8/3/2019 Case Note_Harrah Entertaintment
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Harrahs Entertainment: Case Notes
Problem Statement:
I. Whether Harrah should continue to grow profits by investing
in
information technology?
Their competitors have heavily invested in facilities, leaving
Harrahsbehind in this regard.
II. How much marketing efforts have contributed to Harrahs
Overall
performance?
III. Whether these marketing results are sustainable over the
period of time.
Situation Analysis:
Harrahs Entertainment has seen 100% increases in stock price and
profitsin year to December -99 and revenue growth of 50% which
significantlyoutpaced the industry.
Marketing success in the low-roller segment helped achieve this
result.
This success appears to stem from Harrahs investment in info
technology
Key competitors have focused their investment in facilities
Harrahs early arrival was often usurped by newer, grander,
moreextravagant casinos nearby.
Each Harrahs casino operated and marketed itself independently
from theothers
The managers of each property felt that they owned certain
customers,and customers were treated differently at other Harrahs
properties.
Alternatives:
1. Status Quo
Continue to enjoy financial success. Assumption: Further
investment in
technology/analysis carries risk.
Competitors will eat up the market
2. Continue aggressive investment in information technology
& analytics
Difficult to rebuild a 50-year-old company, with respect to
physical
structures Business intelligence is the core competency of the
company
Hire experts from the BI or IT fieldSolution:
Alternative #2
It has worked well so far: 100% YOY increase in profits and
stock price.
Values to support:
Using exhibit 2b, we calculated average monthly revenue per
customer, which
turned out to be 53. On using alternative 2, we are investing in
IT, BI andAnalytics. As a result we assume that customers have
increased due to this
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