Case Study Description of Promus Companies: Harrah's Casinos
Provides an overview of the U.S. gambling industry and the rapid expansion of gambling beyond Nevada and New Jersey since 1988. Focuses on Harrah's, a traditional top-tier casino company, which was the first to aggressively expand into emerging gaming markets and that needs to consider how best to sustain its competitive position.
Swot Analysis of "Promus Companies: Harrah's Casinos" written by Stephen P. Bradley, Takia Mahmood includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Harrah's Gambling facing as an external strategic factors. Some of the topics covered in Promus Companies: Harrah's Casinos case study are - Strategic Management Strategies, Emerging markets, Growth strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Promus Companies: Harrah's Casinos casestudy better are - – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Promus Companies: Harrah's Casinos
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Promus Companies: Harrah's Casinos case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Harrah's Gambling, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Harrah's Gambling operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Promus Companies: Harrah's Casinos can be done for the following purposes –
1. Strategic planning using facts provided in Promus Companies: Harrah's Casinos case study
2. Improving business portfolio management of Harrah's Gambling
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Harrah's Gambling
Strengths Promus Companies: Harrah's Casinos | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Harrah's Gambling in Promus Companies: Harrah's Casinos Harvard Business Review case study are -
Ability to recruit top talent
– Harrah's Gambling is one of the leading recruiters in the industry. Managers in the Promus Companies: Harrah's Casinos are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Harrah's Gambling has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Harrah's Gambling to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Harrah's Gambling in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Harrah's Gambling is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Harrah's Gambling is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Promus Companies: Harrah's Casinos Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Harrah's Gambling is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stephen P. Bradley, Takia Mahmood can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Strategy & Execution industry
– Promus Companies: Harrah's Casinos firm has clearly differentiated products in the market place. This has enabled Harrah's Gambling to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Harrah's Gambling to invest into research and development (R&D) and innovation.
Organizational Resilience of Harrah's Gambling
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Harrah's Gambling does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Harrah's Gambling has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Harrah's Gambling has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Harrah's Gambling is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Harrah's Gambling in the sector have low bargaining power. Promus Companies: Harrah's Casinos has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Harrah's Gambling to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Harrah's Gambling has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Promus Companies: Harrah's Casinos HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Harrah's Gambling digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Harrah's Gambling has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Promus Companies: Harrah's Casinos | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Promus Companies: Harrah's Casinos are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Promus Companies: Harrah's Casinos, is just above the industry average. Harrah's Gambling needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Harrah's Gambling has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Promus Companies: Harrah's Casinos, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen P. Bradley, Takia Mahmood suggests that, Harrah's Gambling is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Harrah's Gambling, firm in the HBR case study Promus Companies: Harrah's Casinos needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Promus Companies: Harrah's Casinos HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Harrah's Gambling has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Promus Companies: Harrah's Casinos that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Promus Companies: Harrah's Casinos can leverage the sales team experience to cultivate customer relationships as Harrah's Gambling is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Promus Companies: Harrah's Casinos has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Harrah's Gambling 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Harrah's Gambling has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Harrah's Gambling has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Promus Companies: Harrah's Casinos HBR case study mentions - Harrah's Gambling takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Promus Companies: Harrah's Casinos | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Promus Companies: Harrah's Casinos are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Harrah's Gambling can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Harrah's Gambling in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Harrah's Gambling to increase its market reach. Harrah's Gambling will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Harrah's Gambling can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Leveraging digital technologies
– Harrah's Gambling can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Harrah's Gambling can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Promus Companies: Harrah's Casinos suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Harrah's Gambling can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Harrah's Gambling can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Harrah's Gambling has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Promus Companies: Harrah's Casinos - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Harrah's Gambling to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Harrah's Gambling can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Promus Companies: Harrah's Casinos, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Harrah's Gambling in the consumer business. Now Harrah's Gambling can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Harrah's Gambling can use these opportunities to build new business models that can help the communities that Harrah's Gambling operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Harrah's Gambling is facing challenges because of the dominance of functional experts in the organization. Promus Companies: Harrah's Casinos case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Promus Companies: Harrah's Casinos External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Promus Companies: Harrah's Casinos are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Harrah's Gambling.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Harrah's Gambling with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Harrah's Gambling is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Harrah's Gambling in the Strategy & Execution sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Harrah's Gambling business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Harrah's Gambling can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Harrah's Gambling needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Harrah's Gambling can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Promus Companies: Harrah's Casinos, Harrah's Gambling may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Harrah's Gambling
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Harrah's Gambling.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Harrah's Gambling in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Harrah's Gambling demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Promus Companies: Harrah's Casinos Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Promus Companies: Harrah's Casinos needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Promus Companies: Harrah's Casinos is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Promus Companies: Harrah's Casinos is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Promus Companies: Harrah's Casinos is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Harrah's Gambling needs to make to build a sustainable competitive advantage.