Case Analysis Carnival Corporation And Plc Tourism Essay

Carnival Corporation is the largest and most successful sail lines in the universe. Their corporate offices are located in Miami, Florida with over 91,000 employees with offices all over the universe. It all started in 1972 by Ted Arison who had a vision to make the greatest sail line in the universe. Carnival easy started to turn and over clip was awarded “ The World ‘s Most Popular Cruise Line ” . ( Carnival, 2006 ) On 1987 the direction squad decided to take advantage to its well-known repute and went public entrance in the New York Stock Exchange as CCL.

Today Carnival has added over 100 ships and acquired premium sail lines in about every sector of the industry. In 1989 Holland America Line was acquired by Carnival adding niche operators including Windstar Cruises and Alaskan/Canadian sail lines. In 1992 several luxury line drive, where acquired such as Seabourn and Europe ‘s largest operator Costa Cruises. Carnival was non done spread outing and in 1998 they acquired the prestigiousness ‘s luxury operator Cunard who built the universe largest ocean line drive Queen Mary 2. ( Carnival, 2006 )

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Carnival Corporation was get downing to take form, but on 2003 they successfully merged with Princess Cruises making a planetary power house. Carnival besides purchased P & A ; O cruises, Ibero sails and AIDA Cruises lines. Carnival had become the largest sail operator in the universe from US to Europe. Although Carnival managed several sail line operator each line had its ain differentiation and separate operations.

In 1972 Ted Arison proprietor and operator of all Carnival had a vision. Ted narrative begins when he took a little ship called the Mardi Gras and converted it into a little ocean line drive. The Mardi Gras was an advanced sail line drive like no other for its clip that merely made a one-way trip from Miami to San Juan, Puerto Rico. ( Carnival, 2006 ) Although it was n’t easy lasting, Ted Arison was focused to be successful and on 1974 he became full proprietor of Carnival sail line.

Organization every bit big as Carnival has direction squad that is broken up to different divisions. It starts from CEO & A ; Chairman Micky Arison, the following grade down is Howard S Frank as the COO who over sees all concerns of company, within that same grade is David Bernstein who is CFO of all Businesses. The Following grade down is Richard Ames SVP of Shared Services, within same tier Arnaldo Perez SVP General Counsel and Secretary. Next tier down is Larry Freedman who is Chief Accounting Officer and Controller. The last grade down are all the divisional Presidents who manage AIDA Cruises, Carnival Cruise Lines, Carnival Australia, Carnival UK, Costa Crociere S.p.A, Cunard Line, Holland America Line, Princess Cruises and Seabourn Cruise Line. ( David, 2013 )

Carnival overall end is to join forces all its trade names to make every country of the cruising industry. Carnival chief focal point is to pull all types of clients who are in different demographic, budgets, geographic and all civilizations. The chief constructs that Carnival tries to accomplish is to be known as “ Fun Ship ” , along with all the comfortss that go with it such as Luxury, elegance and alien finish. ( David, 2013 )

Carnival has invested in their ain selling division, were they offer a 10 % committee to their travel agents and offer other fillip plans. The selling division has focused on marketing stuff, advertizement, website interaction, seminars and pictures. These attempts are excessively assist agent in the field to bring forth more gross revenues. Their website division has created promotional runs that offer price reductions, VIP nest eggs, resident price reductions, particular repasts, and holiday trades. ( David, 2013 )

Carnival domestic and international finishs are turning. New paths are being developed and new ships are being built. Traveler ‘s most appealing finishs are the Caribbean, Alaska, Bahamas, Hawaii, Mediterranean/Greek Island/Turkey, Bermuda, Europe, Panama Canal and least appealing West seashore of Mexico. ( David, 2013 ) . Competition is turning among the other sail lines and more subjects based environment is get downing to germinate. For illustration, onboard comfortss are being created such as cell phone entree, amusement, Villas, multiple themed eating house, fittingness centre and watering place are doing this industry competitory. ( David, 2013 ) More and more people are cruising and more bigger and better luxury line drives are being built around the clock. Carnival is the leader in the industry but it must non lose their border because competition can strike hard them down to 2nd topographic point.

Executive Summary

Carnivals Mission statement is to be the universe ‘s largest sail operator that offers exceeding

client service to all its patronage. Carnival ‘s figure one end is for its riders to hold an

memorable experience and to go on to go on Carnival. Carnival would wish to offer its clients a

One-stop store for going. Carnival has eleven different Cruise lines around the universe that can do

that happen.

Despite of economic down bends of the touristry industry ; Carnival has continuously grown and expanded their portfolio of sail line trade names. Carnival Corporation has ten sail lines with one hundred active vass. In its portfolio of sail line, Carnival has been able to bring forth nine per centum gross and presenting new ships each twelvemonth. Carnival growing scheme has allowed the company to accomplish a four per centum addition in gross growing and keep the largest and most profitable travel company globally.

Since its public offering and 40 old ages in concern, Carnival has managed to get multiple sail lines that cater to the planetary travellers. Carnival ‘s planetary enlargement is now making out to travellers in North America, Europe and Australia. Carnival cruises continue to offer paths merchandises around the universe and offer all types of amusement including jaunts. Carnival continues to venture into parts that are untapped markets, such as Asia to increase market portion.

Cruise industry has many rivals seeking to take each other ‘s market portion. The few participants who compete with each are Carnival Corporation, Royal Caribbean Cruises, Celebration Cruise line, Star Cruises, Norwegian Cruise Lines and Radisson Seven Seas Cruises. Each company has its ain niche and advertises in a certain patronage. With an across-the-board subjects cruise line drives are get downing to separate themselves by the type of services they offer. The industry tendency is to make monolithic ships that allow sail line to offer more activities that can bring forth extra grosss to the sail company. Today the Cruise industry is turning and more ships are presently in production. Cruising is now a major participant in the travelling industry and more and more people are cruising today. Market conditions for the sail industry is turning and for the last five old ages the sail industry has been turning at 8 % each twelvemonth. ( Cruise touristry, 2010 ) .

Internal Assessment ( A )

After reexamining three old ages of Carnival 10k informations from Financial Statement and Balance sheet, we can see that Carnival is the biggest sail line operator in the universe. The analysis of ratios is broken up into five sections including, liquidness, activity, profitableness, plus direction and purchase. Within these sections you can see the company ‘s current ratio to entire debt to assets. This information indicates the company is strong and sound.

Under the current ratios you take the current assets divide by current liabilities which include hard currency, histories receivable and short term investings. Carnival shows a down tendency of liquidness from 2009 to 2011. When you look at the current ratios, you see that in 2009 the current ratios were 0.31. In 2010 there was a 0.09 bead which left them with a current ratio of.22, and in 2011 you merely see a.01 bead which left them with a current ratio of.21.

Carnivals receivables turnover shows an addition in the ability to widen recognition gross revenues and cod receivables as the old ages progressed from 2009 to 2011. Carnival has a successful rate on roll uping receivable. In 2009, Carnival had an Accounts Receivable Employee turnover of 37, had increased by 27 % for a sum of 47 in 2010. During 2011 you see a 30 % addition in histories receivable turnover which left them with a ratio of.61 in 2011. Carnival shows they are able to widen recognition and collect in a 30 twenty-four hours timeframe.

Looking at Carnivals Return on Asset per centum, you can see in 2009 ROA came in at 4.86 has an addition of 0.46 % in 2010 for a sum of 5.32 % and incurred a little lessening. In 2011 the entire ROA came in at 5.02 % . Under the Total Assets Turnover ( TAT ) you see Carnival shows an addition during 2009 -2011. In 2009, Carnival had a TAT of.37, an addition of.02 % in 2010 for a TAT of.39, and in 2011 reflected another.02 % addition for a TAT of.41. Based on the ROA and TAT comparings, Carnival maximizes their assets and the figure shows an upward tendency.

When you look at the Operating Net income Margin ( OPM ) on Carnival you see borders have been worsening through the period of 2009-2011. Carnival had an OPM of 16 % in 2009, 16.22 % in 2010 and a lessening in 2011 to 14.28 % .Net income by per centum of gross revenues declined for Carnival from 2010 to 2011 by 1.56 % , while they merely saw a addition in gross revenues of.37 % from 2009 to 2010. Now, when you look at gaining per Share ( EPS ) , as a stockholder these Numberss would bespeak how profitable the company can be which Carnival had EPS of 2.24 in 2009, and increase in EPS of 0.23to entire 2.47 in 2010, and a little lessening of.05 in 2011 to entire 2.42. Stock holder for Carnival would likely desire to keep onto their stock as it shows a consistent tendency.

Overall, Carnival has lower liquidness ratios and has much better direction of its assets, relies less on debt to finance its assets. Carnival has higher monetary value per gaining per centum for 2011. When you look at stock monetary value history, Carnival has a consistent monetary value in the $ 30 ‘s monetary value scope. After looking at all ratio ‘s from Liquidity Ratios, Leverage ratios, Activity ratios, Profitability ratios and growing ratios. Carnival has great direction of its assets and it is stable for investors.

Company Name: Carnival Corporation

2009

2010

2011

Balance Sheet ( $ 000,000 )

$

$

$

Assetss

Current Assetss

Cash & A ; marketable securities

538

429

450

Histories receivable

362

248

263

Inventories

320

320

374

Prepaid disbursals

298

247

225

Entire current assets

1,518

1,244

1,312

Gross fixed assets

37,734

39,836

42,204

Less: Accumulated depreciation

7,864

8,869

10,150

Net Fixed assets

29,870

30,967

32,054

Intangible assets

4,797

4,640

4,652

All other noncurrent assets

650

639

619

Entire assets ( TA )

36,835

37,490

38,637

Liabilitiess and Stockholders ‘ Equity

Current Liabilitiess

Notes collectible

135

740

281

Current adulthoods — L.T.D.

815

613

1,019

Histories collectible

568

503

576

Income revenue enhancements collectible

Accumulations and other current liabilities

3,449

3,899

4,229

Entire current liabilities

4,967

5,755

6,105

Long-run debt

9,097

8,011

8,053

Other Long-run Liabilitiess and Deferred Income

732

693

647

Entire liabilities

14,796

14,459

14,805

Stockholders ‘ equity

Common stock

6

6

6

Ordinary portions

354

355

357

Paid-in capital

7,920

8,094

8,180

Retained net incomes

15,561

17,224

18,349

Accumulated other comprehensive loss

462

( 254 )

( 209 )

Treasury stock

( 2,264 )

( 2,394 )

( 2,851 )

Entire shareholders ‘ equity

22,039

23,031

23,832

Entire liabilities & A ; equity

36,835

37,490

38,637

2009

2010

2011

Income Statement ( $ 000,000 )

$

$

$

Gross saless gross

13,460

14,469

15,793

Less: Cost of goods sold

8,407

9,092

10,299

Gross net income

5,053

5,377

5,494

Less: Operating disbursals

Gen. & A ; Adm. and Selling

1,590

1,614

1,717

Depreciation disbursal

1,309

1,416

1,522

Entire operating disbursals

2,899

3,030

3,239

Operating income ( EBIT )

2,154

2,347

2,255

Interest Income

14

12

11

Less: Interest disbursal

( 380 )

( 378 )

( 365 )

Additions on fuel derived functions, cyberspace

1

Other income ( disbursal ) , net

18

( 2 )

10

Net incomes before revenue enhancements ( EBT )

1,806

1,979

1,912

Less: Income Taxs

16

1

Net income

1,790

1,978

1,912

Carnival

2009

2010

2011

Liquid

Current Ratio

0.305617

0.21616

0.214906

Acid Test Ratio

0.181196

0.117637

0.11679

Activity

Inventory Employee turnover

26.27188

28.4125

29.68012

Dayss stock list at manus

13.89318

12.84646

12.2978

Histories Receivable Employee turnover

37.18232

47.43934

61.81213

Dayss account receivable outstanding

9.816493

7.694036

5.90499

Entire Assets Turnover

0.365413

0.389344

0.414912

Profitableness

Gross Profit Margin

0.375409

0.371622

0.347876

Operating Net income Margin

0.16003

0.162209

0.142785

Asset Management

Tax return on Total Assetss

0.048595

0.053226

0.050232

Tax return on Equity

0.08122

0.087775

0.0816

Fiscal Leverage/Asset Financing

Timess Interest Earned

5.668421

6.208995

6.178082

Entire Debt to Assets

0.401683

0.385676

0.383182

Entire Long Term Debt to Assets

0.246966

0.213684

0.208427

Entire Debt to Equity

0.671355

0.627806

0.621224

Stock Price

31.69

46.11

30.64

EPS

2.24

2.47

2.42

P/E

14.14732

18.66802

12.66116

Internal Assessment ( B )

Organization every bit big as Carnival has direction squad that is broken up to different divisions. It starts from CEO & A ; Chairman Micky Arison, the following grade down is Howard S Frank as the COO who over sees all concerns of company, within that same grades is David Bernstein who is CFO of all Businesses. The Following grade down is Richard Ames SVP of Shared Services, within same tier Arnaldo Perez SVP General Counsel and Secretary. Next tier down is Larry Freedman who is Chief Accounting Officer and Controller. The last grade down are all the divisional Presidents who manage AIDA Cruises, Carnival Cruise Lines, Carnival Australia, Carnival UK, Costa Crociere S.p.A, Cunard Line, Holland America Line, Princess Cruises and Seabourn Cruise Line. ( David, 2013 )

If you look at the organisation chart Carnival Management squad, you see the hierarchical of the line relationship of the concatenation of bid. Carnival runs an effectual organisation but I would urge a different attack. The Chain of bid will get down with the CEO which looks at the overall executive squad. The grade below would be Chief operation officer which will pull off all internal sections such as Marketing, Gross saless, Customer Service and Operations. On this same line of bid you have Chief fiscal officer which will pull off the accounting section along with the accountants. Following to the CFO you have president of Cruise lines this place will supervise all the regional managers. The following grade down would be American sail manager which will pull off all Domestic sail lines and a European sail manager which will manage all international sail lines. The following grade down would be the Presidents of Carnival US, Holland America and Princess Cruises. On the same grade you will happen Presidents for Aida, Carnival Australia, Carnival UK, Costa Cruises, Cunard and Seabourn. These Presidents will pull off all the lower degree direction such as the Vice Presidents and Managers. This organisational chart has a concatenation of bid that manages all degrees of the company. The power of executive has more upper direction to the directors and this manner there is a clear communicating channel to the top. The current organisation chart does n’t hold a concatenation of bid that manages the full company and all its divisions.

Current Organizational Chart

Recommend Organization Chart

Internal Assessment ( C )

High Customer Service

10

A

9

A

8

A

7

A

6

A

*R

5

*D

4

A

*C

3

A

*N

2

A

In-Expensive

$ 500

$ 600

$ 700/ 1

$ 800

$ 900

$ 1,000

-1

A

-2

A

-3

A

-4

A

-5

A

-6

A

-7

A

-8

A

-9

A

-10

A

Low Customer Service

*C: Carnival

* R: Royal Caribbean

* N: Norse Cruise Line

*D: Disney Cruise Line

When comparing Carnival from its rivals such as Royal Caribbean, Norse and Disney you can see where these sail lines compete with one other. The Profile is broken up by four classs, High Customer Service, Low Customer Service, and Expensive to In-Expensive. Customer Service is big function when it comes to cruising. Monetary values besides play a major function when it comes on taking a sail line. I compared all four companies on a 4-7 twenty-four hours sail to the Caribbean departing from Miami, Fort Lauderdale and Port Canaveral. After comparing the reappraisal and monetary values of all four sails, the most expensive trip was Royal Caribbean. Oasis of the Sea is one of the largest ships sail ship in the universe with a evaluation of 88 % in client satisfaction and pricing runing from $ 749 to $ 1599 ( non including revenue enhancements, port fees, away season ) . Travelers rated Disney Dream sail of 84 % with pricing runing $ 480 to $ 1900 ( non including revenue enhancements, port fees, away season, 4 dark sail ) . Critics gave Carnival Dream a 75 % evaluation with pricing runing from $ 299 to $ 749 ( non including revenue enhancements, port fees, away season ) .The last company evaluated was Norse Epic having a 72 % evaluation with monetary values from $ 429 to $ 899 ( non including revenue enhancements, port fees, away season ) .

Carnival Strategies is to vie by offering the most low-cost all inclusive amusement travel experience anyone can hold. Carnival Cruise Lines has 24 ships in its fleet. Carnival purchase used ships and refurbishes them with new sweetenings. By making this Carnival is salvaging 1000000s of dollars and is able to maintain costs low. Another scheme carnival does is that it purchases big sums of fuel when monetary value of oil is low. Carnival selling scheme is to trade name their name as the merriment ship ; people are drawn to affordable going that has dozenss of merriment. The advantage that Carnival has is that it ‘s the largest sail operator in the universe. This allows Carnival to hold negociating power politically, along with negociating new ports or to spread out smaller ports. This allows Carnival to increase their ship line and increase demographic range. The disadvantage is that Carnival is known as the cheapest sail line with refurbished ships that cater to the multitudes.

Royal Caribbean scheme is to concentrate on purchases newer ships. By making this they are constructing on their name trade name acknowledgment and advancing value to all of their luxury lines. Royal Caribbean disadvantages are that they have expensive ships that need to bring forth a high return on investing. Another disadvantage are fuel cost this can truly impact the profitableness of the company. Royal Caribbean chief end is to rule the sail industry with one name trade name at a clip.

Norse Cruises line scheme has about 8 % market portion in industry and turning. The advantage Norseman has is that they have 13 ships in there fleet. There demographics is turning from North America, Hawaii, Alaska and Europe. Norse disadvantages is that there fleet of 13 consist of older to new ships which requires frequent redevelopments. Having older ships can impact the name trade name acknowledgment of Norwegian for holding an image of holding old ships. Overall Norse Cruise Lines has many good properties that they have introduced, such as insouciant dining & A ; assortment of eating houses and Las Vegas shows. These are popular subjects that the industry is following.

Internal Assessment ( D )

Carnival ‘s value is to offer universe category service at a fraction of the monetary value. The “ Fun Ship ” is at that place motto and that is what they would wish to be known for. They spend infinite hours seeking to make activities that all of the riders would love and bask. Carnival ‘s figure one end is for all its riders to hold a memorable experience and to return back to its lines.

SWOT Analysis

Strengths

The largest sail operator in the universe with 11 sail brands0

Carnival most profitable company in the industry.

Has established name trade name acknowledgment as the ” Fun Ship ” .

Carnival has negociating powers with sellers, ports and political figures.

Able to buy fuel when monetary values are low.

Failings

Grosss are dropping.

Carnival generates bulk grosss in North America which means economic system can impact the company.

Currencies devaluation.

Long term debt on new ship building.

Opportunity

There is still market portion in the holidaying market.

Bigger ships are being made that carry more people.

Asia is an untapped market.

Menaces

US Tax loopholes may be run outing

Cap and Trade

Accidents on the ships

Security of the ships from plagiarists.

Internal Factor Evaluation Matrix

Internal Factor

WT

Rating

Strength

A

A

A

A

A

A

1. The largest Cruise Operator

10 %

3

2. Carnival Most profitable in the industry

15 %

4

3. Name trade name acknowledgment

8 %

3

4. Negotiation Powers

5 %

4

5. Purchase fuel for cheap

15 %

4

Failings

A

A

A

A

A

1. Grosss are dropping

20 %

1

2. Economy

17 %

1

3. Currencies devaluation

5 %

2

4. Long term debt

5 %

2

Entire Weighted Mark

A

A

A

100 %

A

A

A

A

A

A

A

A

Major Strength ( 4 )

Minor Strength ( 3 )

Minor Weakness ( 2 )

Major Weakness ( 1 )

External Assessment ( A )

Competitive Profile Matrix

A

A

A

A

A

A

A

A

A

A

A

Carnival Cruise Line

Royal Caribbean

Disney

Norse

Critical Success Factor

Weight

Rating

Weighted Mark

Rating

Weighted Mark

Rating

Weighted Mark

Rating

Weighted Mark

Ad

0.06

2

0.12

3

0.18

3

0.18

2

0.12

Brand Recognition

0.10

4

0.40

4

0.40

4

0.40

3

0.30

Financials

0.08

2

0.16

1

0.08

4

0.32

2

0.16

Customer Loyalty

0.10

4

0.40

3

0.30

3

0.30

3

0.30

Global variegation

0.08

3

0.24

2

0.16

1

0.08

2

0.16

Corporate Management

0.07

1

0.07

1

0.07

2

0.14

2

0.14

Product quality

0.08

3

0.24

4

0.32

4

0.32

3

0.24

Online presence

0.10

4

0.40

3

0.30

2

0.20

2

0.20

Price Competitiveness

0.10

4

0.40

2

0.20

2

0.20

4

0.40

Social Media

0.07

3

0.21

3

0.21

2

0.14

3

0.21

Customer Service

0.08

4

0.32

4

0.32

4

0.32

3

0.24

Market Share

0.08

2

0.16

3

0.24

1

0.08

2

0.16

A

1.00

A

3.12

A

2.78

A

2.68

A

2.63

External Assessment ( B )

Economic

The sail line industry is turning at a growing rate of 8 % and more people are going today than of all time before. Many Economic factors are involved, such as patronage ‘s economic places, growing in markets, currencies rates when working international and rising prices plays a function. Cruise operators will be affected under direction and operational degrees. If the monetary value of fuel starts to increase, so this will impact runing cost of the company. If involvement rates increase so this will impact the grosss of the company. Economic factor plays a major function of the endurance of the company.

Social / Cultural / Demographic

Social factors are measured by the Demographics, Population Growth and Age of their patronage. Popularity finishs and client experiences will place sail industry demands. For illustration if a certain demographic and age, has a positive experience on their holiday. Then a positive tendency will happen for that demographic and age section. Social surveies are of import to the sail industry to find selling chances on certain sections of the sail industry.

Today cultural factors play a function when going on a sail ship. There are several cultural finishs from The Caribbean, Alaska, Western Mexico, Mediterranean, Europe, South America and Asia Pacific. The Caribbean is most popular cultural finish in the universe and Mediterranean is following in popularity. As the sail industry grows more cultural finishs will be available.

Demographics factors are of import when carry oning research and development. When carry oning research they look at certain sections from Age, Income, Sex, Civil position, Occupancy, Education and Employment position. Conducting market survey requires statistical informations on each demographics. There are four different sections that are broken down by Luxury, Premium, Contemporary and Special. With all this information gathered, research and development can make a market scheme that will supply valuable information when making an paths or new finishs.

Technological

Technological factors are of import externally and internally within the company. Having good communications from direction to operations is a critical factor when runing a company. Cruise companies are besides looking for new technological promotion that can assist better safety happenings. New engineerings are being developed to help the multibillion dollar industry. Due to the addition production of new ships, engineerings are progressing each twelvemonth. Cruise ships are looking for the most advanced Maritime engineering, GPS systems and Satellite Weathering systems that the industry offers. Now that cruising has become a big portion of the travel industry new and safer systems are in demand.

Political / Government

Ongoing dealingss with Politicians and cruise line operators are necessities. Politicians are straight involved on spread outing and making ports, revenue enhancements, environmental fees, trade limitations and duties. These undertakings need the backup from the Politicians. Without understandings with authoritiess, sail operators would non be able to carry on concern in their states.

Governments and Political factors work manus and manus in the sail industry. Each states authorities is in communicating with the sail ship operators from port facilitation to exigencies safety & A ; deliverance happenings. Depending on the part, Plagiarists are a go oning job. Cruise ship companies rely on local authoritiess for protection from these menaces. Government plays an of import function when it comes to safety & A ; protection.

There are common benefits when working together with sail ship companies. The sail industry offers an addition of local employment within the metropolis and its ports. For illustration eating houses, hotels, taxis, subject Parkss, museums, stores, cab drivers and travel ushers are all positively affected. In some states tourism brings big amounts of grosss to the local metropolis and authoritiess. This enhances the relationship with sail companies and Politicians.

Legal

The Legal factors are of import to the sail industry. The sail industry has been monitored for many types of jurisprudence misdemeanors, such as employment, consumer, wellness and safety misdemeanors. If any sail company is caught, go againsting any of these Torahs, big mulcts or condemnable punishments can ensue from it. The legal happenings can damage political and governmental dealingss. This is why Legal factors play an of import function to the sail industry.

Environment

The Environment factors have a big impact to the sail industry. For illustration clime alteration and conditions can impact the sail industry as a whole. The sail ships have progress enduring systems that can observe storm motion. Environmental factors must be addressed when making newer sail ship. Cruise operators ends are to diminish the environmental effects to the environment, therefore diminishing clime alteration. For illustration rearward osmosis systems, shore power systems and wastewater systems all help diminish their environmental footmark. With force per unit areas from Politian ‘s, sail companies are forced to implement new environmental friendly engineerings that can hold a positive consequence to the environment.