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Running Head: CARNIVAL CORPORATION & PLC 1

CARNIVAL CORPORATION & PLC 8

Introduction

For this paper, I shall focus on Carnival Corporation & plc, the world's largest multinational leisure travel company with its world headquarters in Miami, Florida. Carnival operates the largest portfolio of cruise brands in the United States, Australia, Asia, and Europe. Carnival cruise lines operate 105 cruise ships with 254,000 lower berths visiting over 700 ports offering customized cruise products, services, and vocational experiences to the world's most desirable destinations. Its ship lines include P&O cruises Australia, Swan Hellenic, Carnival cruise lines, P&O cruises, Ocean village, Cunard line, costa cruises, AIDA cruises, Windstar cruises, Seabourn cruise line, princess cruises, and Holland America Line. The corporation operates in over 100 countries and employs over 150,000 employees in its shoreside and shipboard operations, serving over its 13million customers. It looks forward to operating safely, legally, and with environmental protection in mind(Carnival Corporation & plc, 2020). This paper will look at a brief history of Carnival Corporation & plc, its competitors, industry position, recent developments in the industry, future directs, among other relevant elements.

A brief historical summary

Carnival Corporation & plc was established in 1972 by Ted Arison, the cruise industry pioneer, as Carnival Cruise Line. Carnival started with a singe secondhand ship and one-way fuel, but the enthusiasm of its proprietor, Arison, would change the company situation to become a legend in seafaring. Carnival experienced massive growth, and in 1987 the company had risen to become the world's largest popular cruise line. It was listed in the New Yolk stock exchange the same year, offering 20% of its common stock. This listing brought the much-needed capital for its expansion. In 1993, the company adopted its current name to distinguish it from its cruise line subsidiary. By the end of the 20th century, it has acquired six more cruise lines, including Cunard Line, Costa Cruises, Seabourn Cruise Line, Westours, Windsor Cruises, and Holland America Line (Yahoo, 2020). In 2003, it acquired P&O Princess Cruises plc though the new subsidiary would retain its name and the British shareholders. In 2007, Carnival sold off it's Windsor and Swan Hellenic Cruises. in 2015, China State Shipbuilding Corporation was formed from a joint venture between China Investment Corporation and Carnival Corporation. In 2018, the company invested in Japan's Port of Sasebo, which was due to open this year. Still, in June the same year, it acquired White Pass and Yukon Route railroad, port, and retail operations  (Carnival Corporation & plc, 2020).

A list of competitors

Carnival faces major competition from other global cruise industry players, including MSC Cruises, Norwegian Cruise Line in the UK, and Royal Caribbean Cruises Limited(RCCL) in North America. These four companies serve more than 83% of global cruise guests. Carnivore has a market capitalization of 10.7 billion dollars, a Norwegian cruise line with a capitalization of 5 billion dollars, and Royal Caribbean International with a market cap of 8 billion dollars. Other competitors include Celebrity Cruises and Azmara Cruises in the United States. Carnival also competes with global land-based vacation alternatives like resorts, vacation ownership properties, casinos, organized tours, theme parks, and hotels. One such competitor is Walt Disney Co., which has over 180,000 employees and a revenue of 71,982 million dollars as of the last 12 months (CNNMoney.com, 2020).

The company's position within the industry

Carnival Corporation & plc core competencies include differentiation, partnership through joint ventures, mergers and acquisitions, and international strategy. Through its differentiation strategy, it looks to offer a wide range of holiday vacations for customers to choose from. It introduces new destinations regularly, apart from offering internet and other communication infrastructure, shopping malls, and other products on board. Carnival has 11 cruise brands, having different demographic appeals to accommodate all cultures. Carnival is a strong brand in the cruise industry, owning a whopping 56.63% of the market share, which it uses to expand its addressable markets. It also adopts special advertising techniques based on the value proposition. The company has also harnessed the acquisition, joint venture, and merger strategies to expand its geographical coverage, increase passenger capacity, provide better customer experiences, and strengthen the brand portfolio. All the partnerships have greatly added to its competitiveness. The corporation's size has helped it use the economies of scale to reduce costs and gain competitive advantage (Carnival Corporation & plc, 2019).

Through the above strategies, the Carnival has kept its leading market position for a long time. Its revenues have been strong, with 2019 recording revenue of 20.8 billion dollars, higher than the 18.9 billion dollars figure the previous year. It has been expanding and penetrating the market very fast, establishing new destinations every year. Carnival has more than double of the main competitor, Royal Caribbean, ships. It paid a dividend of 1.4 billion dollars in the last year's financial year, indicating its healthy financial performance. However, Carnival reported a decrease in total revenue by (84.7%) in its second quarter of the year 2020 compared to the average competitors' decrease rate (66.87%). it has also seen its cost of operations go up with as high as 16% last year, threatening its competitiveness  (Yahoo, 2020)

Recent developments within the company/industry

The corporation shares are traded on both the London and the New Yolk Stock Exchanges. Carnival is the only group in the world to be included in both FTSE 100 and S&P 500 indices. The company has sold 30 ships since 2006. Last year saw the corporation achieve its 2020 sustainability goals and establish other goals to see it past 2020. In 2019, the corporation delivered four new ships with one of the new ships, Smeralda, becoming the second liquefied natural gas-powered ship globally. It also garnered in 2019 about 600 honors and awards. It also introduced a new position, Chief Ethics and Compliance Officer, and a new compliance committee to guide the compliance and ethics programs  (Carnival Corporation & plc, 2020).

The covid 19 outbreak in the first quarter of 2020 has significantly affected the water transportation services industry and the corporation. It has decreased the ability and desire for people to travel hence a decrease in cruise demand. The pandemic led to the cancellation of all cruise ship itineraries, with 55 of the corporation guest reported to have contracted and died from the deadly virus. This month, the corporation announced its intention to dispose of twelve percent of its global fleet, amounting to 18 ships. Also, Carnival has been forced to delay some of the projects, including two new ports on Grand Bahama and Little San Salvador. To aid the covid 19 response, Carnival, in May 2020, offered cruise ships to aid hospitals. The industry is also being highly affected by the unpredictability in fuel prices (Carnival Corporation & plc, 2020).

Future direction

Carnivore wishes to deliver 17 new ships in the period through 2025. it also looks to make substantial investments in existing ship enhancement programs to enrich the clients' vocational experiences and improve onboard product offerings. It also looks to increase its penetration in developing markets like Asia, more so China due to the government plan to support the cruise industry, expansion of international tourism, and the rising numbers of the middle class. The company also looks at reducing the intensity and improving the quality of carbon iv oxide from its operations by 40% relative to its 2008 baseline by 2030. it also seeks to minimize wastes generated from its shipboard activities by 5% of the 2016 baseline. The corporation also wishes to protect its employees and guests' security, safety, and health besides building a diverse and inclusive workplace and expanding its legal and ethical compliance and social responsibility (Carnival Corporation & plc, 2020).

The corporation is aware of the adverse events and uncertainties glaring its prospects. These uncertainties include hazardous incidents like natural disasters, healthcare crises such as covid 19, government restrictions, civil and political instability, increased regulations, cyber-attacks, changes in labor environment, foreign currency and fuel price fluctuations, increased competition, and changing customer demands. However, Carnival is taking in necessary measures to ensure its future predictability and profitability (Carnival Corporation & plc, 2020).

Others relevant elements

The corporation has endured multiple legal handles. In June last year, it was fined for violating an agreement entered with the US Department of justice in 2016 related to environmental incidents. It also has pending cases in French and New Yolk supreme courts and Australian maritime safety authority and maritime accident investigation branch. However, the company believes it has a strong argument standpoint that would not result in a major decision against its operations. The corporation also has a strong corporate social responsibility strategy. The company has been named one of the best employers/ best places to work for its employees' development, inclusion, and diversity pursuit. It has been running charitable and volunteer programs that look at developing better communities across the globe. It is also committed to ethical business conduct, joining forces with other companies to combat corruption in the industry  (Carnival Corporation & plc, 2020).

Conclusion

It is clear from the discussion that Carnival Corporation plc smart strategies have constantly put it ahead of the other corporations within the industry. The industry keeps changing; some new and existing players are in pursuit of the large pie held by Carnival and emerging markets. Its acquisition, merger, joint venture, differentiation, and international strategies are quite admirable and effective. Though the adverse conditions like the current pandemic have hit hard its operations, I am confident and strongly believes that Carnival Corporation is poised to expand its operations further and establish a more bright future.

References

Carnival Corporation & plc. (2019, November 30). Carnival Corporation & plc - FORM 10-K. https://www.carnivalcorp.com/static-files/ddd975ba-cef0-43fe-9bf9-bb4c376ed914

Carnival Corporation & plc. (2020, September 20). Carnival Corporation recognized for corporate social responsibility. https://www.carnivalcorporation.com/news-releases/news-release-details/carnival-corporation-recognized-corporate-social-responsibility

Carnival Corporation & plc. (2020, September 20). Vision, mission & history. https://www.carnivalcorp.com/corporate-information/mission-and-history

Carnival Corporation & plc. (2020, September 20). Carnival Corporation & plc 2019 Annual Report. https://www.carnivalcorp.com/static-files/9ba84dfd-b96a-486f-8617-34e49820077a

Carnival Corporation & plc. (2020, September 20). Recent Developments. https://www.carnivalcorp.com/media-center/news-releases

Carnival Corporation & plc. (2020, March 25). A message from the CEO. Carnival Sustainability 2020. https://carnivalsustainability.com/a-message-from-the-ceo

CNNMoney.com. (2020, September 20). CCL - Carnival Corp competitors. Business News - Latest Headlines on CNN Business - CNN. https://money.cnn.com/quote/competitors/competitors.html?symb=CCL

Yahoo. (2020, September 20). Carnival Corporation (CCL) company profile & facts. Yahoo Finance - Stock Market Live, Quotes, Business & Finance News. https://finance.yahoo.com/quote/CCL/profile?p=CCL