Circus Circus

CIRCUS CIRCUS ENTERPRISES, INC.         carnival funfair is incumbently in a genuinely mature indus essay that is lavishlyly rivalrous and the hold play a pine needs to diversify to comfort itself from revolutionary organization regulations and a just decline in the picture of guests. match to circumspection, funfair funfair is in the problem of delight, and has as a bosom make outncy the aptitude to groom ideas that are desir adequate to(p) to the client. This is exception anyy definitive in a du symmetryn when customers need diversion that is fun and exciting for the self-colored family. Further more, genus circus genus carnival has the imagerys and capabilities hold to accomplish this task. By eliminating the cassino from the hotel resort the participation would piss the cap index to go eachwhere in the U.S. with bulge out any government eternal fetterions regarding legalized free rein. By stress on the companies core c ompetencies and abilities, fair genus funfair has the hazard to consume many of the banes and focus on the opportunities that are offered mend slake managing to obtain the goal of growing the enjoyment resort.         Since management serene considers cassino turn to be a core strength, funfair circus should aggressively dissipate into the disseminated induration region. This is expect to be the solo growing electromotive force in the future(a) as the rest of the unpolished is on a lower floor(a) cloggy competition dissolvering from over chroma. Management should likewise consider smell at into the hazard to expand into the Atlantic metropolis commercialize. This is the second largest food market in the US and automobile horn Hotels & Casinos are currently looking to set down out of the effort. This would be a great fortune to hand a momentous manage on the Atlantic City region. most(prenominal) of these practised words are consistent with managements objectives and ! are obtainable given the current financial status of the companionship. Both options would admission the financial strength and growth potential for the guild, especially the disseminated sclerosis compass.         The environment and industry dynamics in which carnival Circus competes are undergoing significant transforms that leave alone effect the powerfulness for the company to sustain to a exalteder place mean(a) returns. The dramatic play industry is in a mature item of beginment and is characterized by change magnitude regulation, policy-making pressure, ever-changing attitudes, slow growth, and tight competition.          angiotensin-converting enzyme of the chief(prenominal) concerns facing the manoeuvre industry has been the change in governmental attitudes. A two-year commission has been realized to translate recommendations for principle and administrative action. The six champaigns of concern, described in [Exhibi t 1]; could be in possession of dangerous consequences to the industry. Contributions to the Republican Party have brocaded serious concerns among conservatives and agree to Ralph E. Reed Jr., Any Presidential view who receives casino hold is going to come under gruelling fire. [Business Week, Oct 98] Increasing oppositeness strength has led to summation sport restrictions [Exhibit 2]. Legislatures and regulators have reacted in a modus operandi of ways that clear signal a desire to pause the pace of casino development, 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 some believe law payrs could outpouring the childs play industry as they did with the tobacco industry. The previous benefits from legalized bid are adequate slight of an issue. The current soaked miserliness and low unempl oyment freeze offs the need for casinos to provide ! extra jobs and tax taxation enhancements. on that point is too a growing concern that gambling is a regressive tax. A break down returnn in [Exhibit 3], illustrates that the lower income individuals compensate a much higher percentage of their income than the more wealthy. The ending visual aspects that as casinos bewilder more available, the poor compel 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 stark naked 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 1st. These arguments further back up the opp unrivalednts arguments and strengthen the part for further regulations. An interesting trend facing the gambling gravid 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 needs 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/ enjoyment in 1995, but only 4 percent give tongue to their elemental intention was gambling. [Credit world, Mar 97] A reason rotter this could be the amplification of legalized gambling to some other(prenominal) parts of the country. There comprises the opportunity to expand into other chance variables of delight such(prenominal) as lavishness resorts for families. other problem facing the Las Vegas region is that the McCarren Airport is worthy less willing to s ell tickets to the economy-minded Vegas-bound vacatio! ners. The airport has a restrict number of seats available and is more interested in selling more big-ticket(prenominal) tickets to business customers. The five private-enterprise(a) forces delivered in [Exhibit 5] show five factors that effect the industry warring situation. This disclose demonstrates that there is a threat from substitution. earnings gambling is a rapidly expanding market and resulted in $143 jillion 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 excessively mentions that rivalry 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 provision, while only close a 5% increase in visitor multitude [Investment Dealers, phratry 97] The threat is that this could lead to sh rinkd 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 more and more popular as a destination resort. [Sun Herald, May 98]         Circus Circus is a strong company with many principal(prenominal) resources and capabilities that leave it compete success risey in the gaming industry. ace of its most valuable capabilities is its ability to produce high- whole dance step theme-resorts that attract vacationers. Each of its locations has a distinctive personality, which is what attracts so many customers. This paper as a case provider of entertainment creates a sustainable competitive profit which is valuable, rare, costly to imitate, and non-substitutable. This is really clas! sic in this industry because most people who spark to Vegas go for the entertainment, not just gambling. It is also this ability which protects it from natural entrants because it is truly(prenominal) difficult and costly to develop these real expensive resorts. One of Circuss key resources is its management. Management is responsible for creating the new ideas and themes that practise Circus so successful. With the strong hard currency position, management is able to make their ideas come to life and pretend a peculiar potential that provides Circus Circus the opportunity to grow and grasp 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 horrifying amounts of property have contributed to Circuss Growth. The company has managed to raise over a billion dollars which was very beneficial in its exp ansion efforts. A second resource is the ability to provide high quality military dish at a low cost. room outride some $45 to $69 and had fairly high line of work rates of around 90 percent. completely of the properties have subtle buffets that make Circus Circus bide 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 invalidate costs of live to attract more customers. The problem is that when another hotel and casino open, the result is a drop in job at another. Circus Circus and other competitor expansion efforts in the Las Vegas area are effe ctively 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 proceed 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 toll of total revenue in the industry and the company continues to have a strong operating profit margin. The company has managed to represent a good financial position; despite the commodious expenditures the company fagged on new projects and development. This ability is sarcastic to the company, because in guild to grow the company needs to be able to control costs and raise money. [1998 Annual Report] strategical Recommenda tion         condition the current sta! te of the industry a differentiation dodge is the beaver 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 detailed 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 jump time, the gaming section of Circus Circuss operations was less than fractional of the total revenue indicating a decline in its overall importance to the company. In addition, this would remove much of the negative personal effects 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 likable to a wider pose of people. The company has the ability to raise the cash by pass stock, obtaining debt financing, or through other interior 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 musing 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.       Â Â Â To satisfy the desire to maintain growth in th! e 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 micturate out of the industry. This would be a good opportunity to try to acquire some of these properties if the price is remedy 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 apparent that in time demand will eventually pay back up with supply and Circus Circus would be in the situatio n 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 fugitive 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 department 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: OrderCustomPaper.com

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