Carnival

Reviewing the history of Carnival Corporation & PLC, I find the impressing story of how a single brand grew to the world’s largest cruise ship company. The company established its emperor by heavy M&A and successfully captured more than 50% of the North America and EU cruising market. The company’s history of expansion leads me to think about its future market strategy: if Carnival should further expand its business to Asian market, a market which has large potential but Carnival has limited focus in.

To answer this question, the first thing to be addressed is if Carnival really needs to expand its market given its current leading position in the industry. The company already holds 59 ships in North America and 39 ships in Europe and has dominated more than 46% worldwide cruising market. However, the company’s performance looks not quite good: its growth of total revenue has slowed down and its gross profit has dropped. The company is facing the problems of potential revenue decrease and cost increase. On one hand, the revenue might grow slowly or even drop if the poor macroeconomic conditions in North America and EU continue. On the other hand, the cost can fluctuate due to many unpredictable threats, including geopolitical, natural changes and unpredictable disasters. It is hard for the company to hedge the risk. Those problems put Carnival into a ‘change or die’ position. Since the cost is relatively hard to be controlled, a focus on revenue expansion might be a possible solution.