Harrah’s Big Database Gamble
HARRAH’S BIG DATABASE GAMBLE
BRIEF ABOUT THE CASE
Harrah’s is the world largest provider of branded casino entertainment; it has around 25 million customers (2001) 25 casino with 40,000 gambling machines in 12 states. For years it had been a fairly small gambling company but, by 2001, had emerged as the second largest in the industry. By the mid-1990s, the gambling Business was flourishing and it was difficult for Harrah’s to survive in the markets due to intense competition, so they came up with a strategy of introducing a customer relationship management (CRM) software which helps to know their customers exceptionally well. A CRM system coordinates all business processes for dealing with customers, which in Harrah’s case includes both gambling and hotel customers. .The overall system Harrah’s developed has been named WINet (Winner’s Information Network) .The heart of CRM strategy was customer loyalty program called TOTAL REWARDS .Harrah’s CRM-based strategy appears to be a great success. Harrah’s say it keeps the customer information confidential and that it is not out to exploit gamblers. However, opponents of the gambling industry have criticized Harrah’s use of customer data. Harrah’s claims the Total Rewards program actually gives these people rewards instead of encouraging them to gamble more. He Further clarified that All we used to know was how much money we made on each machine, but we couldn’t connect what kind of customer used them , but with the help of technology he could get all the data of the customers. ANALYSIS and INTEREPATATION
• Harrah’s uses an innovative strategy to survive in the market i.e. CRM Software • More focus on customer satisfaction and in turn gaining customer loyalty. • Harrah’s effective use of the technology helped him to grow his business.
• Different approach than his competitors to grow the profitability of the business • CRM Software
• Maintaining the Customer data Confidential
• Gambling business does not have a future, because the government laws can affect the business. • Criticism by Competitors against the use of customer data which would affect the brand value of the business. • From employees and staff perspective Difficult to adopt the corporate culture as the staff and employees had to focus on casino profit along with customer satisfaction.
• Technology up gradation can help them to maintain and grow their business
• Entry of new players in the gambling business
• Privacy Fears by customers
CASE STUDY QUESTIONS
1. Analyze Harrah's using the competitive forces and value chain models.
Harrah's is facing intense competition. This competition is coming from established competitors as well new players Customers have many options in terms of how, when, and where they gamble. Harrah's is using its new business strategy to create a new service, and catch its customers. Harrah’s new information system is having a strategic impact on its operations, sales and marketing, and service activities.
2. Describe Harrah's business model and business strategy. How do they differ From those other gambling companies?
Harrah's business strategy is a customer relationship management strategy. (CRM). CRM system coordinates all business process for dealing with customers. Harrah's uses its CRM software to identify and track its profitable customers. Harrah's Total Rewards program allows gathering information about its customer’s gender, age, location, games they like to play as well as reward its customers for the amount of time that they spend gambling at Harrah's casinos. Harrah's competition relies on fancy reward schemes, due to which Harrah’s is getting to know its customers by studying and analyzing their behavior....