Case Study Description of MGM Resorts International: Accounts Receivable
An analyst's The manager at a local investment firm had been reading through a recent report regarding MGM Resorts International when he noticed a drop in the company's bad debt expense estimate for 2016. He had asked an analyst at the firm to investigate. The manager knew a decrease like this could indicate an improvement in collectability from customers, but he also knew the expense was subject to estimates from management. He needed to know whether to interpret the decline as a good sign or not. This case is intended for use in an introductory financial accounting course to demonstrate the impact of accounts receivable on financial statements.
Swot Analysis of "MGM Resorts International: Accounts Receivable" written by Luann J. Lynch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Receivable Mgm facing as an external strategic factors. Some of the topics covered in MGM Resorts International: Accounts Receivable case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the MGM Resorts International: Accounts Receivable casestudy better are - – supply chains are disrupted by pandemic , geopolitical disruptions, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
wage bills are increasing, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of MGM Resorts International: Accounts Receivable
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MGM Resorts International: Accounts Receivable case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Receivable Mgm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Receivable Mgm 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 MGM Resorts International: Accounts Receivable can be done for the following purposes –
1. Strategic planning using facts provided in MGM Resorts International: Accounts Receivable case study
2. Improving business portfolio management of Receivable Mgm
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Receivable Mgm
Strengths MGM Resorts International: Accounts Receivable | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Receivable Mgm in MGM Resorts International: Accounts Receivable Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Receivable Mgm in the sector have low bargaining power. MGM Resorts International: Accounts Receivable has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Receivable Mgm to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Receivable Mgm 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 Luann J. Lynch 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.
Ability to lead change in Finance & Accounting field
– Receivable Mgm is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Receivable Mgm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Receivable Mgm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Receivable Mgm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Receivable Mgm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Receivable Mgm are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Receivable Mgm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Receivable Mgm 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.
Sustainable margins compare to other players in Finance & Accounting industry
– MGM Resorts International: Accounts Receivable firm has clearly differentiated products in the market place. This has enabled Receivable Mgm to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Receivable Mgm to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Receivable Mgm 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 MGM Resorts International: Accounts Receivable HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Receivable Mgm is one of the leading recruiters in the industry. Managers in the MGM Resorts International: Accounts Receivable are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Receivable Mgm 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 Receivable Mgm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MGM Resorts International: Accounts Receivable Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the MGM Resorts International: Accounts Receivable Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses MGM Resorts International: Accounts Receivable | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MGM Resorts International: Accounts Receivable are -
Skills based hiring
– The stress on hiring functional specialists at Receivable Mgm 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.
No frontier risks strategy
– After analyzing the HBR case study MGM Resorts International: Accounts Receivable, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the MGM Resorts International: Accounts Receivable 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 Receivable Mgm has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Receivable Mgm, firm in the HBR case study MGM Resorts International: Accounts Receivable needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Luann J. Lynch suggests that, Receivable Mgm 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.
High operating costs
– Compare to the competitors, firm in the HBR case study MGM Resorts International: Accounts Receivable 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 Receivable Mgm 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Receivable Mgm is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Receivable Mgm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Receivable Mgm to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Receivable Mgm has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - MGM Resorts International: Accounts Receivable should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Receivable Mgm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MGM Resorts International: Accounts Receivable can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Receivable Mgm 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.
Lack of clear differentiation of Receivable Mgm products
– To increase the profitability and margins on the products, Receivable Mgm needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities MGM Resorts International: Accounts Receivable | 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 MGM Resorts International: Accounts Receivable are -
Learning at scale
– Online learning technologies has now opened space for Receivable Mgm to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Receivable Mgm to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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. Receivable Mgm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Receivable Mgm is facing challenges because of the dominance of functional experts in the organization. MGM Resorts International: Accounts Receivable 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.
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 Receivable Mgm in the consumer business. Now Receivable Mgm can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Receivable Mgm to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Receivable Mgm to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Receivable Mgm can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Loyalty marketing
– Receivable Mgm has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Receivable Mgm to increase its market reach. Receivable Mgm 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.
Creating value in data economy
– The success of analytics program of Receivable Mgm has opened avenues for new revenue streams for the organization in the industry. This can help Receivable Mgm to build a more holistic ecosystem as suggested in the MGM Resorts International: Accounts Receivable case study. Receivable Mgm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Receivable Mgm 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, MGM Resorts International: Accounts Receivable, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Receivable Mgm can use these opportunities to build new business models that can help the communities that Receivable Mgm operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Receivable Mgm 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 Finance & Accounting segment.
Threats MGM Resorts International: Accounts Receivable External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MGM Resorts International: Accounts Receivable are -
Technology acceleration in Forth Industrial Revolution
– Receivable Mgm has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Receivable Mgm needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Receivable Mgm business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Receivable Mgm 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Receivable Mgm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Receivable Mgm 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.
Shortening product life cycle
– it is one of the major threat that Receivable Mgm is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Receivable Mgm will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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 Receivable Mgm.
Environmental challenges
– Receivable Mgm needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Receivable Mgm can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MGM Resorts International: Accounts Receivable, Receivable Mgm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
High dependence on third party suppliers
– Receivable Mgm high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of MGM Resorts International: Accounts Receivable 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 MGM Resorts International: Accounts Receivable 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 MGM Resorts International: Accounts Receivable 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 MGM Resorts International: Accounts Receivable 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 MGM Resorts International: Accounts Receivable 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 Receivable Mgm needs to make to build a sustainable competitive advantage.
