Carnival Porter 5 Forces
CARNIVAL CORPORATION & PLC PORTER’S 5 FORCES
Porter’s 5 forces model allows to analyse the factors outside the Cruise industry that influence the nature of Carnival competition within it, the forces inside the Cruise industry that influence the way in which Carnival compete, and so the company’s likely profitability. With an understanding of where power lies, Carnival can take advantages of a situation of strength, improve a situation of weakness and avoid taking wrong strategies. Porter has identified five competitive forces that shape every industry and every market: bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes and rivalry among competitors. A sixth element has also been added to acknowledge others stakeholders such as employees and shareholders. (See graph)
Bargaining power of suppliers. HIGH
Suppliers for Carnival include travel agency, fuel, food and beverages, hotel and restaurant supplies, port facility utilization and dry-docking, repairs and maintenance, communication services and advertising. Travel agencies held a strong position as they are an important source of Carnival’s success and provide a massive amount of customers supplied. Without the travel agencies the company would lose a significant volume of customers and the decrease in profitability will be inevitable.
The supply of fuel is another element that increase the power of supplier, the fuel is a consolidated industry and can dictate the cost of oil; even if the company try to hedged the price of fuel oil it can’t limited or have an influence on the price neither avoid to buy it.
As the dimension of some of the Carnival’s ships doesn’t allow it to attract in any single port, the power of the limited ports where the company can attract its big ships is high. The port facility utilization is an important factor in the business of the company as it allow the company to increase the ports at call and
Porter’s 5 forces model allows to analyse the factors outside the Cruise industry that influence the nature of Carnival competition within it, the forces inside the Cruise industry that influence the way in which Carnival compete, and so the company’s likely profitability. With an understanding of where power lies, Carnival can take advantages of a situation of strength, improve a situation of weakness and avoid taking wrong strategies. Porter has identified five competitive forces that shape every industry and every market: bargaining power of suppliers, bargaining power of buyers, threat of new entrants, threat of substitutes and rivalry among competitors. A sixth element has also been added to acknowledge others stakeholders such as employees and shareholders. (See graph)
Bargaining power of suppliers. HIGH
Suppliers for Carnival include travel agency, fuel, food and beverages, hotel and restaurant supplies, port facility utilization and dry-docking, repairs and maintenance, communication services and advertising. Travel agencies held a strong position as they are an important source of Carnival’s success and provide a massive amount of customers supplied. Without the travel agencies the company would lose a significant volume of customers and the decrease in profitability will be inevitable.
The supply of fuel is another element that increase the power of supplier, the fuel is a consolidated industry and can dictate the cost of oil; even if the company try to hedged the price of fuel oil it can’t limited or have an influence on the price neither avoid to buy it.
As the dimension of some of the Carnival’s ships doesn’t allow it to attract in any single port, the power of the limited ports where the company can attract its big ships is high. The port facility utilization is an important factor in the business of the company as it allow the company to increase the ports at call and