Circus Circus 5 Forces

1
Circus Circus 5 Forces

• Risk of new entry
• Barriers to entry Large investment, compliance
  with Government regulations, Restrictions on
  licenses in other locations
• Power of buyers
• Large number of buyers, but many alternatives and
  few switching costs.
• The role of differentiation, targeting multiple
  buyer groups (strategic groups)
• Excalibur, Luxor

2
Circus Circus

• Existing rivalry
• Few large competitors (consolidated structure)
• Capacity expansion by existing players (Potential
  for cannibalization)
• Room rate competition in Las Vegas
• Mature industry
• Exit barriers
• Substitute products
• Lottery, racetrack
• Broader industry definition cruise, other
  entertainment destinations

3
Macroeconomic environment

• Legal environment
• Extensive regulation
• Economic environment
• Slow economy has repercussions
• Discretionary spending
• Demographic
• Expanding buyer base
• Social
• Changing perceptions of casinos (facilitated by
  company strategies)
• Technological

4
Competitive position and strategy

• Position Not just a casino but an entertainment
  destination
• Looking beyond industry boundaries
• Continuous upgrading strategic intent
• Use of joint ventures
• Business strategy evolves from pure low cost to
  differentiation with low costs
• Catering to multiple strategic groups (growing
  convention business)

5
Mandalay Resort Group

• Cash flow (2nd quarter) results down from last
  year (only Mandalay Bay demonstrates increase)
• Luxor 28.7 million (30.1 million)
• Excalibur 23.3 million (25.8 million)
• Circus Circus 18.4 mill. (21.1 mill)
• Monte Carlo 21.1 mill. (23.5 mill)
• High end properties versus low tier properties
• Competition from Californias booming tribal
  casino industry

Source Las Vegas Review Journal
6
Update

• 2nd quarter results 2002, demonstrate an upturn
  for key players
• Mandalay Resorts
• New investments, convention center to open in
  Jan., new all-suite hotel tower

7
Opportunities

• Las Vegas gets a boost
• from business travelers
• Convention attendance increases
• Online gambling
• Cryptologic leading licensor of online casino
  software
• MGM Mirage operates online casino in Britain

Source Business Week, Mandalay Resorts
web site
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