Dakoda Davies and Dan Price

Executive Summary

4/27/16

Wynn Resorts

Introduction:

Wynn Resorts has been established for 14 years and in recent news has been in some

trouble. The company’s market value has dropped dramatically and revenue is at an all time

low. Wynn has been able to capitalize on several opportunities and has created advantages in

their industry. However, Wynn has also developed some issues within their company that has

lead to new strategies that need to be considered in order to be successful in moving forward in

the industry. Wynn Resorts stock price has dropped 40%. Moving to a new market

(Massachusetts) has created lawsuits in the area to potentially overturn Wynn’s casino license

in Boston. Resulting in Wynn, pushing back the completion date to 2018. Government

crackdowns in China by President, Xi Jinping have affected Wynn’s ability to provide for their

customers. Thus, Wynn needs to implement strategic and critical strategies that will continue to

attract customers and increase revenue.

History:

The casino industry has been able to capitalize on the consistence of repeat customers and the

overall experience with land based activities. Wynn Resorts has created their reputation

specifically on the extraordinary experience within their results. Wynn Resorts was established

on June 3,2002 by Steve Wynn, current CEO for the company. Wynn resorts include integrate

accommodations and amenities, including fine dining, retail offering, distinctive entertainment

and convention facilities. Wynn currently markets in two segments: Macau Operations and Las

Vegas Operations. The company owns 72% of Wynn Macau, which operates an integrated

resort in the Macau Special Administrative Region of the People’s Republic of China. Wynn

Resorts also owns 100% of and operates an integrated resort in Las Vegas, Nevada.

Wynn Resorts customers are anyone that is above the age of 18 years old in the United States.

In China, customers are anyone 21 years old or older and for travelers (tourist) must be 18

years old. Wynn’s customers are anyone who fits the age criteria and are consumers seeking

for luxury services with personal service capabilities. The customers’ needs in this industry are

to enjoy entertainment, fine dining and retail offerings in a luxurious environment. Customers

are seeking incentives for choosing such entertainment outlets over another. Wynn addresses

these needs by marketing the resorts directly to gaming customers using database marketing

techniques, as well as traditional incentives. Such services include reduced room rates and

complimentary meals and suites. Wynn’s reward system offers discounted and complimentary

meals, lodging and entertainment for their guests.

Vision/Mission Statement:

Wynn’s vision statement is as follows: Our resorts are designed, built and operated to

provide a premium experience for our guests. Our business is dependent upon repeat visitation

from our guests and we believe superior customer experience and service is the best marketing

strategy to attract and retain our customers. Our company heavily emphasizes human

resources and staff training to ensure our employees are prepared to provide the luxury service

that our guests expect. We also create general market awareness for our resorts through

various media channels, including social media, television, radio, newspapers, magazines, the

Internet, direct mail and billboards. Wynn’s vision statement clearly addresses what they want

to become within in their industry. Wynn emphasizes the importance of the overall experience

that their consumers are receiving from their facilities. This vision statement provides Wynn with

a foundation for developing a comprehensive mission statement.

Wynn’s mission statement is as follows: We believe that Steve Wynn is the primary

designer, developer and operator of destination casino resorts and has developer brand name

status. Mr. Wynn’s involvement with our casino resorts provides a distinct advantage over other

gaming enterprises. We integrate luxurious surroundings, distinctive entertainment and superior

amenities, including convention facilities, entertainment, fine dining and premium retail offerings,

to create resorts that appeal to our international customer base. Wynn’s mission statement

clearly addresses the company’s reason for being and answers the question “what is our

business.” Wynn’s mission statement is essential to effectively establish objectives and

formulate strategies in their organization.

SMART Objectives:

SMART objectives stands for: Specific, Measurable, Attainable, Realistic and Timely.

This allows companies to achieve objectives and operationalizing the company’s mission. Both

Macau Operations and Las Vegas Operations compete with other high-quality casino resorts.

The casino industry is highly competitive. Resorts that are located on or near Wynn’s properties

compete on the basis of overall atmosphere, range of amenities, level of service, price, location,

entertainment, themes and size. Wynn emphasizes to differentiate their resorts from other

resorts by concentrating on their fundamental elements of superior design, atmosphere,

personal service and luxury. Which is exactly how Wynn is gaining a competitive advantage

from their major competitors in their industry.

Current Strategies:

Wynn resorts are designed, built and operated to provide a premium experience for their

guests. The business is dependent upon repeat visitation from their guests and Wynn believes

superior customer experience and service is the best marketing strategy to attract and retain

their customers. The company heavily emphasizes human resources and staff training to

ensure their employees are prepared to provide the luxury service that is expected from their

guests. Wynn’s senior executive team has an average of over 25 ears of experience in the hotel

and/or gaming industries. They also have 125 employees within their design, development and

construction subsidiary, additionally the senior management also have significant experience in

all major construction disciplines. The employees’ decades of experience has assisted in the

success of Wynn Resorts among the casino industry.

Wynn Resort is consistently seeking out opportunities to expand operations and related

businesses within the United States and globally. Recently, the company has begun application

and licenses processes in Pennsylvania and Massachusetts. The company is as well

researching and exploring expansion opportunities in international areas.

STEPLE-Socio Cultural:

Gambling has become a more prevalent issue because it presents the illusion of easy

fast money to consumers. However, gamblers tend to run into some issues when they are

losing their money and not receiving any profits in return. Gambling is mainly consumed within

land based casinos, although purchasing lottery tickets, entering a raffle, online gambling or

making a bet with a friend are also forms of gambling. Two forms of gambling addiction that can

happen are: the person is trying to overcome financial ruins by hoping gambling will attempt to

win a lot amount of money and a person makes risky bets to experience the emotional high that

is associated with the huge risks. An important personality trait that plays a key factor in

gamblers is impulsivity. This character trait can be hard to control and difficult to change in a

person that is possessing addiction with gambling.

STEPLE- Technological:

The trend shift is dramatically shifting towards convenience by allowing consumers of

gambling the option to participate in the comfort of their own homes. Technology is allowing

consumers of gambling the choice to participate online or in land based facilities. According to

the article, Social Casino Market- US player insights 2016, states “As of 2016, 75% of the social

casino audience is now playing on a smartphone; slot games have emerged as the most played

social casino game not just on mobile, but across every platform. Top activities while also

engaging in playing social casino games: 58% is watching TV while playing casino games, 30%

is browsing the Internet, 15% are doing chores, 9% play other games as well, 7% are

commuting, 28% have no secondary activity and 2% is other” (Super Data Digital Goods

Measurement). Supporting that the casino industry is under pressure to implement more

advanced technology into their overall experience and to consider the online gaming as a new

market.

STEPLE-Economic:

Inflation rates can have a huge economic impact on Wynn because consumers are more

willing to spend money on luxurious activities when inflation rates are low. That is because

people have extra money to be spending on such things. Where as in contrast, if inflation rates

are high then people are less willing to spend their money on luxurious activities. The currently

unemployment rate in Macau is 1.7%. According to the article, Macau’s record low

unemployment rate could affect casinos states, “ the bargaining power of casino employees will

keep rising in the coming few years with labor shortages and the demand for labor. Due to a

limited labor supply in Macau, casino operators are expected to face higher labor costs” (Shawn

Bolton). This article gives light to Wynn that understanding the economic situation of their

current locations is key to predicting future outcomes and preparing to address those future

issues.

STEPLE-Political/Legal:

Each new market for Wynn Resorts is crucial that they understand and abide by

regulations, policies, and licenses in each of those locations. Each new location, whether in a

new state or country, has different regulations in terms of licenses and gaming laws. In order for

Wynn to remain competitive in this industry, the company must abide by the rules and embrace

the regulations that have been put into place for the specific location that are catering too.

Government crackdowns in Macau on gaming has lead to uncertainty for Wynn because more

than half of their revenue comes from China resorts (largest location for gaming). The

government’s crackdown is on the amount of money that can be moved out of the country at a

time, in hopes of keeping the money flowing throughout their economy. This has lead to

gamblers “fleeing” because of the intense anti-corruption campaign in Mainland China. Thus,

resulting in Wynn taking a huge hit in terms of their revenue generate.

STEPLE-Environmental:

Huge aspect of regulations is for the secondhand smoke exposure among employees of

casinos. Casino employees injured by exposure to secondhand smoke in the workplace can file

lawsuits under several causes of action, including workers compensation and the Americans

with Disabilities Act, as well as common law theories, such as negligence. An optional licensing

criterion is the Environmental Policy Act, which Wynn is currently holding a license to follow.

The act covers: water conservation, Leadership in Energy and Environmental Design (LEED)

certification, wastewater, solid waster, transportation, and wildlife. Wynn is remaining

competitive in their market by reducing and recycling to give back to their communities.

However, they haven’t made much of an effort to contribute to the environment aspect as a

whole, with the second hand smoke from smokers in their casinos or the chemicals that are

being put into the air from their heavy restaurant usage.

Internal Audit:

Wynn’s core competence is the overall luxurious experience from the fancy dining

services to the extraneous entertainment shows. Wynn has focused on the upper class market,

which has allowed the company to achieve high revenue values and the most bets per table in

the industry. Wynn currently holds more Forbes five-star awards than any other casino resorts

in the world and has more than four-star restaurants than any other resort in North America.

Wynn has the highest end shops around including: Rolex, Brioni, Chanel and much more. Also,

has the highest rated and most expensive clubs in Las Vegas. All of these assets together

create an experience that is more than just gaming.

EFE:

Wynn has three top opportunities that the company could implement. They are as follow:

1. Wynn could take advantage of locational areas that are economically booming to

increase market share and revenue.

2. Further advancing technology abilities to enhance the loyalty point system for their

customers. Which could perhaps enhance the usage of the program and thus bring more people

into their market.

3. Online gaming is an opportunity to create a online following and implement new tactics

via virtually. This could possible give the company a competitive advantage over their rivals.

Wynn has three top threats that the company should be cautious of. The list is as follows:

1. Government regulations are a huge threat to Wynn because it affects how efficient the

company is able to do their job. The regulations could potentially affect the consumer usage and

revenue the company is able to generate.

2. Inflations are a threat to Wynn because it affects the purchasing power of their

consumers. So for the areas that Wynn is involved in, they need to make sure they understand

the economy in order to implement strategic strategies. Thus, they can better project their

standings in the market place.

3. Wynn’s rivals are a threat to the business because if their rivals are adapting more

quickly and staying current with technology changes could result in a huge strain on Wynn

staying competitive in this industry.

Value Chain Analysis:

Primary activities that add value to Wynn Resorts are known as the value chain.

First off, Wynn Resorts is what is an exquisite resort type layout. What differentiates an

exquisite resort layout is the extensive luxury features that are included. Some of theses

features include but are not limited to; award winning spas, unique salons, luxury shopping

of high end brand names, indoor and outdoor resort pools with bar service, and an

extensive concierge team employed solely to help inform Wynn's guests of the latest

entertainment including concert, show, and restaurant news.

An enticing feature of Wynn Resorts is that since it is in the entertainment and

service industry, in order to maintain a competitive advantage they have a variety of

unique clubs tailored for almost any type of person. XS was named the #1 nightclub in the

U.S. by Nightclub & Bar's Top 100 for the past five years. Wynn has maintained this high

regard by investing in the latest pyrotechnics, LED lighting, and laser technology to

accompany the in house disc jockeys. On the floor bottle service is another distinctive

feature that separates Wynn from competition. Surrender Nightclub is a dance intensive

mainstream type club. Encore Beach Club has 26 stocked cabanas for couple or family

getaways. Encore Players Club is tailored towards the gamblers and those who want to

watch sports on big screen televisions. Intrigue is the newest concept by Wynn and is for

the up and coming generation of dance and club life. Again, this is a little overwhelming for

first time customers and that is what the concierge team is truly here for. They will inform

you of all the offerings available and can help you secure the necessary tickets.

Wynn Resorts is in a customer driven industry, there are so many choices , why

choose Wynn? The employees. Wynn has implemented a program that takes very good care

of their employees, keeping the employees happy makes the customer enjoy the visit even

more. The program for employees is called WE life for employees health and well-being.

Wynn offers its employees medical, prescription, dental, and vision insurance. The program

offers 24-hour on-site wellness center access as well as health coaches. There is also a "My

Now Clinic" which provides online health care provider support where you can directly

talk to a doctor and even get diagnosed over the computer. Wynn also guarantees

exceptional service. They promise no hidden fees, easy modifications to reservations, and

exclusive offers.

CEO and Chairman Steve Wynn is the reason why Wynn Resorts is the luxury resort

we see today. According to “The Cantankerous Mr. Wynn” article, Steve Wynn is famously

impatient with poor work, which he finds intolerable. Every little detail counts and Steve

pays attention to each one with an exquisite high end taste and immense concern for his

workforce. Mr. Wynn had a very humble start and turned $20,000 into $3.8 billion. He has

enthusiasm for his work even still at the age of 72, and he knows how to deliver to the

consumers. Being passionate about everything that you do is what keeps Steve Wynn

ticking.

Wynn Macau is located in China and this business environment there is extremely

healthy due to its port location among other factors. To put in perspective the importance

of the Macau business to the value of Wynn Resorts as a whole, I found an article from

seeking alpha that states “the Vegas operations alone have an estimated value of $4.25

Billion while the Macau stake is approximately $9 Billion.”

IFE:

This section represents Wynn Resorts internal factor evaluation. Wynn's strengths

are part of the internal environment and firstly I would like to cover the core competence

of Wynn Resorts. Positioning itself as a high-end, premier, luxury brand is what is at the

core of what Wynn strives at. Customers are willing to pay the highest room rates, and bet

the most per hand in the entire industry.

Steve Wynn has more than thirty years experience in the resort industry. He has

built himself up from a bartender to a manager. He is known as the CEO that is always in

the casino talking to customers and getting to know them. Steve is a leader who knows his

industry and the culture that comes with it, and he understands the importance of using

different strategies to tackle different problems and that is why Wynn Resorts has excelled

thus far.

Human resources is so important to the core concept of Wynn resorts because they

are the employees in charge of hiring other employees. Human resources is such a critical

job for Wynn due to the entertainment and service industry they are in. As stated on their

website, "At Wynn we believe that happy employees mean happy guests." So it is vital for

the employees working in human resources at Wynn to be able to read people and decide

who to hire. Finding the right person to fit the job can be difficult and HR is in charge of

filtering through the candidates. HR is involved in everything from recruitment of

employees to the onboarding and concierge services, and training of employees to planning

employee events and internal communications.

The company embodies great expectations. What I mean by this is that Wynn strives

on providing above and beyond customer service. The experience is supposed to resemble

that of a fantasy. Everything you need is within the resort. However, everything is high end

inside the resort, from restaurants to retail shopping and entertainment services Wynn

only allows the best which can turn out to be quite expensive.

Wynn's competitive advantage is the entire resort experience you receive when

staying there. Wynn has won more Forbes Five Star awards than any other resort in North

America, which is impressive when you think about how many resorts there are in Las

Vegas alone. They have high end upscale shops located right inside the casino , so if you win

big enough go treat yourself to a shiny new Rolex. The combination of all these assets

create an experience more than just gambling or staying in a hotel.

According to the newsletter, Wynn Insider is a unique feature that internally

strengthens its loyal customer base. This program is completely free of hidden fees, offers

exceptional service and exclusive offerings to those who belong, for example the advantage

to get tickets to an event located in the resort before they go to the public. Wynn insider

has many other privileges and information only allowable to its' frequent users.

To keep the competitive advantage alive, Wynn implements outsourcing as part of

its strategy. This outsourcing on specific parts of the overall experience can save the

company money. An example of a fantastic outsourcing opportunity that Wynn took

advantage of was hiring an external company to handle all the parking and valet services.

Parking and valet are not part of Wynn's business, so Steve Wynn was smart enough to

know that he could bring someone in who understands it and can do it better. This allows

Wynn to focus on its core business, and that starts as soon as the customer walks into the

resort.

SWOT:

Strengths

● Core Competence ● Steve Wynn ● Resort experience ● Unique features ● High expectations ● Customer service ● Human Resources

Weaknesses

● New Markets ● Reputation ● Leverage Ratio ● Profit ● Internal power struggle ● Shareholder value ● economy

Opportunities

● Loyalty Point System ● Usage of different platforms ● Online gaming ● Locational Trends Shifting ● Domestic Tourism ● Technology systems ● Property

Threats

● Government Crackdown ● Technology adaptation ● Taxation on Gaming ● Inflation Rates and Taxes ● Government Corruption ● Regulations for the Industry ● Stock Market Price

I want to start here by listing some of Wynn's most important opportunities moving

forward and then move into some of the threats, followed by strengths and then

weaknesses and then ultimately showcasing our strategies to implement. The loyalty point

system implements advanced technology platforms so Wynn can enhance the usage of its

programs and bring more people into the gaming market. They also could focus on the

streamlining of online gaming platforms so that no matter where in the world a customer

might be, if they travel, the platform will be similar. Another important opportunity for

Wynn to look into is locational trends shifting. What I mean by this is being aware of which

economic areas are booming and why? Can we as a business capitalize on this boom? We

could use a market research team to look into this and possibly then take advantage of the

boom depending how the research turns out. Domestic tourism as a whole, take advantage

of where people like to go and set up attractions to make it a destination. We entertain, so

that means we need to continually be up to date with the latest technology systems.

Some of the most important threats to Wynn would be the government crackdown

on gaming in China, due to money laundering. Being able to adapt to constantly changing

technology could be a threat because we do not want to be left behind as an industry. Taxes

and inflation rates are also important threats to be aware of in the resort industry. These

things can affect the purchasing power of customers. Industry regulations like the smoking

laws now do not allow patrons to smoke inside, which means that they have to get up and

leave the table in order to smoke. Restrictions, licenses, and approvals can be suspended or

revoked for any violations.

I have already mentioned the key strengths for Wynn like core competence, Steve

Wynn, and the experience in and of itself, so I am going to move into the most important

weaknesses of Wynn Resorts. These weaknesses include entering new markets which can

be a struggle when it comes to differing economic situations. Also being up to date on the

new gaming laws in different countries and even states domestically. The dropping of our

stock market price leads to a negative effect for investors which could tarnish Wynn' s

reputation. Profit generation has not been good for Wynn due to the constrictions in the

Macau market. Wynn's profit fell 72% when Macau turned from a certainty to a weakness.

Steve and his Japanese business partner have been going through a bit of a power struggle,

and have not been able to agree which could also damage the Wynn reputation and erase

shareholder value even more. Shareholder value declined 11% after just hours of dividend

cut news.

Implementation strategies:

After reviewing all of these strengths, weaknesses, opportunities and threats we as a

team developed a few strategies to implement. The SO strategy that we implemented for

Wynn was more advanced technological investments in order to service the customer

better. This opportunity would strengthen the experience received by the customer while

attending Wynn resorts. Like stated earlier we are an entertainment business and we need

the latest in high end technological equipment in order to get the biggest positive reaction

by the consumer by giving them something they’ve never seen before.

Another strategy we implemented for Wynn was that of an ST. Since Wynn has such

high expectations for their employees, brand, and the way that they do business in general.

This is a strength, but if employees don't perform and meet these high standards, they

might change their mood and not be as engaged with customers which could damage

customer perception of Wynn Resorts, as well as pressuring our employees too much

which could cause mental health issues. In all honesty this implementation is to

strategically develop a realistic expectation list for our employees.

A third strategy we want to implement is a WO, weakness and opportunity. The

online gaming industry produces a weakness for Wynn, because they are not involved in

the online gaming industry. We can capitalize on our weakness of non involvement in the

online gaming industry by penetrating that market. As a company, Wynn needs to

submerge into developing competitive advantages over others and this weakness provides

a huge opportunity, but not without risk of course.

The final strategy we undertook for Wynn Resorts is a WT. Wynn is struggling to

stay up to date and knowledgeable about new markets. In order to fully implement this

strategy Wynn needs to develop a researching team to advance the way they do business in

new markets (Massachusetts). Understanding that the economy changes (declines and

rises) and understanding consumer purchasing behavior among those economic standings.

Conclusion:

After looking at the current issues at hand with Wynn resorts, we have concluded

that this is an opportunity for Wynn to take advantage of their current situation. To start

off, online gaming is a huge opportunity for Wynn to remain competitive in their industry

and also acquire new market share therefore increasing revenue. With this being said, it is

not easy and there is much research that needs to go into making a decision like this. Wynn

would need to understand how the gaming industry really works, because they are used to

brick and mortar entertainment services. They have established a brand recognition and do

not want to risk ruining it with a poor performing online platform. Since there is a

government crackdown in China, it is very important that Wynn uses this a lesson to take

away how important research is when conducting legal business ventures, especially

internationally. Also, the economy is very important to understanding how a potential

casino would do, due to things that affect the economy like inflation rates. Use the China

crackdown as an example. Moving forward Wynn Resorts needs to implement a more tech

savvy platform if the want to remain competitive in the industry. Internationally and

domestically, Wynn needs a smooth platform that new customers will find attractive and

sticky. The overall attraction of Wynn is the unique “fantasy like” experience customers

receive when they stay at the resort. Continually being able to one-up themselves and the

competition is how Wynn reserves a position in the future of gambling and luxury resort

experiences.

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