Mgm Resorts International Case Study

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Case Study: MGM Resorts International
27 February 2013

Table of Contents

Key Dates and General History 3-5
Environmental Analysis 5-7
Porter Analysis 7-9
Marketing Strategy 9-12
Competitor Analysis (SWOT) 12-18
Company Analysis (SWOT) 18-20
Financial Analysis 21-22
Future Trends 22-23
Recommendations 23-25
Conclusion 25-26
References 27-28

Key Dates and General History
MGM Resorts International was incorporated in Delaware on January 29, 1986 as MGM Grand, Incorporated, a subsidiary of Kirk Kerkorian's Tracinda Corporation. The company's first venture was MGM Grand Air which was launched in September 1987 as a luxury airline which offered service between New York and Los Angeles. MGM Grand Air was later sold for a note receivable totaling approximately $14,325,000 in 1994. Throughout its history, MGM Resorts International acquired, constructed, and sold many properties and has made big business moves to expand their business. In the following paragraphs, we will discuss some of these moves MGM has made over the years. The 80's

In 1988, MGM acquired the Desert Inn and Sands Casinos, but the Sands was quickly sold the following year. In September 1989, MGM announced plans to build a 700-million dollar Hollywood-themed complex, which would include a 4,000-room hotel and a theme park. The 90's

Construction on the Hollywood-themed complex, which included the MGM Grand Las Vegas and the MGM Grand Adventures, began in 1991 and finished up and opened it's doors in 1993. In 1995, MGM bought Diamond Beach Hotel and Casino in Darwin, Australia which was renamed MGM Grand Darwin. MGM later sold the subsidiaries that owned and operated the MGM Grand Darwin in 2004. A joint venture between MGM and Primadonna Resorts led to the construction of New York-New York Hotel and Casino which was completed and opened in 1997. MGM looked to further expand it's business and announced plans to develop fifteen properties in conjunction with Tsogo Sun in South Africa. The first casino in South Africa opened in 1998 and three more quickly followed, but MGM decided to sell out its interest in the properties to Tsogo Sun in 2001. MGM continued to look outside of Las Vegas, and when a bid on a gaming license in Michigan was approved, MGM opened MGM Grand Detroit in 1999. MGM's last big move in the 90's was their decision to buy Primadonna outright. This move, which was finalized in March of 1999, gave MGM ownership of three more casinos, two golf courses and most importantly full control of New York-New York. The 00's

After buying Primadonna outright and gaining full control of New York-New York, MGM did not slow down. In May of 2000, MGM reached a deal with Mirage Resorts and bought the company, giving MGM ownership of the Mirage, Treasure Island, Bellagio, Boardwalk, Golden Nugget Casinos in Las Vegas, Golden Nugget in Laughlin, the Beau Rivage in Mississippi, a half share of the Monte Carlo, and a half stake in Borgata. Borgata was a planned casino in Atlantic City, which would eventually open its doors in 2003. In August of 2000, MGM Grand, Incorporated changed its name to MGM Mirage. In 2004, MGM decided to sell its two Golden Nugget casinos as well as the MGM Grand Darwin, which was previously mentioned, but immediately began plans to acquire one of its major competitors, Mandalay Resort Group. Negotiations continued throughout 2004 and in April 2005, MGM officially acquired Mandalay Resort Group. Also in 2004, MGM announced its plans to construct the CityCenter, which would include hotels, casinos, condominiums, retail and entertainment. MGM later agreed to form a 50/50 joint venture with Dubai World for the CityCenter development. In December of 2007, MGM opened its first...
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