Good Case Study About Rebel Casino Management
The Rebel Casino is located in suburban Las Vegas. Over the years, the casino management has been challenged by the ability to improve their performance. The management main goal and objective is to improve the casino performance irrespective of the tough economic and competitive conditions. For the last three years, the revenues of the casino have been declining while the earnings have been stagnated. As a result of unfavorable conditions, the company has hardly raised funds for capital improvement. Therefore, the casino is left with an option of developing operating efficiencies as a way of improving earnings. In addition, keeping customers was crucial to Rebel Casino because declined marketing budgets had lessened the probabilities of business to acquire new business. As a result, like much other businesses in Las Vegas, the Rebel Casino was striving to utilize the scarce resources to earn more.
Rebel Casino’s organization structure, which was based on division by department was also facing challenges. Considering the competitive nature of executives in the casino, the organizational structure resulted in some challenges. The issue is facing the casino’s general manager, Anton Frederick involves most of his team and corporate office. For instance, the business incurred $3 million annual loss as a result of the economic downturn, which made the company outsource the management. However, troubling issues emerged subsequent to the outsourcing. The company faced complaint of atmosphere, food quality, and poor services, which were anticipated to tarnish the brand image of the firm. Therefore, the casino needed to make strategic moves on where the restaurants would operate “internally or contracting with a different restaurant company” (p.48). Fredrick’s first thought was to implore the ideas of the top executive.
Rebel Casino has a strong management team that is very experienced. General Manager, Frederick considers it as a great asset to the casino.
The casino’s organization structure is based on division of departments. In rebel casino, departments defined major areas of business activity, for instance, hotel, table games and slots.
Rebel Casino was owned by Nevada Gaming Corporation. NGC also owned the land surrounding Rebel Casino; therefore, there was space for expansion of Rebel Casino’ gaming or non-gaming. The land offered parking area for the casino.
Rebel Casino had a sound security since they owned security force. Therefore, local crime was not an issue even at night property was safe.
Rebel Casino was large enough to accommodate a significant number of customers. The resort offered 500 hotel rooms.
Gaming and Non-Gaming facilities provided a viable competition to competing properties. Rebel Casino also offered same players’ card system.
The five restaurants and hotel’s room services in Rebel Casino were operated by Epic Foods and external Restaurant Management Company, which help in contributing tremendous source of revenue.
NGC incurred a heavy debt balance sheet when some of it properties such as Rebel suffered a drop in EBITDA. This was brought by the potential loss of valuable gaming customers (p.53) and a substantial amount of debt.
Overlap between properties within NGC causing confusion and competition. NGC owned four more hotel-casino in the Las Vegas metropolitan area that led to high competition. The problem of overlapping was not popular among NGC executive, and they could view it at handy excuse for Frederick to explain reasons for shrinking profits.
Contract with Epic Foods did not include Language on standards such as service quality, atmosphere language, and food quality. In the lease Rebel, Casino was afforded little say on the quality of the dining experience.
Rebel Casino has a future in expansion of gaming and non-gaming facilities since they owned the land surrounding the casino.
Economic rebound due to economy increase in Las Vegas. L as Vegas obtained very profitable casinos management contracts with successful Indian gaming properties. The contracts provided an incredible cash flow boost in an economy.
Redesigning service standards to keep existing customers, for instance, Wayne was aware of the complaint issue with Epic Food on quality. She knew that there could be possible brand damage and a potential loss of valuable gaming customers. Therefore, Rebel Casino started a Director of Leased Services who served as a liaison to Epic Food.
Current economic conditions were a threat in Las Vegas, and most of LVG’s competitors were struggling to maintain current levels of profit.
Competition for from properties in a competitive set, this was an internal competition that was in Rebel Casino after being owned by NGA.
Another threat was Rebel Casino losing players to competing properties. For instance, to those four more hotel-casino were open in the Las Vegas. The casinos resulted in internal competition since everything was common.
Low Marketing budgets for acquiring and keeping customers was a threat to Rebel Casino this is because of losses that the casino was incurring.
According to Frederick, the company cannot continue operating under the traditional management. He suggested that it was challenging for Rebel to make a profit from their restaurant and to operate with external restaurant management companies. The traditional management of Rebel Casino has been operating under the external restaurant management with Epic Foods. The advantage of this management strategy is that it allows no transition from the external management team to the internal management team. Although the move to terminate contract with the Epic would be satisfactory to many, this implies that there would another transition process to establish a relationship with a new company. Therefore, starting a new partnership would bring new challenges to the company. According to the Rebel’s V.P. of marketing “no contract language will change the stripes on that tiger. They are who they are, and they have shown us who they are” (p.56). This implies that shifting to a new company for a new contract will not change a thing, and the property will continue experiencing the same or even worse challenges. In addition operating under external management with Epics, Food relieves responsibilities of the management and hence giving them more time to make strategic moves.
However, sticking to the casino’s status quo, that is, renewing the contract with Epic Food, would imply that the company will continue losing revenues and customer, as well as declining of the brand image. Therefore, it is important for the company to avoid renewal of the Epic Food contract so as to avoid previous challenges. Despite the transition process and anticipated challenges from a new partnership, Rebel casino can enter into a new contract. Advantage of this contract is that it will allow the business to reduce the multi-million operating loss. However, this partner should have a common goal of enhancing the customer experience within the organization. As a result, this would be a strategic step to protect the Rebel’s reputation. The disadvantage with Epic’s contract is that this company had grown too fast, hence making it hard to serve its client base effectively. Therefore, it is significant to establish new contracts with the external company because fresh restaurant themes will be integrated with the property. Other alternatives would be evaluating the Kennedy Gaming’s hybrid restaurant model and consider whether it offers a viable solution. Also, the management might engage in groupthink to offer ideas that can provide a sound alternative. However, these alternatives could lead to less than, Therefore, after reviewing the advantages and disadvantages of the status quo, it is significant for property to terminate the contract with Epic Foods.
The company should develop strategies that can improve the standards of quality, services, and the atmosphere. First, the company has to take advantage experienced management team, which is considered as asset for the company. Therefore, this management team is in a position to recruit new employees and to train the existing ones on the issue of customer service improvement initiative. Training should focus on the perspective of the customer service such as including play scenarios and strategic methods to maintain composure and professionalism. This is to ensure that their employees are enthusiastic, willing and friendly enough to serve customers with professionalism. In additional, the management can incorporate the lean principle to increase the value to their customers. For example, the Rebel Casino can develop a website where it can interact with their customers and respond to their request for improvement. In this way, the Rebel management can identify and understand the needs and preferences of their clients. However, although this solution is anticipated to increase the number of customers, the casino will require raising substantial funds to cover the expenses.
The property can also improve the standards of quality, services, and the atmosphere by entering into a contract with a new company. However, the Casino must identify the weaknesses that resulted in the failure of the partnership with Epic Foods. For instance, the management can focus on the weaknesses highlighted in the SWOT analysis to ensure that quality services are delivered to the clients. The management should consider that when signing contract with Epic Food, they did not include Language on Standards such as quality, atmosphere language, and food quality. As a result, the Rebel’s supervision on the quality of the dining experience was constrained. Therefore, it is important to insert a clause in the new contract that allows the property to supervise on the quality of the food offered. As such, the company can be able to solve the problem of complaints on atmosphere, food quality, and poor services. Though new partnership and enhancing customer service, the property can mitigate, this problem builds a reputable brand image. As a result, the company is anticipated to increase the customer base, increase revenue, avoid losses, and gain competitive advantage over their competitors.
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