Strategic Marketing Management- MKT 338

Professor: Dr. Arash H. Zadeh

Prepared by:
Team Number: #12
Eric Wilke
Zach Bertram
Jack Sloan
Braden Anderson
 I. Executive Summary

MGM Resort’s main purpose has been to provide customers with experiences that
they will cherish forever, and they have the ability to do this through their top quality
entertainment, pristine resort locations, and a highly skilled workforce. At MGM we want
to seek out the needs of all customers and provide a product or service that will meet
those needs and see to it that every customer enjoys their time. With this in mind we
decided it would be best to look at this business very thoroughly to decide if there is
anything that can be done to help better the experience of our customers.
At first, we conducted a situation analysis and dove into the internal, external and
customer environments. This provided us with all of the necessary information needed to
provide a fair and accurate SWOT analysis. With all of the strengths, weaknesses,
opportunities and threats in mind we were able to develop some competitive advantages
and ultimately determined that it would be best to focus on a new market within our
resorts. This market that we have labeled as “Group Finder” is something that none of our
competitors have looked into and will provide us with a target market that seems to be
under-represented.
Solo travelers make up a huge percentage of customers and with a new service in
mind this is the market that we decided to focus on. We have developed a plan to make
sure that these customers have the ability to make the most out of their experience with a
new app add-on called Group Finder. Through the new MGM Resorts Group Finder add-
on, these customers will have the ability to join in on a new and exciting service that
allows customers to link up with other people or groups with similar interests.
 II. TABLE OF CONTENTS
I. Executive Summary

II. TABLE OF CONTENTS

III. Situation Analysis

A. The Internal Environment
B. The Customer Environment
C. The External Environment
IV. SWOT Analysis

V. Developing Competitive Advantages

VI. Marketing Strategy

A. Target Market
B. Product Strategy
C. Pricing Strategy
D. Distribution/supply chain strategy
E. Integrated Marketing Communication (promotion) strategy
F. Brand Strategy

VII. Financial Projections

XII. Appendices

IX. References
 III. Situation Analysis
A. The Internal Environment
MGM Resorts International founded in 1986 and is based in Las Vegas, Nevada. They

own and operate casinos, hotels, and entertainment resorts in the United States and Macau. The

company operates through three segments including Las Vegas Strip Resorts, Regional

Operations, and MGM China. The casino resorts offer gaming, hotel, convention, dining,

entertainment, retail, and other resort amenities. The casino operations include slots, table games,

and race and sports book wagering. Their customers include premium gaming customers, leisure

and wholesale travel customers, business travelers, and group customers [Yahoo Finance].

“MGM Resorts commits to creating a more sustainable future, while striving to make a bigger

difference in the lives of its employees, guests, and in the communities where it operates. The

global employees of MGM Resorts are proud of their company for being recognized as one of

the FORTUNE Magazine’s World’s Most Admired Companies” [mgmresorts].

Mission and Vision Statement

“MGM Resorts International is the leader in entertainment and hospitality- a diverse

collection of extraordinary people, distinctive brands and best-in-class destinations. Working

together, we create partnerships and experiences that engage, entertain, and inspire”

[mgmresorts]. Their core values are teamwork, integrity, inclusion, and excellence. MGM

Resorts strives to be the most recognized global leader in entertainment and hospitality,

conquering innovation and diversity to inspire excellence, including first-class accommodations

and dining, exciting world-class entertainment, state of the art meeting and convention facilities,
and high-quality retail and gaming experiences [mgmresorts]. MGM Resorts is dedicated to

holding the finest resorts and creating the best customer experience compared to their

competitors.

B. The Customer Environment

Current and potential customers

MGM Resort customers include premium gaming customers, leisure and wholesale

customers, business travelers, and group customers including conventions, trade associations,

and small meetings. Their current revenue is $4.92 billion and has dominated the casino and

resort industry [Yahoo Finance]. These customers tend to be wealthy people on the high end of

the income spectrum. They attract a lot of people who are on business and older adults who just

plain and simply like to gamble in the casino. Their potential customers are those who have a lot

of money to spend and enjoy the luxury of the resort and enjoy gambling. MGM Resorts could

be a place for a bachelor party or any type of celebration. Their high class entertainment is

something that customers are going to want to experience at least once in their lifetime.

Why (and how) do customers purchase or not purchase the firm’s products?

Customers will visit MGM Resorts for their top of the line resorts based on quality and

service. They strive to train their employees to provide the best service possible to the customers

that choose to visit MGM Resorts. Customers who enjoy gambling using slot machines, sports

book, and other gambling services go for their high quality casinos and to be a part of the total

resort experience. Others will go to experience first-class accomodations, dining, world-class

entertainment, and the state of the art meeting and convention services. Customers who don’t

spend their money either don’t like to gamble, are not interested in what they offer, or they
simply just can’t afford it. These resorts catch the attention of wealthy people who come to enjoy

themselves and have fun with what the MGM Resorts have to offer.

C. The External Environment

Competition

Traditionally, a casino's target market has always been older adults. MGM and their

competitors have managed to create an innovative resort style environment that includes fancy

restaurants, nightclubs, etc. intertwined with their casinos. This has resulted in a shift in their

target market to include both young and older adults. Additionally, MGM Resorts International

deals with local and international consumers by having locations in the United States as well as

in Macau, China. MGM Resorts main competitors consist of Las Vegas Sands, Marriott

International, Caesars Entertainment, and Wynn Resorts. Revenue reports of 2019 show that

MGM Resorts is the leader in the industry, earning $12.9 billion. Not far behind is Marriott

International with $10.6 billion. Following Marriott International is Caesars Entertainment with

$8.7 billion, Wynn Resorts with $6.6 billion, and Las Vegas Sands at $3.6 billion ("MGM

Resorts Competitors" 2021). MGM Resorts is also the top earner among the previous companies

when viewing the company’s net income, which was $2.6 billion in 2019.

Las Vegas Sands has a target market that is very similar to MGM but with a little more

focus on couples. They often attract couples that are interested in a very upper echelon resort for

occasions such as honeymoons. They are also an international company and have properties in

Asia as well as the United States ("Home" 2021). One of their major strengths is that they have

very high levels of customer satisfaction. They strive and make it their goal to ensure that all

customers are completely satisfied and all problems are taken care of. Since they have invested
in a dedicated customer relationship department they have established very solid brand equity

among current and potential customers. The company also has strong free cash flows which

allows them to easily expand and venture into new projects. Las Vegas Sands major weakness is

their lack of spending in research and development. When compared to their competitors, they

are below average and this is hindering their ability to maintain a competitive advantage.

Another weakness is that they have relatively high days inventory and this is largely due to the

fact that they are not the best at forecasting product demand. This is what leads them to an excess

of inventory that they are unable to sell.

Marriott International has a target market that consists of upper class, corporate, families,

and honeymooners. Marriott International has several strengths that make them a powerful

competitor against MGM Resorts. For example, they are the largest hotel chain globally, and

currently have over 6000 hotels in over 122 countries (source). Besides their enormous size, they

also have a tremendously positive reputation in the industry. Consistently appearing on the

Fortune 500 list for the past 21 years (source). It should come as no surprise to learn that they

also have developed superior customer loyalty throughout years. The customer loyalty is so

strong, that many customers refuse to stay in anything that isn’t owned by Marriott. Being the

largest hotel chain in the world ultimately has its downsides as well. A major weakness of the

company is that they focus too much on expansion, ultimately making it impossible for them to

maintain standards of service across all locations. A major weakness of Marriott International is

their issues with cybersecurity. In 2018, one of their hotel guest databases was hacked and

personal information (names, addresses, phone numbers, etc.) of 500,000 million people was

exposed (source).
 Wynn Resorts is an international luxury casino resort that primarily focuses on attracting

premium tourists. When it comes to strengths, Wynn Resorts has high brand recognition within

the United States. Similar to the other companies mentioned, Wynn Resorts is present in strategic

locations and has casinos in Macau, China (source). The main weakness of the company is that

they have declining operational performance and they also don’t have as many locations as

competitors, making it difficult for them to compete.

Caesars Entertainment is one of the largest gaming companies in the United States. They

own over 50 resorts and have several well-known casinos such as Caesars Palace, Horseshoe,

Eldorado, and many others (source). When it comes to strengths, Caesars Entertainment has a

very strong brand portfolio and has been successful at creating new products. The main

weakness that the company has is that they are not allocating enough resources to new

technologies, leading them to fall behind when compared to their competitors (Source).

IV. SWOT Analysis

Strengths

● Performance in New Markets

● Strong Free Cash Flow

● Strong Dealer Community

● Highly Skilled workforce

MGM Resorts International has built its way into entering new markets and

making success of them. This Expansion of the markets has helped the organization build
a new revenue stream and diversified the economic cycle risk in the markets it operates

in. MGM Resorts International has strong consistent cash flow that provides resources in

the hand of the company to expand into new projects. Lastly, MGM Resorts International

is really fond of their highly skilled workforce and their strong dealer community because

MGM invests huge resources in training and development resulting in highly skilled and

motivated employees.

Weaknesses

● Financial Planning not done properly and efficiently

● Investment in new technologies

● Product Demand Forecasting

On the opposite side of things MGM Resorts International lacks in the financial

planning area meaning that their current asset and liquid ratio shows that the company

can use their cash more efficiently than what they are doing now in the present. By being

better with that planning for example MGM can invest into new technologies that will do

what's best for the company and bring it up in the coming future. Lastly, MGM Resorts

International isn't very good at product demand forecasting and is leading to a higher rate

of missed opportunities compared to its competitors.

Opportunities

● New Taxation Policy

● Economic uptick and increase in customer spending

● Decreasing cost of transportation

 ● New customers from online channel

To overcome the weaknesses mentioned above MGM plans to counteract those

weaknesses with these opportunities to give them the upper hand. The new taxation

policy can impact the way of doing business and can open new opportunities for

established players such as MGM Resorts International to increase its profitability.

Decreasing cost of transportation lowers shipping prices and brings down the cost of

MGM Resorts International’s products thus providing an opportunity to the company.

This can either boost its profitability or pass on the benefits to the customers to gain

market share. To increase customer spending MGM needs to capture new customers and

increase its market share and this will open more opportunities for them. Lastly MGM

needs to acquire new customers from online channels by leveraging their opportunities by

getting to know their customers and serving their needs using big data analytics. They

can use this to find new trends in the consumer behavior and can open up new markets. It

provides a great opportunity for the organization to build new revenue streams and

diversify into new product categories too.

Threats

● Changing consumer buying behavior

● Intense competition

● New environment regulations

● Liability laws
 MGM Resorts International faces threats by the changing consumer buying

behavior from online channels, this could be a threat to the existing physical

infrastructure driven supply chain model. With intense competition stable profitability

has increased the number of players in the industry over the last two years which has put

downward pressure on not only profitability but also on overall sales. Liability laws in

different countries are different and MGM Resorts International may be exposed to

various liability claims given change in policies in those markets. This is because of new

environment regulations under Paris agreement (2016) could be a threat to certain

existing product categories.

Strengths M I R

S1 Performance in New Markets 2 3 6

S2 Strong Free Cash Flow 3 3 9

S3 Strong Dealer Community 2 1 2

S4 Highly Skilled workforce 3 3 9

Weaknesses

W1 Financial Planning not done properly and efficiently -2 3 -6

W2 Investment in new technologies -3 3 -9

W3 Product Demand Forecasting -2 3 -6

Opportunities

O1 New Taxation Policy 2 2 4

O2 Economic uptick and increase in customer spending 2 3 6

O3 Decreasing cost of transportation 1 2 2

O4 New customers from online channel 3 3 9

Threats

T1 Changing consumer buying behavior -2 2 -4

T2 Intense competition -3 3 -9

T3 New environment regulations -2 2 -4

T4 Liability laws -1 3 -3

V. Developing Competitive Advantages

Strength-Threat: Mgm Resorts can use its strength of performance in new markets in

order to find a market with less intense competition and less strict regulations. In the

current market the competition that Mgm is facing is becoming more and more intense

due to the stable profitability attracting new companies. This provides Mgm with a great

opportunity to find a new market where they can be more successful in order to keep their

revenues high.

Strength-Opportunity: MGM Resorts has a huge upper hand when it comes to the

ability of their staff, this comes in handy in many different ways including taking

advantage of new potential customers in the online channel. In order for MGM to gain

the most from their potential online customers it is important that the workforce analyzes

all of the data that they have collected. This will enable them to provide the potential

customers with opportunities that they would love to take advantage of. With a skilled

workforce this can be done easily as long as everyone is on the same page and they find

different avenues to attract more customers.

 Weakness-Threat: MGM Resorts has had issues with investing in new technologies and

the competition in its current market is getting more and more intense. Both of these can

destroy their market share and it is in their best interest to work on investing in new

technologies that will allow them to expand into new markets with less fierce

competition. MGM needs to realise that there are other markets that they can get into as

long as they put in an effort to offer something new.

Weakness-Opportunity: With the opportunity of new customers coming in from online

channels, it is important that MGM takes advantage of that opportunity. One way to do

this is to avoid the mistakes of its past and focus on improving their product demand

forecasting. When dealing with new potential customers it is very important that you find

what would peak their interest the most in order to keep them interested. A big part of

that is determining what products or services would achieve the highest demand. If MGM

were to collect data on its online customers to get a better understanding of what they are

most interested in, they will be able to fully take advantage of the new opportunity.

VI. Marketing Strategy

A. Target Market

Characteristics that make up the target market for MGM Resorts International

consists of both the young and older age demographic. With the new app add-on we are

going to focus on customers that solo travel frequently. About 70% of customers that are

traveling solo are doing so because they want to see the world and enjoy their time but

have no one to go with (source). Solo travelers are interested in having a good time,
 whether that be by participating in gambling or enjoying the amenities offered at the

resorts. MGM is catering towards financially stable clientele and although they don’t

mind paying high prices, they expect that MGM Resorts International is going to provide

luxurious accommodations, superior customer service, and an all around positive

experience. The buying habits range from the compulsive gambler to the more conscious

traveler who is there to enjoy the resort, rather than the casino. Similarly, many of the

customers are only at the resort for a short period of time, thus they will most likely be

consuming food, drinks, services, etc. all in excess. This Group Finder app add-on will be

able to cater to the needs of solo travelers and find them a partner or group to travel with

and enjoy the many things they have in common.

B. Product Strategy

Our proposed product strategy for MGM Resorts International is to further invest into

their mobile app by creating a new service that allows users to connect with other guests

that share similar interests. For a small fee of $10 a month, members will be granted the

ability to book rooms near new found friends and will make it easier to meet people,

families, etc. based on preference settings. The use of this app will greatly encourage

social involvement within the resort and create a better community overall for guests. The

new service for MGM’s current app will primarily focus on the young to middle age

demographic. The reason this age demographic will be most affected is due to the fact

they are the most familiar with technology. However, this service has the potential to

reach any user who is tech savvy enough to understand the purpose of mobile apps.

Fortunately, those that are attending any MGM Resort are financially stable and a small
 monthly fee of $10 will not deter them from purchasing this feature. The logo of our

application can be seen in Appendices A and the flyer for our new service can be found

in Appendices B.

C. Pricing Strategy

The service is $10 a month on the app and it connects you with other people who have

similar interests that MGM Resorts International provides. None of the competition has this

service installed in their app so it would give MGM Resorts a competitive advantage. Premium

pricing would be used to start, MGM has the ability to use any reasonable price they want to

provide this service since none of the competitors have it. But, once competition starts

implementing this service in their apps, we’ll have to adjust the pricing strategy accordingly.

But, $10 a month is a very reasonable price since people who visit MGM Resorts international

are typically wealthy people. Plus, it is completely optional, you don’t have to pay it, it’s only

there so people can explore and meet new people who share similar interests and have the

possibility of developing a long-term friendship or partnership. This service is projected to

increase profits in the Casino, rooms, food/beverage, entertainment, retail, and other sectors with

$0 in reimbursed costs (Appendix E).

D. Distribution and Supply Chain Strategy

MGM Resorts international will implement this service on their app and their website.

People who use the app will have this option to pay $10 a month to connect with other people

who attend the same resort wherever it may be. It will give you the option when you reserve a

room, make a reservation to an MGM restaurant, and when you buy tickets to a show. This
service will be available to all MGM Resorts locations, and you’ll have the ability to sign up

using the app or by simply logging onto their website.

E. Integrated Marketing Communication (Promotion) Strategy

There are two advertisements created for MGM Resorts. The first advertisement

being (Appendix C) features a maid making a bed but with the wording “Here You’re

part of the family”. This captures what MGM is going for when it comes to trying to

target families so by showing their target market that they want to bring families to their

resorts this will allow them to look more family friendly to the consumer rather than just

a gambling hotel. They want to treat you like you live there and give you the best

experience they can to make sure your stay is perfect. The second advertisement being

(Appendix D) a picture of old time Rome when sports were invented with the quote “We

Invented Sport” this ad encourages gambling and targets solo travelers that love to have

fun and party. This shows that you'll never get bored of being entertained by MGM and

what they have to offer for so many sports to be gambled on just like how Rome was.

Both of these two advertisements tie in together because they are both about having fun

and even though one is family oriented and encourages families to come, it gives adults a

chance to gamble a bit and enjoy the other amenities and not feel that they are leaving

their kids out. MGM plans to advertise on tv and social media to get their services out

and by offering more amenities for their price MGM can push past its competition. Both

ads will be on MGM’s website.

F. Brand strategy

The perceptual map was created to compare MGM’s major competitors. For the

perceptual map we used Marriott International, Wynn Resorts, Caesars Entertainment,

and Eldorado Resorts to compare the quality of the Resorts. We compared them by

Revenue and Quality. Strangely Marriott International is the top Resort right now when it

comes to Revenue and quality this puts them in the top right quadrant with MGM

because even though they are similar to them their quality is a bit better and their

Revenue is higher by 5.4 Billion than MGM. Not only does MGM have to worry about

Marriott but Caesars Entertainment is a close second when it comes to their similar

quality, their Revenue is 3.5 billion more than MGM currently as of 2020 so for this year

MGM has to surpass their other tough competition. For Wynn Resorts they were put in

the top left quadrant because of their great quality but they lack in Revenue for the year at

2.1 billion which is less than 5.2 billion. Lastly, Eldorado Resorts was placed in the

bottom left quadrant since their quality was pretty low compared to the other resorts but

remained a bit higher in Revenue with 3.5 billion. MGM should consider raising the

performance of their hotels in order to compete with Marriott International and Caesars

Entertainment. For Reduce MGM should consider offering their app services with the

Group Finder app that will put them ahead of their competition and give them an

advantage. MGM should create more awareness for the Group Finder app. When it

comes to their competition the Group Finder app will allow the customer to be able to

find people similar to them that fit their needs that way they can party and enjoy a

positive time on their visit. MGM should consider eliminating some fees that way people

get the value they pay for when they stay with them.
 VII. Financial Projections

Market Sales Opportunity Formula: M = B x Q x P

M = Market Opportunity

B = The number of Prospective Buyers

Q = The Quantity Purchased

P = The Price of an Average unit

We expect to reach the target market of solo travelers which makes up about 11%

of the entire travel market (source). This number comes out to a staggering 209 million

people traveling solo, and based on a survey of solo travelers 70% of them “have no one

to go with” (source). Based on these numbers we can assume that roughly 140 million

people are either looking or would like a group to travel with. Factoring in MGM’s

current market share of “8.13%” (source) it is possible that the Group Finder platform

could solve the needs of roughly 11 million solo travelers.

Potential MGM Resorts Group Finder Monthly Customers: What is possible

M= $118,941,900

B= 11,894,190

Q= 1 month

P= $10

Potential MGM Resorts Group Finder Monthly Customers: What is likely at the start

M= $20,000,000

B= 2,000,000
Q= 1 month

P= $10
 XII. Appendices

Appendix (A): Logo

Appendix (B): Flyer

Appendix (C): Advertisement #1
Appendix (D): Advertisement #2

Appendix (E): Projected Profits

Appendix (F): Perceptual Map
 Wynn Marriott
Resorts Employee Internationa
Rating: 4.1 Quality (High)
l
Revenue Rating: 3.9
2.1B Caesars
Revenue
MGM
Entertainme
10.6B
Resorts
nt
Rating: 3.6
Rating: 3.7
Revenue
Revenue
5.2B
8.7B

Revenue Eldorado Revenue

(Low) Resorts (High)
Rating: 3.2
Revenue
3.5B

Employee
Quality
(Low)

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