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Caesars Entertainment Case Solution & Answer

Caesars Entertainment Case Solution

Introduction

As a general rule, casinos need to be competitive not only within their brand but also externally. As other forms of entertainment become available, those with discretionary incomes will vote on where to spend the money. In order to be competitive; casinos need to offer better value or a better experience so that they could be able to maintain a competitive advantage. At Caesars Tunic a, Mississippi-casino, the great economic crisis of the year 2008 was particularly difficult, as cuts in entertainment spending made it extremely intensive to gain the market share.(Sesia, 2018).

This document is focused on Caesars Entertainment in Las Vegas, Nevada. It aims to analyze how the company uses lean strategies to develop continuous improvement plans. Caesars Entertainment has 68,000 employees and it operates fifty casinos in five countries / regions, which makes it a geographically diverse casino entertainment provider. Caesars Entertainment’s names include: Hurrah, Caesars, Rio, Flamingo, Paris, Bally, Horseshoe and London Clubs International. The most impressive venue is on the Las Vegas Strip, which covers one mile and a quarter of a mile, and features nine casinos. In the year 2012, Caesars Entertainment’s net income was $ 8.6 billion.

Analysis

Economy analysis

  • The recent economic credit crisis bought financial challenges.
  • People are focusing on receiving lower-costly service.
  • Lower growth in different business segments indicates the lower disposable income of the people.
  • The availability of debt has been reduced over the years, because of the credit crisis.

Industry analysis (Porter five forces)

  • The threat of new entrants in this industry, is relatively low.
  • Rivalry among the existing competitors is high.
  • The bargaining power of suppliers is high, as there is a limited number of suppliers.
  • The bargaining power of buyers is high.
  • The threat of substitutes is high.

PESTLE analysis

Political

  • Political stability and support ensure help to Resorts & Casinos.
  • Intellectual property protection.
  • Favored trading partners.

Economic

  • The availability of a skilled labor force reduces costs.
  • Recent credit crisis brought financial challenges.
  • Increment of service price negatively affects the number of customers.

Social

  • It is deeply influenced by the social and cultural forces of different markets.
  • Changing socio-cultural trends and people’s preferences, positively influences the people’s preferences regarding the access to casino games and services.

Technological

  • The more innovative the company is, the higher its market share will be.
  • Recent technological developments by Caesars Entertainment Corporation competitors lasts negative affects over its business.

Legal

  • The resort and casino industry and national antitrust laws.
  • The legal framework and institutions are not sufficient to protect the intellectual property rights of different countries.

Environmental

  • Attitudes towards “green” or ecological products by the company, creates a positive outlook.
  • Air and water pollution regulations in the Resorts & Casinos industry have become strict.

Company analysis (SWOT analysis) for Caesars Entertainment

Strengths

  • Comprehensive product and service portfolio.
  • High level of customer satisfaction and a strong distribution network.
  • Strong presence at different locations.

Weaknesses

  • Under-performance relative to major competitors.
  • The high attrition rate in the workforce.
  • Caesars Entertainment’s profitability and net contribution ratio are below the industry average.

Opportunities

  • Driven by technology and innovation.
  • New trends in consumer behavior.
  • New customers through online channels.
  • Market development results in less competitive advantage.

Threats

  • A higher amount of debt.
  • Higher labor and administrative expenses.
  • Changing consumer shopping behavior through online channels could jeopardize the existing physical infrastructure.

Strengths and Weaknesses of Moving Averages Model

The main strength of moving average model is that it provides a smooth line which is not easy to move up and down due to the short-term price fluctuations. The weakness of moving average model is that it responds slowly to the rapid price changes that often occur at market turning points. Moving average model are generally preferred by traders or analysts who have been trading for a long time. (e.g., daily or weekly charts)(MAVERICK, 2020).

Further, no results from the moving average model were found to be surprising.

Strengths and Weaknesses of Linear Regression Model

If the relationship between the co-variate and the response variable is linear, then the linear regression is good. This is a good thing because it shifts the focus from statistical modeling to data analysis and preprocessing. This is very useful for learning how to use the data without having to worry about the complex details of the model.

One obvious disadvantage is that the linear regression simplifies many practical problems. Covariates and response variables are generally not linearly related. Therefore, setting up the regression line using OLS provides us with a line,having a higher RSS feed.

In short, linear regression is very suitable for understanding the data analysis process. However, it is not recommended to be used in most practical applications, because it oversimplifies real problems.(Halthor, 2017).

The independent variables that have been chosen for the linear regression model, are the type of the customers and average daily rate paid for the room by customers. Further, no results from the linear regression model was found to be surprising……………….

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