Case Study Analysis
Desert Palms Hotel and Casino has a great potential in growing and expanding. Having Robert Hoffman as its general manager gives the company edge over other competitors due to his management abilities and skills that he gained through years of hard work. The plan of establishing a water park can increase revenues but it can also create cost in terms of investment. Capital and cost should be taken into consideration when making decisions because these two factors can affect the overall profit of the company in the long run. The lure of gambling to young people should also be taken into consideration since the water park will most likely cater families with children (Pearce and Robinson 2008).
Development and Analysis of Alternatives
Three alternatives are established: 1) to continue establishing a water park, 2) to intensify advertisements, and 3) to work on additional amenities for the company.
Establishing a water park in the area is a good move to gain more customers by taking advantage of the climate in the area. It is also a good way to increase revenues by acquiring more customers especially families who want to have enjoyment and relaxation. Having two kinds of services in one place is like taking advantage of a service package. It saves time and cost for families because parents can take pleasure in playing casino while their children can enjoy in the water park (Pearce and Robinson 2008). Increase revenues due to sales in food and lodging can also be attained. However, getting young people in gambling may arise due to the fact that the water park and the gambling area are just beside each other and it might not be a good influence for young children to be near gambling places like casino. Lastly, the fact that the company has just started to boost its revenues might give them difficulty in sustaining the expenses needed to establish the water park (Pearce and Robinson 2008).
Intensifying advertisements instead of pursuing the water park project may also be a good alternative since it saves the company a lot of money. Instead of spending money on water park construction, the company can allocate more of it for advertisements in low-market places like Texas and New Mexico. New ways of advertising in radios, television, magazines and newspapers can be done to gather more customers and disseminate promos easily (Pearce and Robinson 2008). The disadvantage of it is that it does not guarantee the level of increase of customers for a period as well as the level of change in profits
The third option that includes additional amenities for the company has the advantage of improving the overall performance of the company in terms of additional services that it can render like spa salons, billiard rooms, coffee lounges and many more. With a smaller capital, the company can improve its services and invite more clients to come and experience not only the casino but also the other services that guarantee satisfaction. However, the increase in number of services also requires an increase in the number of workers and payroll cost for the company (Pearce and Robinson 2008).
Recommendation and Implementation
The best way to solve the problem is to align the survey results with the established alternatives. Customers’ opinions are important and it is better for the company to align its decisions to it (Pearce and Robinson 2008). Based on the result, more people (people whose ages are 40 and above) disagree on the water park project due to its effects on young people. So, it is better not to continue the project and instead, focus more on advertisements to reach more places where market levels are low and acquire new customers. The company should not focus on promos instead, it should work to improve its services by adding new amenities like coffee lounges, billiard rooms, spa salon and improving its lodging facilities to better cater its customers’ needs. They should also hire more employees for efficient service and make them work in teams to establish teamwork and cooperation. Lastly, tournaments can be launched and enforced through advertisements to attract more customers, recognize those who have good gaming skills and acquire higher profits through registration fees.
Pearce, J. and Robinson, R. (2008). Strategic Management. McGraw-Hill.