SWOT Analysis of MGM Resorts


SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats of a particular company. The SWOT analysis basically gives a break down of a companies strengths and weaknesses, which basically focus on a companies internal factors which are either advantages or disadvantages for the organizations in as far as meeting their targets and the needs of the market they are operating in .The strength aspect is basically the core areas and competencies that the company mileage or advantage in as far as meeting market targets is concerned. Analysis of an organization’s strength ought to be more focused on the customer or the market in general .An organizations strength can only be important and meaningful if they help the firm to make more profit.

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The weaknesses on the other hand basically referrers to the limitations that make it difficult for accompany to implement some of its strategies .The weaknesses ought to be examined and looked at from a customer view point or perspective since they are the bones who see them easily. By a company focusing on the market when analyzing its strengths and weaknesses, non-market related strengths or weaknesses ought to be also keenly looked at. Opportunity is basically an area in which the company can easily capitalize on and make more profits .The threat on the other hand is basically the challenges that are posed by unfavorable market conditions.

The analysis

MGM Resorts International is basically a corporation paradise that is based in Nevada and it brands itself as an international hospitality company.MGM Resort is probably one of the largest gaming organizations if their total revenue is any thing to go by. It runs more than ten properties in Nevada, Michigan and Mississippi. The company had a humble beginning; it basically began by using the name MGM Mirage early in the year 2000, after merging Mirage Resorts and MGM Grand Inc. to become stronger. A round the year 2005, the growth of its non-gaming revenues which include food and lodging began to register more revenues than gaming receipts. One of the biggest threat that the company experienced when the company attempted to diversify .This was seen when the company changed its mode of operation from totally owning and running casinos and resorts, to focusing more on real estate business .Unfortunately, their venture in real estate came at a very bad time because there were a lot of negative activities that could not encourage their business, there was a world economic crisis and other related problems like overbuilding along the strip.

This development led to a very big problem like financial losses and low valuation. The other strength is that they are wild wide. In mid June 2010, they changed the name of the company to its current name; this was done basically for the sake of reflecting their latest strategy of going world wide .The Company licensed its expertise and brand in order to develop hotels and residents that are non-gaming. The last strength is that through their six subsidiary offices world over, MGM Resorts Hospitality is commissioned to do development and management of non-gaming skylofts hotels, Bellagio and MGM Grand hotels in other countries for instance India, Egypt Dubai and Abu Dhabi by the year 2013.

Some of the company’s positive characteristics may include the fact that they are the largest ever merger in the entire industry. They began operating in the year 2000 as MGM Mirage after a merger of over US$6 b and this is considered to be the largest to ever happen in the industry. It is the largest gambling and bating company in the whole world. There are so many other positive characteristics of this company. It is a blue chip company in the sense that it makes a lot of profit and it attracts many other major investors in the industry for instance other big organization like Dubai World show interest in buying stakes, shares and investing in it. The company has resources and room to expand .They expanded their operations by coming up with more hotels, retail outlets and condos in Las Vegas. The company has many opportunities .They have so many favorable environmental conditions that can help the company produce rewards for them if they properly act on them. The company has to act upon some of their many opportunities if they are to make more profits.

The main threats of this company or barriers and conditions which are likely to make the company not to satisfactorily reach its objectives can also be noted. It is known that SWOT analysis does not only focus on identifying a company’s main or core areas of strength and competencies, they also identify some of the opportunities which the company is not taking advantage of because of a few things like may be resources. The company is involved in wrangles with some of its partners and this can be a very big threat to the image of the company. In early 2009,a United Arab Emirates domestic and international investment department  of the Dubai emirate government by the name Dubai world ,made it public that them and Infinity World had filed a lawsuit in court in which they were alleging that MGM Mirage had actually breached their agreement on City Center joint venture.

This was after MGM Mirage filed a report with the United States exchange and securities commission claiming that they were not certain and therefore doubted that they had the ability of providing assurance of their business being in a position to continue with operations steadily. Through Infinity World, Dubai World owns almost ten percent (10%) of MGM Mirage stock and they have also heavily invested in City Center automatically giving them part ownership of city center. Some of the company’s likely problems and threats may also include the fact that they engage in so many deals at the same time which they don’t scrutinize properly and hence running I trouble with some of the shareholders.MGM should avoid changing their name more often, this makes it a bit difficult to market the company.

According to Shay Sayre, p 356 2008 the SWOT analysis concept has sort of gained some substantial acceptance simply because of its simple yet powerful evaluation strategy that helps in development. However, just like many tools for planning, SWOT can only be good if the right information is used to do the analysis. Some of the solutions to MGM problems and strategies that can be employed to avert complications that may arise as a result of overlooking the company’s threats may include acquiring their competition. MGM Mirage should critically analyze their market and their competition and acquire some of their major competitors.

A perfect example is what they did to Mandalay Resort Group; MGM acquired it for close to $65 per share and together with their debts. The negotiations between them at some point had an announcement concerning the Mandalay board turning down the offer on grounds of antitrust fears. They concerned boards of the two companies later on approved the offer after it was revised .MGM Mirage should use this method of buying or acquiring and even assuming the debts of those companies because in the long run they stand a chance to benefit once they have eliminated competition.

 MGM should aim at owning and operating more casinos particularly in markets that they have not exploited in far flung places .Another area that they should heavily invest in is in the non-casino kind of resort projects in far flung place that have never had such concepts of across the world. MGM should basically expand its portfolio to cover more interests in the market .The company should also attempt to tie its strength and weaknesses on the demands and requirements of the customers. By so doing, they will be in a position to note the company’s strengths particularly those that are only related to customer satisfaction because those are the main areas that the company can capitalize on and make more profits.

The SWOT analysis of MGM shows that the company has many opportunities that they can develop on. By analyzing a company and coming up with its profile showing its SWOT analysis can be very crucial and such a big resource for the company executives .This can be also of great importance to any person who is in a harry to understand more about the company. The analysis report uses a wide range of sources; the information is analyzed and put forward in a way that is easily accessed. MGM   in a bid to overcome some of its threats, it should also try and get major stake in other properties not just in the areas they are operating but related industries to boost their returns. Other than heavily investing even more in what they already have like their main property the City Center which is in Las Vegas, they should strive to have a major presence in other continents and especially bigger markets like china and Japan.

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