Casino Industry Case Analysis
There is a steady growth rate in gaming revenues taking effect in the casino industy around the United States. A number of factors are tied into the increase including new entrants to the casino industry and rival casino expansions. Through aspects of Porter’s Five Forces Model of Industry Competion: Rivalry among existing firms, the threat of new entrants, and the threat of substitues, this case analysis addresses key problems the casio industry is facing and implements stratiges they may use to tackles thoses issues. In addition, SWOT analysis (Strengths, Weaknesses, Opportunites, and Threats) will be used to facilitate the discussion.
Through the Porters Five Forces Model of Competition, were identified
Some gamblers do not want to travel as far as Las Vegas to get the casino experience. Along with this fact, gas prices are steadly rising limiting long travels for vacation. Both facts increase the likelyhood that gamblers will seek the casino experience closer to their residential areas. Atlantic City casinos, riverboats, and Western town casinos can take advantage of this by utilizing its own strengths which for the Atlantic City casinos is its closeness to various northeastern cities.
Substitues are the second major factor identified in the casino industry competitive environment analysis. Race track betting, gaming machines at race tracks, and internet gambling are the substitutes that are placing a threat to the casino industry. The emergence of internet technology is a factor of the general enviornment that has a direct effect on the competitive enviornment in particular the rise of internet gambling. Hence, we conclude that this limits the returns from hotel accomodations, dining and enterntainment, which places a ceiling on the prices that the casinos can charge. Therefore, the differentiation of the product is high and presents a threat to the casino industry by making the revenues and profits tighter. Finally, with internet gambling, one doesn’t need to be in a