Business Studies Environmental Analysis Essay

Pages: 4 (1160 words)  ·  Bibliography Sources: 4  ·  File: .docx  ·  Level: Master's  ·  Topic: Recreation

Business Studies

Environmental Analysis of MGM Resorts International

Remote Environment

Operating Environment

Industry Environment

Competitive Position

Organizational Structure

MGM Resorts International is a global leader in the hospitality in gaming industry, principally through gaming resorts. The company is listed on the New York Stock Exchange, and has two reporting segments, the first is the Wholly Owned Domestic Resorts which deals with the U.S. resorts owning and operating 15 different resorts in the United States, located in Nevada, Michigan and Mississippi. Flagship hotels include several Las Vegas hotels and casinos including The MGM Grand, The Mirage, Bellagio and Mandalay Bay. The second reporting segment is MGM China, with the company only a 51% of MGM China Holdings Ltd. which owns and operates the resort and Casino at MGM Macau. The company also has interests in other properties, including 50% investments in operations in Nevada and Illinois. The organization has a vision which states that the company seeks to "be the recognized global leader in entertainment and hospitality" (MGM, 2013)

The company operates a highly competitive environment, and has a number of internal and external challenges. In order to appreciate the position of the organization, and environmental analysis looking at the internal and external environment may be considered.

2.

SWOT Analysis

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A SWOT Analysis provides a good starting point for an analysis, with the strengths and weaknesses looking at the internal aspects of the organization, and the opportunities and threats looking outwards (Lynch, 2011). This framework provides a good overview of an organization (Lynch, 2011).

Essay on Business Studies Environmental Analysis of Assignment

MGM benefits from a number of strengths. One of the major strengths is the high level of brand recognition; MGM is a well-known brand name and have associated with the hospitality and gaming industry, especially with the renowned Las Vegas strip hotels named in the introduction. The organization's brand reputation and Association of the high standards associated with the brand is a source of competitive advantage. The company is well-placed with a significant amount of valuable property assets. The organization may also be argued as having strengthened weathered revenue is generated, and while the organization is Memphis gaming activities, more than 50% come from other activities including the provision of hotel rooms, meals and entertainment. This provides a degree of diversification which can be beneficial, especially during difficult trading positions.

The financial position of the organization may be seen as a potential weakness, although there is a high level of revenue, for two out of the last three years the company has suffered a significant loss, with net profit after taxes of -$1,768 million (MGM, 2013). This reflects another major underlying weakness; the financial structure with a high level of indebtedness, with a leverage ratio of 6.02 compared to the industry average of 3.47 and a debt to equity ratio of 3.1 compared to the industry average of 1.55 (MSN Money, 2013). The firm has undergone some capital restructuring to reduce the overall cost of debt, but the debt is a major burden, while the firm made an operating profit the interest payments account for a great deal of the loss, with interest payments of $1,116 million in 2012 (MGM, 2012). The organization needs to make continual investment in the resorts to maintain the brand value and reputation as well as support the quality resort experience, this also places a pressure of the financial structure in which a weakness when the firm is… [END OF PREVIEW] . . . READ MORE

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