1. Chapter 6

2. Chapter 6 Strategic Management Model Remote Industry Task Firm Functional Environmental Events

3. Example of Target Market Descriptors for Harrah’s Casinos Primary criteria used to describe target market Describe in detail the specifics for each criterion at left Preference for gaming and travel Since the late 1980s, gambling has grown considerably in the U.S., a large portion of it occurring while Americans are traveling. Seven percent of all U.S. domestic person-trips included gambling as trip activity in 1999, accounting for 72.8 million person-trips in total. Since 1994, the number of gambling trips by Americans has increased 20 percent. According to the Harrah ’ s Survey 2002, it is evident that support of casino gambling among U.S. house- holds is growing. Casino gambling industry attracted more than 52.3 million people (27% of adult population) making a total of 303 million visits to casinos in 2001, on par with visits to amusement and theme parks. Gambling is expected to gain in popularity this decade as casino properties expand and enhance their facilities and new casinos are opened. Travel Purpose According to the Travel Industry Association of America ’ s Profile of Travelers Who Participate in Gambling, 2000 Edition, like most travelers in the U.S., a majority of gambling is for leisure purposes (83%). Thirteen percent of gambling travelers cite business as the main purpose of the trip. Gambling travelers are also more likely than U.S. travelers overall to travel by air (24% vs. 18%), include a stay at a hotel, motel, or bed and breakfast establishment (76% vs. 52%), and have higher trip spending levels. Age Americans ages 51 to 65 with more discretionary time and income than others are more likely to have gambled at a casino in the last 12 months (year 2001) than seniors and those in younger age groups. Compared to the whole U.S. population, the median household income for casino gamblers is 20% higher than the national average – U.S. population ($41,343), U.S. casino gamblers ($49,753). Income It is likely that Americans with higher incomes visit casinos more often than those with low-income levels. Thirty-five percent of Americans with annual household income levels above $95,000 gamble in casinos, while only 22% of adults in homes earning less than $35,000 are casino players. Occupation/ Education According to the Harrah ’ s Survey 2002, casino players are more likely to hold white-collar jobs. Also, casino gamblers are slightly better educated. Gender More women are involved in gambling now than ever before. Women more than men like to try their luck at slot machines and other electronic games (80% vs. 66%) according to the Harrah ’ s Survey 2002.

4. Variables Influencing the Demand Curve Quantity Price

5. Critical success factors of the multinational lodging industry 1985-1994 Customer Products and Services  Frequent guest programs  Special service for frequent guests  Amenities  In-room sales and entertainment  Business services Technology Development  Technology innovation  Database management  Computer reservation systems Marketing Efforts  Branding  Niche marketing and advertising  Pricing tactics  Direct to consumer marketing Market Expansion  International Expansion  Strategic alliances  Franchising and management fee Operation Management  Cost containment  Core business management  Service quality management  Travel agency valuation  Employees as assets  Conservation/ecology programs 1995-1999  Rapid information technology development  International expansion and market cooperation  Relationship management  Customer-oriented products and services development  Structure reengineering  New marketing initiatives and campaigns  Quality control  Social awareness and environmental protection

6. CSF Loyalty Program Industry leaderImprovingTrouble putting a good one together Does not feel the need for one OK Location Feels it is the leader No where near the market presence Growing but a long way to go Leading the luxury segment Strong market presence Reservation system Once a leader now keeping pace only Investing heavily to be- come the leader Seeking to gain strength OKOK, but not a market leader Revenue Management System Technology utilization In-room amenities Brand strength Market presence Brand portfolio Operating management system Industry strategic group comparison on lodging industry critical success factors

7. Key Value Drivers Affecting Operational Cash Flow Variance in the Casual Theme Restaurant Sector Unanticipated Effects on Industry Operating Performance Economic Environment Index of Operating Cash Flow per Unit (IOCFPU) CPISEA t-1 PPI t-3 – 8.893 3.557 Commodity EMPPP t-2 6.712 Labor Market PPILEFE t-3 – 13.423 Inflation R 2 =67% Sensitivity

8. Comparative and Longitudinal Analysis of Major Multinational Hotel Companies

9. Analysis of Competitors