0.10 4 0.20
4-M Theme ship concept (e.g. "fun ship" concept) 0.10 4 0.40

5-M Highly integrated network of sales channels/flexible deployment 0.10 3 0.30

6-M Cost Containment 0.10 3 0.20
7-MT Strategy-oriented management & multi-cultural workforce 0.05 3 0.15

INTERNAL WEAKNESSES 0
1-O High fixed cost 0.10 1 0.10
2-O Risk of overcapacity 0.05 2 0.10
3-M No Asian market 0.05 1 0.10
4-HR Lack of performance-driven incentives for staff 0.05 1 0.05

Total 1.00 3.05

C=Culture, MT=Management, M=Marketing, F=Finance, O=Operations, HR=Human Resources, I= Information
Systems R=Research & Development
 1

STRATEGY
SELECTION
3 Internet friendly with on-line bookings 0.10 4 0.40 3 0.30 2 0.20

4 Decision Stage - QSPM 0.10

Theme ship concept "fun ship"
4 0.40 3 0.30 2 0.20

5 TALLY TABLE 0.10 4 0.40 2 0.20 3 0.30

Highly integrated network of sales channels
STRATEGY OPTIONS TOWS SPACE IEM GSM TOTAL
6 0.05 4 0.20 2 0.10 3 0.15
StrongINTEGRATION
advertising campaign
STRATEGIES

7
1 Forward Integration 0.05
1 31 0.15 21 0.103 4 0.20
Strategy-oriented
2 andIntegration
Backward multi-cultural workforce 1 1 2

Cost containment
3 and Integration
Horizontal competitive pricing 0.05
1 41 0.20 31 0.153 2 0.10
8
INTENSIVE STRATEGIES
(sustained profitability)
4 Market Penetration 1 1 1 1 4

WEAKNESSES
5 Market Development 1 1 1 3
6 Product Development 1 1 1 3

1 DIVERSIFICATION STRATEGIES 0.10 4 0.40 3 0.30 1 0.10

High fixed cost
7 Related Diversification 1 1 2
2 0.05 4 0.20 3 0.15 1 0.05
Risk of overcapacity
8 Unrelated Diversification 1 1

3 0.05 2 0.10 4 0.20 3 0.15

No Asian markets Market Market Horizontal
4 0.05 Penetration Development Integration
Lack ofCritical
performance-driven rewards for staff
Success Factors Weight AS TAS AS TAS AS TAS

SUM TOTAL ATTRACTIVENESS SCORE

OPPORTUNITIES 1.00 6.80 4.45 4.65
Expansion of overall leisure market particularly 0.20 4 0.80 2 0.40 3 0.60
1
in North America & Europe
Increase in discretionary expenditure 0.15 4 0.60 2 0.30 3 0.45
2
(disposable income),; high GDP per capita
Key Strategy for Carnival
Carnival seeks to attract passengers from the broad vacation
market, including those who have never been on a cruise ship
before and who might not other consider a cruise as a vacation
alternative, through aggressive advertising and promotion.
Why Market Penetration?
Current markets are not yet saturated
Historically, the growth in sales for the company has been driven
by significant investments in advertising
Build up of market share will create significant economies of
scale that will provide major competitive advantages for Carnival
in terms of containing its costs, competitive pricing and more
creative service offerings
Dual challenge for Carnival
Address potential first-time cruisers (educate the market)
Encourage repeat customers to cruise more often

 1

STRATEGIC
OBJECTIVE
Strategic Objective
Achieve $10 B in revenues by 2005
l Company already achieved 205% growth from 1996 to
2001
l Revenues leapfrog from $4.5B in 2001 to $10B by 2005
showing a growth rate of 220% within 4 years
l Set target is indeed challenging but considered
achievable due to the following reasons:
1. Studies indicate that only 5% of the North American target market
cruise for leisure purpose (estimated market potential is $50B)
2. European cruise business is growing even faster than North
American market (studies show only 1% of EU travelers took a cruise
in 2000)
Thank You