Wynn Resort Case Study

683 Words 3 Pages
Register to read the introduction… The reason for this is that the Chinese government has to grant concessions to companies in order to build casinos. Currently Wynn Resorts is one of three companies with a license to build casinos on the strip. In addition, the Chinese government has given permission but only until the year 2017. At this time they may redeem the concession. This policy may deter companies from attempting to gain access to this area.
2) Bargaining power of suppliers – The suppliers for Wynn Resorts would mainly consists of those providing the slot machines and the gambling tools. Since Wynn Resorts is already established within Las Vegas, they would already have connections to their suppliers. Therefore there is little bargaining power for the suppliers.
3) Bargaining power of customers – Gamblers of the industry (buyers) currently have very little influence within the industry. This is due to the Chinese government still having some restrictions on currency movements which limits the number of buyers. However this may change in the future with estimations of residents moving into higher income
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Since the casino industry will be new to the area, buyers will not find substitute entertainment.
5) Degree of competitive rivalry – There is a very low degree of competitive rivalry with this expansion. This is primarily due to the “clout in the Wynn name” (Pearce & Robinson, p.30-9, 2011). This name symbolizes luxury and the best quality of service available everywhere. To continue to ensure this high ranking status, Wynn Resorts has implemented a new policy where pit bosses are rewarded for making customers happy. All of this provides for little opportunity for rivalry from other casinos.
Based on the analysis conducted through Porter’s Five Forces, Wynn Resorts will gain a sustainable competitive advantage by building an additional property. My recommendation would be to move forward with expansion paying close attention to ensuring client’s expectations are met while maintaining profits.

References
Pearce, J., & Robinson, R. (2011). Strategic management. (13th ed.). New York: McGraw-Hill

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