Caesars Entertainment SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Caesars Entertainment managers to do a situational analysis of the firm . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Caesars Entertainment is facing in its current business environment.

The Caesars Entertainment is one of the leading companies in its industry. Caesars Entertainment maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Caesars Entertainment to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Caesars Entertainment swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Caesars Entertainment strengths, and eradicate its weaknesses.

Step by Step Guide to Caesars Entertainment SWOT Analysis

Strengths of Caesars Entertainment – Internal Strategic Factors

As one of the leading firms in its industry, Caesars Entertainment has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Caesars Entertainment are –

  • Successful track record of developing new products – product innovation.
  • Good Returns on Capital Expenditure – Caesars Entertainment is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Strong distribution network – Over the years Caesars Entertainment has built a reliable distribution network that can reach majority of its potential market.
  • Strong Free Cash Flow – Caesars Entertainment has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Highly skilled workforce through successful training and learning programs. Caesars Entertainment is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

Weakness of Caesars Entertainment – Internal Strategic Factors

Weakness are the areas where Caesars Entertainment can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • High attrition rate in work force – compare to other organizations in the industry Caesars Entertainment has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Caesars Entertainment needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • The profitability ratio and Net Contribution % of Caesars Entertainment are below the industry average.
  • Limited success outside core business – Even though Caesars Entertainment is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Caesars Entertainment has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Caesars Entertainment is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.

Opportunities for Caesars Entertainment – External Strategic Factors

  • New trends in the consumer behavior can open up new market for the Caesars Entertainment . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The market development will lead to dilution of competitor’s advantage and enable Caesars Entertainment to increase its competitiveness compare to the other competitors.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Caesars Entertainment.
  • New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Caesars Entertainment. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Government green drive also opens an opportunity for procurement of Caesars Entertainment products by the state as well as federal government contractors.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Caesars Entertainment’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Caesars Entertainment in other product categories.

Threats Caesars Entertainment Facing - External Strategic Factors

  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Caesars Entertainment   in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Caesars Entertainment

Limitations of SWOT Analysis for Caesars Entertainment

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Caesars Entertainment
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Caesars Entertainment

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Caesars Entertainment managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Caesars Entertainment

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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SWOT Worksheet & Template

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References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)