WYNN Macau Tue Tran Soraya Feizpour Alex Huynh Chris Coloma Long Hoang Hung Nguyen Background Created in September 2006 600 hotel rooms 205000 sq ft gaming area 26000 sq ft retail ID: 325491
Download Presentation The PPT/PDF document "Gambling on the edge of china" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Gambling on the edge of china
WYNN Macau
Tue Tran Soraya Feizpour Alex Huynh Chris Coloma
Long Hoang Hung NguyenSlide2
Background
Created in September 2006
600 hotel rooms
205,000 sq. ft. gaming area
26,000 sq. ft. retail
22,000 sq. ft. convention spaceFurther space expansion in December 2007
Encore at Wynn Macau created in April 2010414 hotel roomsSlide3
Tourism dropped during recession
Visitor Volume down 3.7%
Gaming Revenue down 7.7%
____________________
Asia Gambling Market= positive growth
2009 to 2011 increased $20,000+ in GDP per capitaEconomic EnvironmentSlide4
GAMBLING MARKET in ASIASlide5
Moderately Strong financial condition
Growing Net Revenue
2006 to 2007 up $1,255,262
____________________
Decreasing Return on Assets
2006 to 2007 down 9.5%INTERNAL ANALYSISSlide6
5-YEAR STOCK TREND
Current Price on Hong Kong Stock Exchange: $26.25Slide7
INDUSTRY VIEW
RIVALRY AMONG COMPETITORS
-
HIGH
Many competitors already established
Rivals offer similar productHigh exit costTHREAT OF ENTRY- LOW
High capital & resources requiredLicense required
PORTER’S
5 FORCESSlide8
INDUSTRY VIEW
THREAT OF SUBTITUTES-
HIGH
Many other casinos
Lottery
Other non-gaming entertainmentBARGAINING POWER OF BUYER- MODERATE
Hotel rooms, food, other entertainment servicesBARGAINING POWER OF SUPPLIER- VARIES
Gaming equipment
Services & Employment
PORTER’S
5 FORCESSlide9
INSTITUTION View
THEY HELP…
Institutional forces heavily influence Macau casinos
Beijing gave birth to Macau’s rapid rise
Macau monopoly- gambling illegal in the
rest of ChinaChinese economy grows fastest in the world wealthy people w/ money to spare
Informal institution: high demand for gamblingSlide10
INSTITUTION View
BUT HURT…
China limits cash takeout per person, per trip
Big gamblers need to borrow money in Macau
Gambling debts not enforceable in mainland China
intermediaries known as junketsSlide11
INSTITUTION View
JUNKET PROBLEMS
Expensive
take up to 75% gambling revenueLinked to Organized Crimes
occasional battles for territoryNot Transparent investigated by government for money laundering
Build Relationships w/ Gamblers that Casinos Can’t
may compete w/ casinos later
Casinos Still Need Them for VIP Guests!Slide12
INSTITUTION View
BAD STREAK FOR MACAU
Chinese economy slows down
Beijing cracks down on corruption
Long-term reduction in gambling revenue
Macau placed cap on # of gambling tables allowed
Aimed at reducing gambling-based revenueSlide13
INSTITUTION View
WYNN MANEUVERS
Young entrant in the gambling market
Hesitant to employ junkets
Now reliant on junkets to pull VIP customers
Closely watched by US Authorities under Foreign Corrupt Practices Act
More regulatory layersSlide14
INSTITUTION View
CORRUPTION OR “GREASE”
Wynn granted land rights to $4 billion project in
Cotai
, 2012
Included payment of $50 million to local company co-owned by:Edmund Ho, close associate of former Macau top official
Prominent family in BeijingNo accusations of wrongdoing from US authoritiesStill under investigation by Macau anti-corruptionSlide15
RESOURCE ViewSlide16
RESOURCE View
VRIO FRAMEWORK
Key Competitive VRIO Advantages
Value
Luxury products & services that come second to none
ImitabilityRetention of high-end customers w/ world class service
OrganizationWell-established reputable company backed by Steve WynnSlide17
INTERNATIONALIZING
Asian culture’s favorable view & Chinese government’s harsh restriction on gambling
huge obstacle for expansion
High demand for sport event outcomes
public attention & government restrains sport gambling market entrance
Expand traditional casino gambling avoid shortage of labor & competitionSlide18
INTERNATIONALIZING Slide19
Recommendations
Concentrate on developing non-gaming services
Drop in gambling revenue
China track down corruption, decrease in VIP Customers
Establishment of Encore Macau
Marketing Towards Middle-Class Chinese
Chinese has fastest growing middle classSlide20
Recommendations
3.
Training Program for Employees
Macau staff is relatively new & inexperienced
Need proper training
Maintain brand image & top quality4. Special Training Program for Board Members
Complete reliance on Steve WynnSlide21
SUMMARY
Background, Economic Environment, & Internal Analysis
Industry-Based View
Institution-Based View
Resource-Based View
InternationalizingRecommendations