Inustry Competitor Analysis-Casino Hotel

Topics: Las Vegas Strip, Las Vegas Sands, Wynn Las Vegas Pages: 23 (7808 words) Published: March 1, 2010
Executive Summary

The center of our industry and competitor analysis research is MGM Mirage, the second largest casino hotel operator in the world with $7.2 billion in revenues in 2008. The only company that surpasses MGM Mirage by revenue and scale is Harrah’s Entertainment Inc. with $10.8 billion in revenues in 2008. Other competitors that should be considered are Las Vegas Sands Corp. and Wynn Resorts Ltd with respectively $1.7 and almost $1 billion in revenues in 2008.

Our group focused on researching the degree of threat and the likely future competitive moves that Harrah’s Entertainment, Las Vegas Sands Corp. and Wynn Resorts Ltd will undertake in short (next 3-6 months) and long term (next 1-3 years). In order to be able to consider the competitors’ degree of threat and future moves we completed a pair-wise two-step competitor analysis that included research and comparison of market commonality, competitive asymmetry, resource similarity, intentions, beliefs, relative resource differences, past moves, and counter moves for all abovementioned competitors versus MGM Mirage.

After the completion of our research, we concluded that presently, MGM Mirage is in a direct competition with only one of its competitors-Harrah’s Entertainment Inc. The other two competitors, Las Vegas Sands Corp. and Wynn Resorts Ltd, do not represent a direct threat to MGM at the moment; however, their strategic moves should not be overlooked, because of their similar product offerings, geographic expansion plans and targeted consumer base. In order for MGM Mirage to be ahead of its competition, the company should focus not only on geographic expansion in US, but also on international expansion including through cooperative arrangements with other industry players, improved operational efficiency to minimize costs and technological advancement to maximize revenue.

Focal Firm

MGM Mirage, the focus of our research, is one of the leading companies in the casino hotels industry. The firm emerged from the consolidation between MGM Grand and Mirage Resorts in 2000. Some of its most recognized brands are MGM Grand, Luxor, Bellagio, and The Mirage. The company became the largest by revenue within its category after acquiring Mandalay Resort Group for $7.9 billion in 2005, however was surpassed by Harrah’s after the acquisition of Caesars. The firm owns 16 properties in Nevada, Mississippi, and Michigan and has 50% investments in four other properties in Nevada, New Jersey, Illinois, and Macau, China. MGM acts mainly as a holding company and the majority of its operations are conducted through its wholly owned subsidiaries1.

MGM’s strategy is to develop and maintain its competitive advantage through strong portfolio of resorts; “in-house” resorts operations to ensure outstanding customer service and to allow for maximum revenue and profit generation; execution of sustainable growth strategy; and leverage of brand name and management assets1. The time line of our research study is 2008-2011. The company owns, invests, and manages resorts in different market segments and it focuses on premier resort ownership in each geographic market. The largest segment is Nevada; however, the company is looking as well for new markets with growth potential. Some of the risks associated with the current strategy are linked to limitations in geographic diversifications-all major resorts are concentrated in Las Vegas and some of MGM’s largest competitors operate in the same geographic area. MGM’s revenue for 2008 was $7.2 billion.


The world’s largest competitor in the casino hotel industry Harrah’s Entertainment Inc. founded in 1937 in Reno, NV. The company owns, operates, and manages over 50 casinos in US and UK in different industry sectors. Its operations include casino hotels, riverboat casinos, Indian casinos etc. This firm, as well as other major competitors in the industry,...
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