Please review the attached file to complete the rest of the assignment. Please edit the existing document (DO NOT CREATE A NEW DOC). As many pages as possible, no minimum nor max. 

THANK YOU! 

Please ask me if you have any questions. 

BAP- MGM

INDUSTRY ANALYSIS

Student Name

Institution Affiliation

Course

Instructor

Date

Table of Contents

Section I- Industry Analysis

3

Industry Classification

3

Size and growth

3
Government regulations 4

Section II- Company Analysis

5

Company profile

5
Industry Classification 5
Size and growth 5

Company profitability

6

Factors affecting profitability

6

Product segmentation

6

Degree of company concentration

6

Price Factors

6

Company Vision; Mission; Guiding Principles

6
External Environment Evaluation Threat of New Entry 6

Power of Suppliers

6

Power of Customers

6

Threat of Substitutes

6

Intensity of Rivalry

6

Identification of Differentiators

7

References

8

Appendices

9

Section I- Industry Analysis

Industry Classification

MGM Resorts International is a world-class company that operates in various cities across the world. MGM Resorts was founded back in 1986 and has since expanded to become a dominant player in the entertainment sector, (Sullivan, 2016). The company is listed under the S&P 500 index and its stocks are publicly traded in the capital markets. MGM Resorts international companies is a key player in the hospitality industry, specifically the entertainment sector. Services offered by the company to its many clients include hotel accommodation services, gaming in casinos, as well as restaurant services. The company boasts of its over 30 unique hotel destinations in various cities. MGM Resorts International has expanded its services and revenues by engaging in acquisitions and strategic partnerships. The company has been rated highly in popular global listings including Forbes and Fortune magazine. Estimates indicate that MGM Resorts International has a workforce comprising of 83,000 employees.

MGM Resorts International operates in the entertainment sub-industry within the large hospitality industry. The services offered by the company are mainly meant for entertainment purposes. The entertainment sector within the hospitality industry is very competitive, especially within Las Vegas. This is facilitated by the low level of consolidation in the industry meaning that fragmentation is very high. Some of the major companies competing with MGM Resorts international in the entertainment industry include Caesars Entertainment, Wynn Resorts, and the Doyle collection. Sands is also a formidable competitor especially within and outside the Las Vegas region, (Sullivan, 2016). Sands company is the largest casino business establishment in the world. The Doyle collection is the only privately owned company among these competitors. The company offers travel and leisure services to a wide range of destinations.

Caesars Entertainment is the main competitor offering casino and restaurant amenities just like MGM Resorts international. It is also a publicly-traded company whose stocks are freely traded in the capital markets. The company was established way back in 1937 and has since developed over the years to become a major player in the entertainment sector. The use of retained earnings for expansion purposes has significantly promoted the company’s success over the years. Wynn Resorts specializes in the development of luxury hotels and resorts that offer golf amenities, casinos, as well as restaurant services. Wynn was established in 2002 but has rapidly expanded to earn a position at the top with other leaders in the entertainment sector. The steady growth recorded at Wynn Resorts can be attributed to the strong financial backing from shareholders in the company. However, selling a lot of stock options in the capital markets may be detrimental to the company’s profitability in the future. The companies have a common strength that makes them formidable competitors for MGM Resorts; they offer similar services with only slight variations at almost similar rates, (Zheng, et.al., 2016).

Size and growth

The entertainment sector generates the largest proportion of revenue in the hospitality industry. China’s Macau region is currently the largest casino and luxury hotel market in the world followed by Las Vegas. MGM Resorts International has established its operations in Macau to exploit new opportunities in the Chinese market. The industry has been expanding gradually since the financial crisis in 2009. The growth led to the realization of revenues worth $110 billion by the end of 2018, (Zheng, et.al., 2016). The financial performance in the entertainment sector within the hospitality industry has been on an upward trend for the last 8 years. The number of tourists who have participated in the gaming activities in Las Vegas rose to 27% in 2018. The projected revenue estimates for the entertainment industry indicate that the revenues will constantly rise to $130 billion by 2021, (Dogru, et.al., 2019). Currently, the annual revenue generated in this industry stands at $113 billion. The majority of companies in this sector, including MGM Resorts international expect to increase their total annual revenues for the next five years. This is mainly because the companies operate in regions that attract a large number of tourists each year. Domestic leisure and business trips are also expected to increase in the coming years thus more revenue generation for the entertainment sector.

Government regulations

The hospitality industry operates under specific legal restrictions and compliance requirements meant to protect consumers from exploitation. Companies operating in this industry are constantly subjected to scrutiny procedures by government agencies. The industry is regulated by government agencies through various legal Acts established. Some of the legislations that regulate the entertainment industry include the Professional and Amateur Sports Protection Act. This legislation protects the customers in the entertainment from exploitation when undertaking sporting activities such as betting in Casinos. The government also formulates a taxation policy that applies to all players in the entertainment sector, (Calcagno & Walker, 2016). All companies are required to report their annual revenues as well as pay their tax obligations. The companies are also expected to comply with assessment requirements. Various governmental agencies also monitor and asses the safety measures in luxury hotels and safety before certification is done. A company that operates without complying to the requirements is subjected to harsh legal actions.

Section II- Company Analysis
Company profile
Industry Classification

Originally called MGM Grand Inc, MGM Resorts has been around since the very beginning of what Vegas is today. MGM Resorts International can fall in two sectors of this industry. While they are a resort they also, can fall under the entertainment and gaming. They technically can fall under the 2 sectors so their competitors come from both. They have to think about competitors that just casinos or just hotel. Also, they have to take in consideration all the other establishments that offer both gaming and stay in one property. Some of these competitors include Caesars Entertainments, Wynn Resorts and The Doyle Collection.

Since it was one of the first gaming resorts in the industry, it is safe to say the company created its niche and paved the way for a lot of its competitors then and today. Like with most things, once a good idea come a long a lot of other people try to profit from by copying the way things are done. While the rise of this specific sector of hospitality grew, so did MGM Resort. Instead of folding to competition they proved that could pivot and adjust with the times accordingly.

For the common folk the name “MGM” is synonymous with Las Vegas because of all the history it has had in Vegas. However, they have had properties all over the world. These properties not only include resorts or casinos but they also created a real estate investment fund. Safe to say that this company has not played it safe since the beginning of their time.

Size and growth

I believe MGM is still around because they knew how to play the industry specifically in Las Vegas before they ventured international. Mergers and acquisitions can either help build your brand or tarnish the name of your brand. While reading on the company I found that have acquired a lot of other properties in Vegas. A lot of time these companies just want to grow so rapidly and do not think of the long term upkeep of expanding a brand. Some companies only worry about expanding instead of finding what works for them the best. A trend I noticed with this company is that while they have acquired a lot they have also, sold a lot. I assume they did this because their acquisitions did not go as planned and instead of losing money it is better to break even or get some money back.

In 2000 MGM made history by acquiring Mirage Resort for a whopping $6.4 million. It was the biggest acquisition in the gaming industry ever. Five years later they would acquire Mandalay Resort Group for $7.9 Billion and the company was known at MGM Mirage. In 2010 the company changed its name from MGM Mirage to MGM Resorts International. Under these acquisitions the companies sold several of their properties. Today, the company has a total of 55,000 thousand employees.

Most recently, the company has opened properties in Macao and in Cotai. Macao is known as one of the most substantial gaming science in the market. However, according to “nasdaq.com”, MGM Macao has been under performing compared to its competitors that surround them.

Last year, MGM Resorts International sold the Bellagio and Circus Circus which were acquired under the Mirage Resorts. Also, as recent as January, they decided to gain more revenue by selling MGM Grand Las Vegas and Mandalay Bay Resorts. MGM Resorts International is obtains over $8 billion in capital. Safe to say that have very big plans in the coming years

Company profitability
Factors affecting profitability
Product segmentation
Degree of company concentration
Price Factors
Company Vision; Mission; Guiding Principles

External Environment Evaluation
Threat of New Entry

Power of Suppliers
Power of Customers
Threat of Substitutes
Intensity of Rivalry

Identification of Differentiators

References

Appendices

Figure 1 Market share. https://www.openpr.com/news/1768620/casino-and-gaming-market-major-technology-giants-in-buzz-again-galaxy-entertainment-las-vegas-sands-mgm-resorts.html

Figure 2Revenue contribution in the hospitality industry –

Hospitality and Entertainment: Industry Introduction