Harrah's Entertainment, Inc. 2005 Term Paper

Pages: 5 (1480 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Topic: Business

Harrah's Entertainment

With over 80,000 employees and 48 casinos opened in three countries (operated under different brands), Harrah's Entertainment is considered to be the world's largest provider of branded casino entertainment. The company has had a very active 2005, with international expansion on the role in countries such as Spain and the Bahamas and new investments in Las Vegas and Atlantic City. These developments have marked an increase in the company's revenues, however, this did not materialize in a subsequent increase of net income, mainly due to a doubling of the operating expenses. On a very competitive market, the country will need continuously monitor its expenses in order to remain profitable.

Current Situation Analysis

Mission/Vision statement

According to the company's website, Harrah's vision statement points out towards the dedication that "each of our brands will be the overwhelming first choice for casino entertainment of its targeted customers." Briefly analyzing this vision statement, it is easy to see that the company aims to be number one in all the segments where it is operating, namely for all the brands that operate under Harrah's portfolio.

External Analysis

There are several important external factors that need to be looked into.

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In terms of economic factors, the company is dependant on the general evolution of the economy. If the economy is booming, then it is likely that it will create new work places and will gradually increase the average income of the U.S. individual. This means that there will be a higher probability that he will be willing to spend the extra amount of money on leisure activities, including the entertainment activities offered at Harrah's. This applies to all income categories.

TOPIC: Term Paper on Harrah's Entertainment, Inc. 2005 Assignment

On the other hand, governmental and legal factors are also important, because they virtually regulate the market that the company is operating in. As such, the government may pass laws that could restrict the gambling activity, which would obviously have a negative impact on the company. Other regulations could equally either stimulate overall business levels (including general measures to stimulate the economy, such as tax reductions) or simply decrease it (for example, by increasing interest rates, thus making credit more expensive).

The technological factor is an important competitive advantage in Harrah's case as well. From supervising methods to gaming diversification, the technological factor can bring an impact in terms of decreasing costs and maximizing revenues from customers.

The social factor can be tied with the moral/ethical factor. In this sense, as an entertainment and, especially, as a gambling business, Harrah's position can be sensitive in terms of exterior perception from customers on the morality of this activity. This is why some of Harrah's programs are directed towards countering this potential effect. For example, the company's website has a page entitled responsible gaming where this notion is presented as one of the cornerstones of the idea of entertainment at Harrah's. This includes promoting responsible gambling programs such as Operation Bet Smart® and Project 21®, while also working with the National Council on Problem Gambling.

Industrial Analysis

The industry is characterized by increasingly high competition, especially in the past years. Among the most important competitors for the company are Boyd Gaming Corporation, MGM Mirage and Trump Entertainment Resorts. The first two more notably have significantly high market capitalization and yearly revenues. However, briefly looking through the comparative figures, Harrah's managed both the highest quarterly revenue growth and the highest gross margin profit of all the four companies.

In terms of suppliers, Harrah's has opted for a strategy relying on a diversified pool of suppliers that could thus reduce any potential supply risks. The company also encourages second-tier supplier programs.

Internal Analysis (non-financial):


Gary Loveman acts as chairman, chief executive officer and president of the company, while Jonathan Halkyard is Chief Financial Officer and Treasurer. The management aims at maximizing Harrah's profits with instruments ranging from a keen management of the company's portfolio of brands and increasing customer retention to operational development and investment in new potential ventures, including overseas in countries such as Spain or the Bahamas.


The company places an important emphasis on different marketing promotion campaigns, aimed both at increasing customer retention levels and at bringing in new customer for the company. For example, the company employs the Total Rewards program and it also hosts the World Series of Poker Tournament in many of its locations. This is an important marketing tool that can attract potential new customers' attention towards the… [END OF PREVIEW] . . . READ MORE

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