Chapter 6. Chapter 6 Strategic Management Model Remote Industry Task Firm Functional Environmental...
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Example of Target Market Descriptors for Harrah’s Casinos Primary criteria used to describe target market Describe in detail the specifics for each criterion at left Preference for gaming and travel Since the late 1980s, gambling has grown considerably in the U.S., a large portion of it occurring while Americans are traveling. Seven percent of all U.S. domestic person-trips included gambling as trip activity in 1999, accounting for 72.8 million person-trips in total. Since 1994, the number of gambling trips by Americans has increased 20 percent. According to the Harrah ’ s Survey 2002, it is evident that support of casino gambling among U.S. house- holds is growing. Casino gambling industry attracted more than 52.3 million people (27% of adult population) making a total of 303 million visits to casinos in 2001, on par with visits to amusement and theme parks. Gambling is expected to gain in popularity this decade as casino properties expand and enhance their facilities and new casinos are opened. Travel Purpose According to the Travel Industry Association of America ’ s Profile of Travelers Who Participate in Gambling, 2000 Edition, like most travelers in the U.S., a majority of gambling is for leisure purposes (83%). Thirteen percent of gambling travelers cite business as the main purpose of the trip. Gambling travelers are also more likely than U.S. travelers overall to travel by air (24% vs. 18%), include a stay at a hotel, motel, or bed and breakfast establishment (76% vs. 52%), and have higher trip spending levels. Age Americans ages 51 to 65 with more discretionary time and income than others are more likely to have gambled at a casino in the last 12 months (year 2001) than seniors and those in younger age groups. Compared to the whole U.S. population, the median household income for casino gamblers is 20% higher than the national average – U.S. population ($41,343), U.S. casino gamblers ($49,753). Income It is likely that Americans with higher incomes visit casinos more often than those with low-income levels. Thirty-five percent of Americans with annual household income levels above $95,000 gamble in casinos, while only 22% of adults in homes earning less than $35,000 are casino players. Occupation/ Education According to the Harrah ’ s Survey 2002, casino players are more likely to hold white-collar jobs. Also, casino gamblers are slightly better educated. Gender More women are involved in gambling now than ever before. Women more than men like to try their luck at slot machines and other electronic games (80% vs. 66%) according to the Harrah ’ s Survey 2002.
Transcript of Chapter 6. Chapter 6 Strategic Management Model Remote Industry Task Firm Functional Environmental...
Chapter 6
Chapter 6 Strategic Management Model
Remote
Industry
Task
Firm
Functional
Environmental Events
Example of Target Market Descriptors for Harrah’s Casinos
Primary criteriaused to describe
target marketDescribe in detail the specifics for each criterion at left
Preference for gaming and travel
Since the late 1980s, gambling has grown considerably in the U.S., a large portion of it occurring while Americans are traveling. Seven percent of all U.S. domestic person-trips included gambling as trip activity in 1999, accounting for 72.8 million person-trips in total. Since 1994, the number of gambling trips by Americans has increased 20 percent. According to the Harrah’s Survey 2002, it is evident that support of casino gambling among U.S. house-holds is growing. Casino gambling industry attracted more than 52.3 million people (27% of adult population) making a total of 303 million visits to casinos in 2001, on par with visits to amusement and theme parks. Gambling is expected to gain in popularity this decade as casino properties expand and enhance their facilities and new casinos are opened.
Travel Purpose
According to the Travel Industry Association of America’s Profile of Travelers Who Participate in Gambling, 2000 Edition, like most travelers in the U.S., a majority of gambling is for leisure purposes (83%). Thirteen percent of gambling travelers cite business as the main purpose of the trip. Gambling travelers are also more likely than U.S. travelers overall to travel by air (24% vs. 18%), include a stay at a hotel, motel, or bed and breakfast establishment (76% vs. 52%), and have higher trip spending levels.
Age
Americans ages 51 to 65 with more discretionary time and income than others are more likely to have gambled at a casino in the last 12 months (year 2001) than seniors and those in younger age groups. Compared to the whole U.S. population, the median household income for casino gamblers is 20% higher than the national average – U.S. population ($41,343), U.S. casino gamblers ($49,753).
IncomeIt is likely that Americans with higher incomes visit casinos more often than those with low-income levels. Thirty-five percent of Americans with annual household income levels above $95,000 gamble in casinos, while only 22% of adults in homes earning less than $35,000 are casino players.
Occupation/ Education
According to the Harrah’s Survey 2002, casino players are more likely to hold white-collar jobs. Also, casino gamblers are slightly better educated.
Gender More women are involved in gambling now than ever before. Women more than men like to try their luck at slot machines and other electronic games (80% vs. 66%) according to the Harrah’s Survey 2002.
Variables Influencing the Demand Curve
Quantity
Price
Critical success factors of the multinationallodging industry
1985-1994
Customer Products and Services Frequent guest programs Special service for frequent guests Amenities In-room sales and entertainment Business services
Technology Development Technology innovation Database management Computer reservation systems
Marketing Efforts Branding Niche marketing and advertising Pricing tactics Direct to consumer marketing
Market Expansion International Expansion Strategic alliances Franchising and management fee
Operation Management Cost containment Core business management Service quality management Travel agency valuation Employees as assets Conservation/ecology programs
1995-1999 Rapid information technology development International expansion and market cooperation Relationship management Customer-oriented products and services development Structure reengineering New marketing initiatives and campaigns Quality control Social awareness and environmental protection
CSF
Loyalty ProgramIndustry leader Improving Trouble putting
a good one together
Does not feel the need for
one
OK
LocationFeels it is the
leaderNo where near
the market presence
Growing but a long way
to go
Leading the luxury segment
Strong market presence
Reservation systemOnce a leader now keeping
pace only
Investing heavily to be-
come the leader
Seeking to gain strength
OK OK, but not a market leader
Revenue Management System
Technology utilization
In-room amenities
Brand strength
Market presence
Brand portfolio
Operating management system
Industry strategic group comparison on lodging industry critical success factors
Key Value Drivers Affecting Operational Cash Flow Variance in the Casual Theme Restaurant Sector
Unanticipated Effects on Industry Operating
Performance
Economic Environment
Index of Operating Cash
Flow per Unit(IOCFPU)
CPISEA t-1
PPI t-3
– 8.893 3.557
Commodity
EMPPP t-2 6.712Labor Market
PPILEFE t-3 – 13.423 Inflation
R2=67%
Sensitivity
Comparative and Longitudinal Analysis of Major Multinational Hotel Companies
1999 2000 2001 2002 2003 Av.3yrs Av.5yrs
Hilton Marriott Accor
Return on Invested Capital
-16-13-10-7-4-1258
11141720
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Harrah's Entertainment Mandalay Resort GroupMGM Grand Park Place
Graphical Comparison of Return on Invested Capital
Analysis of Competitors
