Porter 's Five Forces Industry Based Model

Local legal casino gambling has gained popularity in the United States after a long history of prohibition in many parts of the country. Casino gambling was outlawed in the early 1900’s before being legalized in Nevada and the city of Las Vegas in 1931. In 1978, gambling was legalized in Atlantic City, New Jersey (casino-history.org). Las Vegas continues to dominate as the number one casino destination. Atlantic City and New Jersey have taken a hit as completion in surrounding states increases every year. Pennsylvania surpassed New Jersey as the number two casino destination in the United States in 2015 (Tisdall 2). Today, 43 states have casinos (americancasinosguide.com). Since the birth of the Internet, gambling online has grown into a new industry. Online gambling is continuing to grow to this day and is an industry already worth billions. Many of the issues in today’s society and legislatures have moved away from the issue of if casinos should be legal towards the issue of should sports gambling be legal on websites such as draftkings.com and fanduel.com.

For example, in 1998 the bankruptcy rate in Atlantic City, New Jersey per 100,000 people was 1,019 while the rate of the state of New Jersey was only 555 (gao.gov). In 2003, there was a proposal to add casinos into the mix of Kentucky’s gambling options. Dr. John Kindt, a professor of commerce at the University of Illinois said that bringing casinos to Kentucky would be “bad economics and bad social policy”. “Studies show that within the 35-mile feeder market around a casino, gamblers will spend 10 percent less on food, 25 percent less on clothing and that 37 percent will dip into their savings to pay for gambling. For every three (video slot) machines, you'll be losing two jobs from the feeder market economy," Kindt said. “This occurs because each machine can be expected to bring in $100,000 per year that will not be used elsewhere in the economy” (kybaptist.org). This is a serious issue that occurs when business owners do not think about how their actions will affect others in the future.

It is recommended that Rhand Credit Union Co-operative Society Limited use this model to find a position in the financial services industry where it can defend itself against competitive forces or it can influence its competitors in its favour as well as identify key success factor (KSFs) in the industry.

Awareness of the five forces can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack. By understanding how the five competitive forces that shape strategy influences profitability in a particular industry, executives can develop a strategy for enhancing their company’s long-term profits (Porter, 2014).

High level, intense rivalry may result with profit lost for the company. In most cases, new entrant barriers are high due to the intensity of rivalry (Porter, 2008).

As the casino industry brings in the community with income and tourism, there are more and more countries legalizing and liberalizing this industry. However, the expansion of the casino industry depends on the ability to grant credit to guest. In Nevada, the casino credit accounts for more than fifty percent of the revenue generated by games in the states larger casinos. (Auguilera, Rubinstein, and Reid, 2000) Steve Wynn Resort did not start to conduct the Wynn

Casinos bring a local economy a new tax source and new jobs but it is crucial to look further to see if casinos boost the local economy. In one article the writers state the benefits of the new casino including new jobs and investment. Felsentein, Littlepage, & Klacik (2000) then explain that many casino jobs however require some specific training. This means many employees commute to work. Also some of local casino employees leave previous jobs in community to come work in the casino. The casino is not creating for the local economy if workers are commuting or leaving old jobs (Felsentein, Littlepage, & Klacik, 2000)

One might say that the casinos on reservations are only putting money in the pockets of certain individuals, that enough money is not generated to help the community. Well, take a look at the Mashantucket Pequot’s from Connecticut. “In 1992, the Pequot’s struck a deal…(paying) 25% of gross revenues on slot machine(s) to have slots in its…casino, as long as they paid at least $80 million per year for the privilege of having slots. These large payments prevented the state from granting a license for a proposed non-Indian casino in the Bridgeport area. In the fiscal year 2002, payments to the state are estimated in excess of $350 million” (Evans, 10). At 25%, that means that the casino has generated 1.4 billion in revenue; on slots alone. That’s a lot of money to be poured back into the community, as the casino regularly sponsors local activities in the community. According to the Indigenous Policy Journal, “In 2006, Indian gaming generated net revenues exceeding $25 billion, with evidence suggesting the investment of gaming dollars into a broad array of social, economic, and governmental programs” (Conner, 1). These

The Ferguson Foods contract would be an easy way for Desert Valley to gain access to the US market. Their customers are in the same target market as Desert Valley so this is a natural fit. That being said, the locations are very spread out across different states which will make it difficult for Desert Valley’s brand awareness efforts to gain

When people talk about Las Vegas, the first word coming to the mind must be gambling. Gambling industry (casino) is the obvious city element in Las Vegas, and it has already been a form of entertainment in people’s life. Casinos make Las Vegas become to one of the biggest tourism urban cities in United States. There are more than forty millions tourists coming to Las Vegas every year, because casino plays an important leading role in economy in many different aspects such as catering industry, sightseeing tour, hotels and so on. There are more than 76 casinos in Las Vegas, and each of them has their own wonderful hotel, restaurants and entertainment facilities.

It is considered to the devil’s playground when it comes to online casino licensing, but new ground seems to have been made as another online casino has been approved to operate in Atlantic City. The Resorts Digital brand, which own the popular Resorts Casino Hotel, have been looking for sometime to open up an online arm to their business and it seems that they have finally been approved for digital operations moving forward.

The strategy would be to expand into the already lucrative Macau casino market with one of are most successful casino/resort in the Las Vegas area, the Bellagio. MGM already has a foothold hold in Macau Market, which is provided due to a partnership with Pansy Ho and the successful MGM Macau. The main competition in this area is: Las Vegas Sands Corp. (LVSC), which have 7 properties in the Macau area, Galaxy Entertainment Group (GEG), which have 3 properties and Wynn Resorts Ltd. (WYNN), which have two.

In the early 1930s, gambling was legalized throughout the state of Nevada and casinos began to flourish (Dunstan, 1997). The economic growth in Nevada, especially the city of Las Vegas, has improved tremendously by the creation of casinos. Many people were employed since the operation of casinos requires a huge amount of labor, skill, and expertise. In addition, local retail sales also increased from casinos when gamblers visit the stores to spend their winnings on various items and products (Garrett, 2003). As a result, many state governments began to legalize casinos in order to boost their economies and increase employment. As of today, there are roughly 1500 casinos in the United States and they generate almost 65 billion dollars in revenue (“Facts on U.S Casinos” 2013). However, casinos use immoral methods to achieve this incredible feat of big profit with few government interventions. While the city of Las Vegas becomes more prosperous than before, many citizens lose their fortunes or even lives by the immoral business practices implemented by the casinos. Even though the

Nevada casinos are the second leaders in revenue. The strengths that they have generated are the availablity of more hotel rooms, fine dinning, excellent entertainment, shopping, mergers and acquisitions, customer loyalty, and product differentiation among its rivals. With its many strengths, Nevada casinos represent a high barrier for new entrants as well mainly due to product differentiation and economies of scale. Nevada casios use differentiation on the basis of special themes that characterizes their casinos, such as a medieval castle, a pirate ship, or a movie studio. Nevado casinos also rely on economies of scale as many of the larger casinos are expanding by buiding on additional rooms to bring in more customers. Eventhough Nevada casino has many strengths, it also has a weaknesses.

“The geographic location of a casino is a huge consideration” (Lewis pg. 1). Demographics, travel patterns and nearby competition play a significant part in casino design. “ Most people in North America live within a day’s drive of one or more gaming areas” (Lewis pg. 1), so in order to attract people to the casino there must be something other than the gaming floor to draw them in. Many amenity and non-gaming attractions must be considered in order to really stand out. The casino must design strong support facilities, a hotel that can accommodate as many players as it can afford, a parking system for the traveling patrons, non-gambling facilities for families and it must be an inviting space.