HARRAH'S ENTERTAINMENT, INC.

HARRAH'S ENTERTAINMENT, INC.: STRATEGIC AUDIT

This paper presents the findings of a strategic audit of Harrah's Entertainment, Inc. The findings of the strategic audit cover the following topic: (a) background information on the company; (b) external analysis of the environment; (c) internal analysis of the company; (d) analysis of company strategies; (e) analysis of organizational structure and control systems; (f) analysis of the company's past performance; and (g) predicted future performance of the company for 2004-2006.

Background Information on the Company

Harrah's Entertainment, Inc. is the world's third-largest gambling company. Harrah's owns, operates, or manages 25 casinos under the Harrah's, Harveys, Players, Showboat, and Rio brands in the United States. The company's operations include casino hotels, dockside casinos, riverboat casinos, and Indian gambling enterprises ("Harrah's Entertainment, Inc. Overview", 2004).

One important and effective strategy followed by Harrah's Entertainment is the company's customer rewards program Total Rewards. The conventional growth strategy in the casino segment of the gambling industry is to build ever newer and bigger casinos. The conventional strategy is capital intensive and somewhat risky. Harrah's Entertainment developed the Total Rewards program from a retail perspective to encourage growth at existing facilities. The heart of the strategy is a data mining operation operated by Cognos that loca

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operations on those lands with little interference from state governments. Indian gambling operations need not be competition for companies such as Harrah's Entertainment because most Indian-owned casinos are operated by major casino operating companies such as Harrah's. The buyers in the gambling markets have a great deal of power in 2004 because most of them no longer have to travel hundreds of miles to visit a legal gambling facility. Thus, programs such as Harrah's Total Rewards are implemented to motivate customers to select one gambling venue over another. Important resources for gambling facility operators are gaming floor personnel and casino facility operators. These resources more so than food or gambling equipment and technology are the keys to success for casino operators. When the job market is shaky, as is the case in 2004, the casino operators have greater power than the sellers (would be gaming floor personnel). When the job market is tight, however, the shoe moves to the other foot. With respect to the sellers of casino management services, the power balance is nearly equal between the owners of casinos and management services providers because each group needs the other to survive. With respect to substi

Category: Business - H