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Harrahs Entertainment Inc.s Strategic Management
This is a report on Harrahs Entertainment Inc. and its strategic position on the market. The company owns casinos, hotels, and golf courses. Historically, Harrahs Entertainment Inc. sought to compete against the industrys leaders by increasing its presence in foreign markets. The companys mission states: Each of our brands will be the overwhelming first choice for casino entertainment of its targeted customers (Harrahs Home Page 2009). The current strategy of the company is to building loyalty and value with its customers and introducing innovative technology and solutions into practice. The company tries to innovate, creating unique and outstanding solutions for customers all over the world. Great service and excellence are the main priorities of Harrahs Entertainment Inc.
Company Profile
In recent years, Harrahs Entertainment Inc. experienced a need to innovate and invest in new technologies and gaming solutions. The current crisis creates some problems for Harrahs Entertainment Inc. as fewer customers visit online gaming sites and traditional casinos around the country. Harrahs Entertainment Inc. has unique HR resources which help it compete on a global scale. Harrahs Entertainment Inc. follows effective marketing strategies in order to create and sustain a unique brand image of the company. R&D groups are charged with developing gaming services and, as such, are typically concerned with innovative issues about how the game performs. The company values diversity and states that: Building Communities the Harrahs Way is the blueprint of our commitment to support and invest in those communities (Harrahs Home page 2009).
In 2007, the companys revenue was $ 10825.20 M, and it achieved a profit growth 11.90% a year. The main strengths for Harrahs Entertainment Inc. are strong brand equity and country of origin image, innovative approach to the gaming industry, and unique vision of a game appealing to mass customers. The main weaknesses are a lack of flexibility in value proposition and product differentiation (the company will have to focus on price). Also, a lack of patient protection and a high-cost structure will have an impact on gaming. The opportunities involve positive economic conditions and market growth. The gaming sector can gain a strong reputation among customers. An unfulfilled customer need and loosening of regulations will help the company to enter this new market. The current strategy, based on innovations and technological improvements, will help Harrahs Entertainment Inc. to obtain a strong market position and compete with entertainment companies. The threats are competition from national and international companies specialized in leisure activities. Substitute products like racing will have a dominant impact on the company and its growth (Brown and Eisenhardt 1998).
Environmental Issues
The business goals of Harrahs Entertainment Inc. are to deliver the best quality and innovative solutions to the end consumer, expand internationally and enter new markets. For Harrahs Entertainment Inc., branding is an effort to make products more meaningful to consumers. The external environment influences the companys profitability and creates additional threats caused by economic decline and the desire of people to save money on food and shelter. Still, the economic situation in America is marked by low inflation rates and high income per capita. Thus, in Asia and Africa, liberalization and a high level of investments can be considered as opportunities for the company to enter this country. There are also the necessities of making long-run capital commitments, meeting the requirements of joint ventures with nationals, and the imposition of special income taxes and import duties on necessities, as well as differences in social legislation, location considerations, protection of home products, governmental attitudes and control, laws affecting labels and standards, transportation and communications problems, and the risks of inflation, currency devaluation, and expropriation. All these create many additional uncertainties for those encountered in national marketing. The main competitors of Harrahs Entertainment Inc. are Boyd Gaming, MGM Mirage, and Trump Resorts. Being complex companies, these competitors determine their strategies based on a variety of environmental and brand factors that are not only related to the companys specific assets but also to structural, cultural, and economic dynamics elements. The key environmental treads involve legal changes and increased taxation of the casinos, additional tension on online gaming and gambling industries (Daniels et al. 2006).
Problem Statement
The current need of Harrahs Entertainment Inc. is to change its old technologies and old-fashioned ways of gaming and introduce innovative and more attractive games available for gamers through the Internet and in casinos.
Alternative Solutions
The main industry forces for Harrahs are technology and innovations. Technological factors involve the Internet access and development of telecommunication infrastructure, new methods of doing business, and information availability. The first solution is to increase the online presence of the company and create a separate division for online games. This strategy will help Harrahs to gain market share and compete with other entertainment companies. Such factors as continued economic growth, increased disposable income, dynamic domestic and foreign competition, accelerating technology, automation, population decentralization, expansion, and innovation will spur the appearance of this new marketing form. The application of computer technology and the use of new analytical techniques in the gaming process has added greatly to the efficacy of planning activities. Such tools as critical paths, input-output analysis, payoff matrices, decision trees, linear programming, and simulations are used extensively in marketing-planning operations.
The second solution is to start an aggressive advertising campaign aimed to attract customers and show them how to gain money in difficult economic times. The main strategic options are investments in advertising, international expansion and improved quality, increased internal capacities. Harrahs should pay special attention to competition and economic changes such as oil prices and inflation rates. For Harrahs, competitive strategies play a central role in the buyer learning process. The competitive strategies brands are pursuing create buyer knowledge. Based on this experience, buyers learn three key thingshow to perceive brands, how to value the differences among brands, and how to make a choice among the alternatives (Daniels et al. 2006).
The third alternative for Harrahs Entertainment Inc. is to expand its presence in Asian countries and attract this target audience. This is the most unfavorable solution as it would require huge investments and financial support for advertising and promotion campaigns. This target audience can be reached via the Internet and online gaming.
Solution
The best solution for Harrahs Entertainment Inc. is to increase its online presence and create a separate division of this sector. In order to support the national economy, the government prevents price rises or even to rolls them back in basic industries such as steel. Governmental involvement seems to relate price increases to the impact on inflation and increased productivity. Government has the influence to block or roll back price increases. It is assumed that innovations and low prices of online games are the key factors of success in the entertainment industry. Though customers link value innovation to technological solutions, strategic innovations can also be a vital source of innovation. The least obvious case of consumer satisfaction is when games are changing. A lack of innovation in the gaming industry and the absence of new feelings and emotions lead the company to no buyer learning occurring.
I would recommend Harrahs Entertainment Inc. to expand online and invest heavily in R&D. in the Internet gaming industry; product leadership means creating a competitive edge through new games in the marketplace. Harrahs Entertainment Inc. thus should focus on constant changes and have a quick product development process. Harrahs Entertainment Inc. should be a leader in product launch and should pursue an integrated product development process. Harrahs Entertainment Inc. may also consider partnerships with other Internet-based companies as other ways to achieve product and market leadership. In addition, Harrahs Entertainment Inc. should also leverage its current product line and create synergy, making the new games globally competitive and attractive. These changes lead us to rethink the managing of new games in the Information age (Gardiner, 2005).
Implementation of the proposed plan will take four months and requires limited financial investments and support.
The main problems at this stage will be increased legal on online gaming gambling industries and changing legislation.
References
Brown, S.L., Eisenhardt, K. M. (1998). Competing on the Edge: Strategy as Structured Chaos. Harvard Business School Press.
Daniels, J., Radebaugh, L., Sullivan, D. (2006). International Business: Environments and Operations. Prentice Hall.
Gardiner, P. (2005). Project Management: A Strategic Planning Approach. Palgrave Macmillan.
Harrahs Entertainment INC. Home Page (2099). Available at: www.harrahs.com.
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