Marketing Strategy

Case 3

Harrah's Big Database Gamble

1. Analyze Harrah's using the competitive forces and value chain models. As the case points out, Harrah's is facing stiff competition. This competition is coming from traditional competitors (Las Vegas and Atlantic City), as well as from new entrants (riverboats and Indian reservations). Customers have many options in terms of how, when, and where they gamble. These same customers can elect to take a trip to the beach, as opposed to travel to a casino. When performing a value chain analysis, it appears that Harrah's is using its new business strategy to create a new service, enhance product penetration, and lock in its customers. Harrah's new information system is having a strategic impact on its operations, sales and marketing, and service activities. 2. Describe Harrah's business model and business strategy. How do they differ from those other gambling companies? Harrah's business strategy is a customer relationship management strategy. Essentially Harrah's is successfully competing by “knowing” its customers. Harrah's uses its technology to identify, track, and cultivate its profitable customers. Harrah's Total Rewards program allows Harrah's to gather important information about its customers, as well as reward its customers for the amount of time that they spend gambling at Harrah's casinos. Harrah's competition relies on fancy casinos, extravagant rooms, and entertainment. In contrast, Harrah's is getting to know its customers by studying and analyzing their behavior. 3. What role has database technology played in Harrah's strategy? How critical is it to the success of the company? Database technology is central and critical to Harrah's strategy. Harrah's database tracks information about Harrah's customers, including gender, age, home location, favorite games, length of playing time, size of bet, number of bets, average size of the bet, and total points. Harrah's uses information gleaned from its business processes to...