Developing an efficient strategy has been effective for an organisation to gain competitive and market advantage. The business and corporate strategies are developed by the companies to meet their objectives like increasing market share, customer base and others (Furrer, 2016). In addition, undertaking any particular strategy for the growth of the business requires thorough market research and understanding elements of both factors of internal and external of the business surroundings (Kew and Stredwick, 2005). In this current report, the Carnival Corporation has been selected as a case company, which is considered as the biggest cruise ships operator around the world and has above hundred equipped vessels. This specific report will aim to identify the possible strategies at the corporate and business levels, since that could help the company to enhance their business performance and increase more market exposure. Based on the data about the firm and the industry in which the company operates along with using third party sources, the concepts underpinning business strategy and corporate strategy will be analysed. It would be useful in selecting the appropriate strategy that can support the business model of Carnival Corporation. Moreover, a reference to any relevant model would be made for critically analysing the strategies that will be proposed in the study. On the other hand, the report will be focusing on evaluating the strategies which could be most effective for the company that would provide most beneficial results in terms of profit, growth and customer base. In the later part of the report, the recommendation would be provided on the basis of the evaluation of strategies related to corporate and business.
According to Lynch (2007), corporate strategy is an overall direction and scope of an organisation to align its number of business operations to attain corporate or business goals. It has also been pointed that in order to succeed in the long run, the companies are required to develop a better corporate strategy (Teece, 2010). There are a number of corporate strategies adopted by the firms based on their scale and size. Therefore, in context to Carnival Corporation, corporate strategy can be illustrated through Ansoff Matrix.
Product Development: It would be effective if new products are developed by the company for targeting the existing market segments. This strategy could be useful in revitalizing the business and the company would be able to respond to the needs of the customers as they change (Freng Svendsen et al., 2011). Therefore, Carnival Corporation can consider developing and offering products or services like virtual balconies in cruise ships, magical porthole and skydiving simulator. However, developing a new products or services can be a high risk process for the company as it is mentioned that around fifty to eighty percent of new programs of the companies fail (Kumar and Phrommathed, 2006). Moreover, this strategy could be costly as the company might have to incur huge amount of capital in Research & Development which can impact their cash balance.
Market Development: Under this strategy, the firm can grow its business to new market segments by targeting its existing products/services (Shaw, 2012). Carnival Corporation can apply this strategy to access new geographical markets; can adopt different pricing policy and new distribution channels to attract the targeted customers. Therefore, the company can consider long-term expansion in Asian Vacation markets, which can be effective in ensuring growth and gaining competitive advantage on a global scale. On the other hand, there could risk as well in adopting market development strategy. The company might face economical and political risks that can upset it in accessing the new market (Doole and Lowe, 2008).
Market Penetration: The organisations seek to attain the growth with existing products and services in their current market segments in order to increase the market share. It is the least risky strategy, as it leverages most of the existing capabilities and resources of the firm (Evans, 2015). Under this strategy, Carnival Corporation can further exploit its products and services without necessarily transforming the product or the product outlook. However, the company could be facing challenges by using this strategy. The organisation might have to incur a huge capital for using promotional methods and setting different pricing policies which can create a cash problem for the company in developing required product or services (H. Meek and R. Meek, 2003). Also, the company might not be successful and could lose share to other similar firms.
Diversification: According to this strategy, the firm can grow by diversifying into new businesses through introducing new products or services to the new markets (Rao and Klein, 2015). This strategy can be effective in gaining a foothold in an attractive industry and could be also useful in reducing the overall business portfolio risk (Beamish and Ashford, 2006). The company, Carnival Corporation, can diversify itself into restaurant chain in new markets like Mauritius, India, etc along with operating in cruise lines. It can increase the brand value of the company and could also raise the total income for the businesses (Proctor, 2014). However, this strategy can be highly risky, if the company fails in making the right diversification strategy (Gilligan and Wilson, 2012).
As the tourism industry of USA is steadily growing and Carnival Corporation is able to generate a good return from business of cruise lines, the company can consider diversification strategy to generate a higher value and increase the growth rate.
It is cited by Campbell, Edgar and Stonehouse (2011), that business strategy prescribes the business plans undertaken by the companies for achieving their goals and sustains and improves their position in the industry.
