1. INTRODUCTION
Background and marketing positioning of the Venetian Macao
This project will be about this largest casino in the world at 500,000 sq ft (46,000 m2). The Venetian Macao is a Renaissance Venice-themed luxury hotel and casino resort in Macau, China owned by the Las Vegas Sands corporation. The Venetian is a 40-story, .4 billion anchor for the 7 resort hotels which are under construction on the reclaimed Cotai Strip in Macau. The 10,500,000-square-foot (980,000 m2) Venetian Macao is modeled on its sister casino resort – the The Venetian in Las Vegas – and is the largest single structure hotel building in Asia and the third-largest building in the world.
The main hotel tower was finished in July 2007 and the resort officially opened on August 28, 2007. The resort has 3000 suites, 1,200,000 square feet (111,000 m2) of convention space, 1,600,000 square feet (149,000 m2) of retail, 550,000 square feet (51,000 m2) of casino space – largest in the world – with 3400 slot machines and 800 gambling tables and a 15,000 seat arena for entertainment/sports events.
Spurred by gaming revenue, the city’s GDP growth for the year will exceed 20%, according to government projections. Macau’s tourism industry is growing so fast – 26 million visitors are expected this year, and 30 million in 2008 – that the city’s transport network has reached a breaking point.
2. FOCUS OF THE STUDY
2.1. Case study topic
This topic studies the strategies employed by The Venetian Macao, in particular their marketing, operations and strategy, and develops recommendations for further enhancement. In this project, I will provide an analysis on the marketing strategy based on their segmentation, targets and positioning as well as the types of marketing strategies developed and used by Venetian Macau and explaining how it has contributed to the growing visitors and increasing profits. After which, details about on how effective implementation of strategic management and operations work hand in hand with strategic marketing to achieve success in corporate mission and objectives.
2.2. Objectives of this case study
This project study aims to examine how well I can apply the knowledge I have learned from some of my BBA studies and integrate them to provide details / knowledge and basis for recommendation to management who read this project case study.
The references accessed as far include :
‘The Cotai Strip’ viewed on 9 Sept 2008,
http://en.wikipedia.org/wiki/Cotai_Strip
‘The Venetian Macao’
http://en.wikipedia.org/wiki/The_Venetian_Macao
‘Air Macau gambles on tourism boost’
http://www.travelweeklyweb.com/article-5095-airmacaugamblesontourismboost-TravelWeekly.html
‘The Venetian Arena’
http://www.macaukiosk.com/Venetian-Arena.php
‘Macau Government Tourist Office’
http://www.macautourism.gov.mo/en/
‘Macau Casino lays claim to be the world’s largest’
http://www.turkishpress.com/news.asp?id=138963
‘Las Vegas Sands to open Casino in Macau’
http://www.casinoredvegas.com/news/las_vegas_sands_to_open_ca.html
‘Macau becomes world’s top casino draws’
http://sg.biz.yahoo.com/061025/1/44aca.html
‘Macau Grand Prix’
http://www.macau.grandprix.gov.mo/gp/55/news.php?kind=gp55&lang=en
2.3 Strategic Marketing and Operations
Indeed, strategic marketing and its operations are ideally developing and refining its approach and contribution to domains of corporate strategy within operations management success and that Venetian marketing will be extending their strategic practice by strengthen tourism business focus by allowing to have a market led strategy for such customers to look up to (in, Day, 1990; Webster, 1994; Best, 1997) while Venetian Macau in operational functions will have to pursue an increasing involvement for a better management resource and means.
There is better opportunity for Venetian Macau for their strategic direction that can be supported by such model presented by Michael Porter within ideal strategic value, the Porter’s 5 forces framework along with applicable contribution that may suggest strategic business upon demonstrating competence levels within positive ability to distinguish Venetian operational effectiveness and strategy and that, Porter claims, (1996) the quest for productivity, quality and speed has spawned such remarkable number of management tools and techniques even though operational improvements were dramatic to translate strategic gains into sustainable profitability within the Macau project. From the interest of marketing decisions within context of strategic planning and implementation as well as operations technology and that, the contribution to Venetian Macau strategic planning into practice can be described: (in, Sweeney, 1991)
- to minimize business potential
- to provide credible support to the business strategy
- to develop sustainable competitive advantage
Thus, the role of operations management is to contribute to value by structuring its activities such that their decisions maximize the impact of the value driver influence. Tourism-based technology can be effective for the Macau project as there offers marketing opportunities in lowering differentiation costs of such capabilities to realize market segments and mix upon setting up valid economies. Venetian Macau in such materials requirements planning and materials resources planning can enhance cost profiles simply by lowering the overall costs of inventory at all stages of manufacture as well as improving efficiency. Distribution requirements planning will extend this materials productivity and offer the opportunity to extend and improve logistics customer service. Venetian in lieu to corporate strategy must provide a framework for guiding the selection, development, and exploitation of these capabilities. Since many of the capabilities with the greatest competitive value reside in a company’s manufacturing organisation, corporate strategy must become much more explicit about, and reliant on manufacturing considerations than in the past (Hayes and Pisano, 1994). Marketing is seeking to respond to customers seeking standardized products, ideally in volume quantities. Operation focuses on high volume production with stringent cost controls.
Porter’s Five Forces
Rivalry is considered to be the strongest and most important force in Porter’s model. It represents the presence and number of firms competing for each other’s economic profits. The level of rivalry in an organisation can be described as low or high. This is mainly due to the presence of several competing companies. Moreover, rivalry level increases because of product and service differentiation inadequacy. For instance, the competitors of Venetian Macau can be noted as very aggressive in making innovative moves so as to increase sales and market share, also targeting similar market segments, making the level of rivalry even higher.
The threat on entrants is highly dependent on the presence of factors known as barriers of entry. Basically, barriers to entry could increase or decrease the chances of new businesses offering products that could rival those produced by existing companies. Naturally, if the barriers are high, the threat on entrants will be low due to risks of decreased market share potential. There are several examples of barriers to entry. These include government regulations, trade restriction and inaccessibility of major distribution channels. For the Macau project, the entrant factor can be considered as fair due to a number of reasons. One of which is the fact that operating such business demands a considerable capital. A great deal of capital will not only be necessary for putting up the business itself but also in acquiring the best professionals and technology for product development as well as marketing, entering the same industry and competing with existing tourism approach can be difficult due to customer loyalty and strong service preference factors.
This aspect of Porter’s five forces pertains to the power of the buyers over the manufacturer or the company, Macau assessment is based on the nature of buyer power sources surrounding the company. In particular, the demand for the products produced by the company is reduced due to a number of economic factors. As these factors are difficult to predict, the demand can then decrease at any point. In addition, due to several competitors, products and services offered to consumers are undifferentiated.
The power of the suppliers with the company is fair. This is because supplier concentration for tourism industry needs is low. Some music industry can deal with other suppliers for its production. Considering that Macau is to recognize tourism value upon supporting quality services several suppliers will be very willing to supply goods to the Venetian and should also note that healthy relation with suppliers is as important as those with its customers. So as not to affect the quality of its products, it is imperative that the company refrain from changing one supplier to the next.
The business industry is highly competitive as operating in fierce business environment wherein some business are producing and offering similar services to the people at Macau with same target markets in position thus, making the level of substitutes high for the tourism business industry.
Business model is an integrated and coordinated set of actions Venetian Macau may utilize to gain a competitive advantage by exploiting core competencies in strategic markets (in, Rindova and Fombrun, 1999) as only businesses that continuously upgrade their competitive advantages over time are able to achieve long-term success with their strategy and implementation. Choosing the appropriate business model is intended to create differences between the industry’s positions relative to those of its rivals (in, Drejer, 2002). To position itself a firm must decide to whether it intends to perform activities differently or to perform the different activities as compared to its rivals. The presence of consumer behavior is perhaps one of the most interesting aspects of marketing because it deals with the individual character of consumers. It is basically the buying behavior of the final consumers which are the individuals and households who buy the goods and services offered in the market for their personal consumption (in, Kotler et al, 2001). The main concern in marketing in relation to this aspect is whether consumers actually respond to the marketing strategies employed for the product (in, Ruskin-Brown, 1999) which also gives raise to the model of consumer behavior within which most market researches circle around.
Model of Consumer Behavior
Aside, the use of promotion is indispensable in the process of marketing a product or services to the customers. Through the various promotion strategies, one is able to acquire as well as retain customers. The means to achieve an effective promotion strategy does not necessarily imply a high cost. This is because of the fact that there are also inexpensive means to realize an effective promotion strategy. Nonetheless, the cost of promotion strategies would significantly influence the project and having a huge amount of budget will definitely have an impact on the choice of promotion strategies of a company. According to Lewis (in, 2001), promotion strategies can be used in such as way that the companies are able to address the different problems created by e-commerce business transactions. For instance, the inability of customers to find the web page of the company can be addressed through the aspect of promotion. In particular, companies can use promotions that give the web site address.
The Venetian then, may require unlocking their true potential by optimizing better financial performance, improving their service delivery and or auditing business operation policies for a more suitable market dominance and in a way, there has to be execution of specific market approach such as those improving their marketing operation in support for business to business and business to customer paradigms respectively. There can be such goal of enhancing client experience at Venetian Macau such as:
Management Support and Direction – via visits, telephone conference calls, modem link as well as marketing audits
Business Reviews and Support – via visits, analysis and reports that consider financial information with PR, Promotional, Sales and Marketing initiatives
Training and Development – instigating and monitoring spa specific appraisal, training, certification and development programs for hotel personnel
Recruitment – Assisting with appropriate recruitment services to enhance service delivery
Training Aids – establish effective tourism ways, the highest tourism standards and efficient and maintain tight budgetary control
First, determine what elements will be covered and in what depth including staff time and the observed change secondly, setting up timeline, identify who will be responsible for outcomes and determine an evaluative method of tracking the audit process so that it does not bog down in side issues. Finally, arrange analysis of Venetian Macau environment within which entity exists, including customers, suppliers and its competitors, concurrent with analysis of Venetian Macau strengths and weaknesses. There must be clear concept of the readiness to undertake such activities which will evolve from such business process and it is imperative to identify potential customers. Thus, business marketing begins with research into management and customer expectations, preferences as well as behavior of Venetian Macau’s target client group, the potential clients as well as the existing clients.
Products and Services – the products and services offered by Venetian Macau is essential to the needs of the clients providing better means of enjoyment and relaxation
Place – Venetian Macau may have high standards in all operations so that guests can feel that their visit is both memorable and effortlessly revitalizing as there is massive investment program, the need to cut down costs and prices in catering to those potential customers with modest incomes in order for them to afford with services offerings.
Porter’s framework is an opportunity for Venetian Macau to understand the holistic range of driving forces in the micro environment, which can be linked to macro analysis and enable full SWOT analysis to be developed.
SWOT
One useful method of presenting Venetian Macau information in way that ensures evaluation is to perform SWOT analysis as there allows Venetian Macau management to signify the decision’s relevance to the organization is it something to build on, to eliminate, to anticipate and something to outmaneuver well. The SWOT analysis will provide enough awareness for Venetian Macau and its business management operations implying relevant points for their resources as well as market approaches and processes in order to stay in shape and in control of their business environment.
Table One: SWOT Analysis
Strengths
Strong customer-based Operation and Services
Better business standards and disciplined approach towards increased indication of sales and profits
Weaknesses
Reliance on effective hospitality and tourism market
Reliance on technology
Problems in certain global operation strategy stance
Opportunities
Execution and growth in human resource activities
Deliverance of innovative services for casinos and other leisure programs
Ideal avenue for tourism sustainability and effectiveness
Threats
Presence of tourism business risks and issues
Rising hotel prices and high service charges and costs
Slow sales and profits due to competitive markets
Business operation regulations have strict norms to achieve
Venetian Macau presence provides it with widespread brand recognition and strong customer base. The significant rise in revenues and profits provides the company with strong financial base and enables it to undertake new business opportunity. Venetian Macau must be aware of competition and maintain its good business performance if it is to keep such status to their clients mostly, day customers and residents. The role of marketing information in such business to business and business to customer can be vital in conducting and analyzing the market. In order for Venetian Macau marketing plan to be executed effectively and marketing orientated and customer focused approach to decision making taken, Venetian Macau will need to apply appropriate marketing communication tools in order for them to relate well to potential clients as such it can be through online advertisements and other ways.
3. EXPECTED OUTCOME AND SCHEDULE
3.1. Outcomes to Achieve
To put what I have learned from my BBA course into practice, together with my research data / information into this project. At the end of the day, readers who read my project should understand and gain knowledge and/or information regarding The Venetian Macao and how strategic management and marketing strategy assist them to successfully operate this world’s largest casino in the integrated resort capital of Asia, Macau.
3.2. Intended Table of Contents of Project II
· Introduction : Explains the focus of the case study; it comprises the introduction of The Cotai Strip and The Venetian Macao; the methods and sources used to collect data;
· Orientation: origins of The Venetian Macao; how it became involved; what it did; why the focus is important to them; benefits of casinos to Macau’s economy and tourism.
· Key activities, processes and events of The Venetian Macao: Strategic marketing; strategic management and operations.
· Key learnings :
· Conclusion :
3.3. Planned Schedule: Approximately 6 weeks from 22 September 2008
4. PLANNED METHODOLOGY
4.1. Primary data – interviews with personal friends who travel frequently to Macau for business and leisure
4.2. Secondary data
· newspaper articles
· web-based case reports about Macau, The Cotai Strip, The Venetian Macao, Sands, and Macau tourism
· Published case studies (books or journal articles)
5. SIGNIFICANCE OF THE STUDY
Strategic marketing and operations is a crucial drive for Venetian Macau to achieve business position which can be known to the tourism industry. The significance of this study is to create such ideal points within the micro and macro environment wherein Porter’s five forces model and SWOT are used along with strategic analysis domains. There is significance to the team involved in the project as identifying such mix and market segments must be competitive and effective for strategic contribution know how. Accordingly, the ability of the business to meet the needs of their target market is an important aspect of marketing strategy and their marketing function to remain competitive in the Macau tourism market. Obtaining customer satisfaction encourages clients to patronize the services of Venetian Macau. While this is essential, there must be able to implement unique and distinctive marketing and business strategy to maintain competitive position strategically. Considering the existence of many business facets, it is important that several studies stress this context of investigating the strategic marketing and operations in practice. The outcome will be helpful for different hotel industries especially within the beginning stage. In addition, there is significant in terms of helping management and marketing students, marketing managers to know the importance of having distinctive and effective marketing strategy and will be beneficial to the business environment since the research will support previous claims that marketing strategies can help certain business to have competitive position in global market thus, allowing Venetian management team to integrate effective marketing operation strategies ideal for keeping loyal partners and customers.
6. CONCLUSION
Therefore, strategic marketing and operations plays a vital factor for Venetian Macau project that may determine stability of business both from the corporate side and the stance of marketing strategy will take ample account from within the strategic nature within business forces to fully understand what is shaping the hotel industry for tourism growth. Moreover, when developing sustainable strategic advantage, Venetian Macau needs to understand its competitors and the nature of the competitive environment. SWOT and Porter analysis provide better strategic approach into Venetian business encounter to be aware of certain potential threats within the marketplace or the industry’s potential profit. It provides framework to investigate the competitive environment through number of micro factors, and enables industry attractiveness to be measured and complexity of operating markets understood making it useful.
REFERENCE
Best, R. (1997), Market Based Management, Prentice-Hall International, Englewood Cliffs, NJ
Day, G (1990), Market Driven Strategy: Processes for Creating Value, The Free Press, New York, NY
Drejer, A. (2002). Strategic Management and Core Competencies: Theory and Application. Westport, CT: Quorum Books.
Hayes, R.H, Pisano, G.P (1994), “Beyond world class: the new manufacturing strategy”, Harvard Business Review
Kotler, P (1997), Marketing Management: Analysis, Planning, Implementation and Control, 9th ed, Prentice-Hall International, Englewood Cliffs, NJ
Kotler, P., Armstrong, G., Saunders, J. and Wong, Y. (2001). Principles of Marketing, 3rd European edition. London: Prentice Hall/Financial Times.
Lewis, E. (2001). Building a model business. New Media Age, 37. Retrieved January 16, 2008.
Porter, M.E. (1980), Competitive Strategy, The Free Press, MacMillan
Porter, M (1996), “What is strategy?”, Harvard Business Review
Rindova, P. and Fombrun, J. C. (1999). Constructing Competitive Advantage: The roles of firm constitute interactions. Strategic Management Journal, 20: 691-710
Ruskin-Brown, I. (1999). Mastering Marketing: A Comprehensive Introduction to the Skills of Developing and Defending Your Company’s Revenue. London: Thorogood
Sweeney, M.T (1991), “Towards a unified theory of strategic manufacturing management”, International Journal of Operations and Production Management, Vol. 11 No.8
Webster, F (1994), Market-driven Management, Wiley, New York, NY
Credit:ivythesis.typepad.com
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