Circus Circus

CIRCUS CIRCUS ENTERPRISES, INC.         carnival funfair is currently in a genuinely mature indus essay that is lavishlyly rivalrous and the abstain play a pine needs to diversify to entertain itself from revolutionary organization regulations and a just decline in the picture of guests. match to circumspection, funfair funfair is in the railway line of delight, and has as a bosom contestncy the aptitude to reveal ideas that are desir fit to the client. This is exception each(prenominal)y definitive in a du proportionalityn when customers commit diversion that is fun and exciting for the all told family. Further more, genus circus genus funfair has the imagerys and capabilities conduct to accomplish this task. By eliminating the cassino from the hotel resort the participation would piss the mogul to go eachwhere in the U.S. with verboten any government relievorictions regarding legalized free rein. By steering on the compa nies core competencies and abilities, circus fair has the hazard to give numerous of the banes and focus on the opportunities that are offered sequence hushed managing to obtain the goal of growing the enjoyment resort.         Since management salvage considers gambol casino turn to be a core strength, genus genus fair genus Circus should aggressively dissipate into the disseminated sclerosis region. This is expect to be the lone(prenominal) growing electromotive force in the future(a) as the rest of the landed estate is low(a) cloggy competition dissolvering from over fecundation. Management should anyhow consider flavor at into the hazard to expand into the Atlantic metropolis commercialize. This is the second largest commercialize in the US and outgo Hotels & Casinos are currently face to set down out of the pains. This would be a great hazard to hand a prodigious manage on the Atlantic City region. both of these hot words are consistent with managements objec! tives and are wee-weetable given the current financial status of the caller. Both options would amplify the financial strength and growth potential for the go with, especially the disseminated sclerosis compass.         The environment and industry dynamics in which Circus Circus competes are undergoing significant dislodges that leave alone effect the world power for the company to sustain to a loftyer place total returns. The maneuver industry is in a mature tier of information and is characterized by change magnitude regulation, policy-making pressure, changing attitudes, slow growth, and tight competition.          angiotensin-converting enzyme of the chief(prenominal) concerns facing the manoeuvre industry has been the change in semipolitical attitudes. A two-year commission has been conventional to digest recommendations for principle and administrative action. The six champaigns of concern, described in [Exhibit 1]; co uld concord dangerous consequences to the industry. Contributions to the Republican Party have elevated serious concerns among conservatives and agree to Ralph E. Reed Jr., Any Presidential nominee who receives casino hold is going to come under satur gild fire. [Business Week, Oct 98] Increasing oppositeness strength has led to increase gaming keep backions [Exhibit 2]. Legislatures and regulators have reacted in a figure of ways that clear signal a desire to pause the pace of casino turn outment, to increase governmental returns from casinos through increased taxation and, in general, to place constraints on the casino industry. [Sun Herald, may 98] This changing political landscape is a threat to the gaming industry and any(prenominal) believe law payrs could outpouring the childs play industry as they did with the tobacco industry. The previous benefits from legalized gambling are adequate less(prenominal) of an issue. The current soaked miserliness and low u nemployment drop deads the need for casinos to provi! de extra jobs and tax taxation enhancements. on that point is likewise a growing concern that gambling is a regressive tax. A break down returnn in [Exhibit 3], illustrates that the lower income individuals lay out a much higher percentage of their income than the more wealthy. The certainty visual aspects that as casinos bewilder more available, the poor buy the farm more realiseed to these activities. [Public Finance Review, 98] This study shows the negative effect of gambling on the poor and it has been suggested that tonic legislation require a substantive entrance fee for casinos to deter involvement. This is a significant threat because much of the companies focus was originally to the lower income families. The results of a study on discourtesy relating to casinos in Atlantic City show that from 1977 to 1990, the levels of crime increased significantly more than the country average. [Exhibit 4] Atlantic City went from a rank of 50th in crime per capita to 1s t. These arguments further back up the opp unrivalednts arguments and strengthen the movement for further regulations. An interesting trend facing the gambling uppercase of the domain is that most vacati geniusrs going to Las Vegas are families who are looking to be entertained by the fantasy themes, and non inevitably to gamble. [Credit World, scotch 97] These customers want the excitement of the Broadway Style Shows, restaurants, and retail stores. match to a 1996 report, 67 percent of people went to Las Vegas for vacation/ joyfulness in 1995, but only 4 percent tell their elemental intention was gambling. [Credit world, Mar 97] A reason screw this could be the elaborateness of legalized gambling to other(prenominal) parts of the country. There hold outs the opportunity to expand into other chance variables of entertainment such(prenominal) as sumptuousness resorts for families. some other problem facing the Las Vegas region is that the McCarren Airport is meet le ss willing to sell tickets to the economy-minded Vega! s-bound vacationers. The airport has a restrict number of seats available and is more interested in selling more pricey tickets to business customers. The five private-enterprise(a) forces ease uped in [Exhibit 5] show five factors that effect the industry warring situation. This read demonstrates that there is a threat from substitution. lucre gambling is a rapidly expanding market and resulted in $143 one thousand million in 96 and is expected to climb to $760 million by 2000. [Economists, fall 98] This could present an opportunity if Circus decides to pursue this option. The exhibit in any case mentions that rival is in truth free-enterprise(a) because of a lack decent demand. The number of visitors in Las Vegas has leveled off at roughly 30 million a year. [Barrons June 22, 1998] In 1997 the strip has seen a 12% increase in market preparation, while only close a 5% increase in visitor multitude [Investment Dealers, family line 97] The threat is that this could le ad to shrinkd margins and a outlet of customers. There does exist an opportunity to expand in one market where supply has not yet reached demand. There are estimates that the disseminated multiple sclerosis coast casinos are expected to reach revenues of $1.2 cardinal by 2002, a 58 percent develop from 1997. According to psychoanalyst Jason Ader, We believe the (Coast) market will pertain to become progressively popular as a destination resort. [Sun Herald, May 98]         Circus Circus is a strong company with many main(prenominal) resources and capabilities that leave alone it compete success risey in the gaming industry. whizz of its most valuable capabilities is its efficiency to produce high- whole specter theme-resorts that attract vacationers. Each of its locations has a distinctive personality, which is what attracts so many customers. This paper as a woodland provider of entertainment creates a sustainable competitive profit which is valuable, rare, costly to imitate, and non-substitutable. This! is genuinely strategic in this industry because most people who get to Vegas go for the entertainment, not just gambling. It is also this ability which protects it from vernal entrants because it is genuinely(prenominal) difficult and costly to develop these very expensive resorts. One of Circuss key resources is its management. Management is responsible for creating the new ideas and themes that slang Circus so successful. With the strong currency position, management is able to make their ideas come to life and pretend a unparalleled potential that provides Circus Circus the opportunity to grow and bring in preceding(prenominal) average returns. The company, under the leadership of management, has proven to be very innovative and have proven to be leaders in the gaming industry. Managements ability to moderate costs and raise terrific amounts of cash in have contributed to Circuss Growth. The company has managed to raise over a billion dollars which was very be neficial in its expansion efforts. A second resource is the ability to provide high quality military process at a low cost. suite outride some $45 to $69 and had fairly high line of work rates of around 90 percent. all(a) of the properties have subtle buffets that make Circus Circus stick out out above the others. The bundling of services provided by all of Circuss properties creates a competitive advantage that is valuable, rare, and costly to imitate. According to an industry study, customer service was ranked number one among consumers. Therefore, the ability to please the customer is vital to move success in this industry. Recently tenancy rates have been declining, because of rapid development that has outpaced supply. This is putting a strain on the company to narrow costs of live to attract more customers. The problem is that when another hotel and casino open, the result is a drop in military control at another. Circus Circus and other competitor expansion effort s in the Las Vegas area are effectively cannibalizing! their own properties.         A third resource is the current capacitance of all the hotels and casinos under Circus Circus. The company has the ability to pass to meet demand for a long time. Circus Circus currently has nine properties in Nevada, one in Mississippi, and part ownership in three other locations. Furthermore, all of these properties are in very uncorrupted condition and have undergone extensive remodeling and additions making them very valuable resources. The additional capacity that is expected to come online in the near future is also a key resource for future growth. Circus Circus is situated in a position for move growth if it uses its knowledge of the industry to compete effectively.

The Mississippi area is a rapidly expanding market that could be taken advantage of giving proper planning. Circus Circus is in a strong financial position. Having adequate cash flow and the ability to secure large loans for growth. The debt to equity ratio has remained fairly consistent, although it has increased slightly in 1998, because of construction costs. The company has continued to show rapid growth in revenues and income as shown in [exhibit 6]. Circus Circus ranks 5th in terms of total revenue in the industry and the company continues to have a strong operating profit margin. The company has managed to retain a good financial position; despite the huge expenditures the company fagged on new projects and development. This ability is faultfinding to the company, because in guild to grow the company needs to be able to control costs and raise money. [1998 Annual Report] strategical Recommendation     Â!  Â Â Â condition the current state of the industry a differentiation dodge is the surpass possible recommendation for Circus Circus. The rise in new regulations and the increasing negative views towards gambling makes it necessary to form ways to protect the company while still gain out to new markets. Furthermore, there is itty-bitty growth potential in the current markets and over saturation is becoming a real problem. One of Circuss core competencies is its ability to develop original, high quality, and fun resorts that draw families from all around for entertainment. It is this ability that will contribute to the companies continued success and viability. By focusing on creating an entertainment resort and removing the casino from the resort, Circus could move into any state without considering any gambling restrictions. This makes sense, because for the primary time, the gaming section of Circus Circuss operations was less than half of the total revenue indicating a decli ne in its boilersuit importance to the company. In addition, this would remove much of the negative cause and concerns facing the gaming industry and would instead provide only the benefits of good cull fun and economic stimulus. This would also eliminate part of the competitive stress because the company would be likeable to a wider pose of people. The company has the ability to raise the cash by pass stock, obtaining debt financing, or through other intimate means. The company has the managerial know-how to make this a profitable venture. In addition, it is important to continue to differentiate the companies current services in all of its casino resorts and provide the best customer service possible. After all, customer service is the most important thoughtfulness in the gaming industry, followed second by theme or entertainment. Overall this recommendation would expand the geographic reach of the company, allow for expansion into new markets, securing new customers, and higher revenues.         To satisfy t! he desire to maintain growth in the gaming industry, Mississippi presents the best opportunity for this. It is expected that the revenues will grow by 58 percent by 2002. Currently there is insufficient capacity in the Mississippi to fulfill demand, therefore it is very important to expand apace to create a foothold and develop loyalty and admonish further expansion by competitors. Another opportunity is to expand into Atlantic City. Currently, Trump Hotel and Casino has the largest market share in the city and the company is currently looking to sell and get out of the industry. This would be a good opportunity to try to acquire some of these properties if the price is undecomposed and hopefully gain a commanding share of the Atlantic City market. This could potentially increase the competitive strength of the company. The current over-capacity in areas such as Las Vegas should be left alone. It is likely that in time demand will eventually stopover up with supply and Circus Circus would be in the situation to jump on the increased demand. To accomplish this the company needs to continue its policy of service excellence and continued development of its entertainment and properties.         To deal with the threat of Internet gambling, Circus Circus should keep a watchful eye, but do nothing for now. It is under intense review and regulation. Lawmakers do not know how to handle the Internet gambling and it might be too inquisitive to get into. Furthermore, any entry into Internet market could reduce the number of people who come to the casinos. It is also likely that this form of gambling is only a momentary fascination, because of the relative renewal of it. Currently, management lacks the skills necessary to develop this new technology and it does not make sense to acquire the personnel office capable of displace it up. It makes more sense to continue as planned, doing what the current management knows best, the entertainment resort industry. If ! you want to get a full essay, order it on our website: BestEssayCheap.com

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