Case 2: Wynn Resort
SWOT of Company
* Steve Wynn * experienced management team * premiere spot on Las Vegas strip, and home to the only golf course * strategic development of its product - luxury, high-end product, high brand value| * complete dependance on Steve Wynn * focus on high-end customers| Opportunities| Threats|
* legalization of gambling in US and abroad * holder of one of fours licenses in Macau * increased social acceptance of gambling * demographic changes (aging population, who are healty and wealthy) * focus of competitors away from high-end market in US * legal changes around the globe similar to recent changes in Macau * aim to turn Macau into destination of tourists * legal opportunity from concession on Macau * decreased restrictions on travel and currency movement between China and Macau| * Wynn leaves for any reason * differing social norms, social and demographic in US and abroad * expiration of concession in Macau in 2017, and Macau government able to take control over casion at any time * possible more concessions granted to operate in Macau * unfavorable political, regulatory and economic environment development in Macau * emerging market risk * limited freedom of operations and creativity * increased competition locally and abroad (both for customers and for employees) * not able to collect its debts in Macau| The SWOT above and information from the case study leads to the formulation of the respective problem the Wynn Resort if facing: How to proceed further to maintain the competitive advantage and succes of the company? The following alternative strategies are available to the company: 1) Do nothing and continue the same - the same product (service), the same markets 2) Focusing on current high-end resorts and markets and expanding its high-end resorts into new markets 3) Expansion into middle-class segment (development of middle class product/service)
Pros for „Do nothing” strategy are that company does not have to invest additional resources to develop its business and new opportunities. Furthermore, it does not take on extra risk related to developing new products or new markets. However, this strategy involves several cons as well. Firstly, the competition is growing and getting more intensive, and competitors are not sitting still. Although the company is well positioned in high-end market, has gained stable reputation and client base, they still have to keep developing to keep up with competition. Furthermore, the company will not take chance of advantageous external obstacles (such as changing demographic and social trends, legal changes around the world, etc.), while other competitors will do that. And doing nothing might be especiall dangerous while operating in emerging market (Macau), as new competitors will for sure arise to Macau resort, why company has to keep developing to keep up with competitive pressure.
Pros of this strategy are that company will keep making use of one of their competitive advantages - they are experienced in offering high value service (product) to high-end market, they have established well known brand, and they know how to do it. Now they will simply exnted this know-how to other markets. They will also spread the risk over several geogrpahic regions. Furthermore, the income is growing also abroad, the legal environment is changing, they have already established their presence in Chinese (Asian market) with Macau resort, they are also having first mover advantage in Macau, therefore, from this point of view the external environment presents some good opportunities to the company. However, this strategy also has several drawbacks. Furthermore, as competition is increasing around the world, expanding to new markets will allow to cope with this competition, as well as probably make use of first mover advantage...