Mckinsey 7S MGM Resorts International Analysis

MGM Resorts International McKinsey 7S Analysis| Assignment Help

MGM Resorts International McKinsey 7S Analysis

MGM Resorts International Overview

MGM Resorts International, founded in 1987 as MGM Grand, Inc., and headquartered in Las Vegas, Nevada, is a global leader in the hospitality and entertainment industry. The company operates through a diversified structure encompassing destination resorts, gaming, and entertainment offerings. Key business divisions include domestic resorts (Las Vegas Strip, regional properties), international resorts (primarily in Macau), and a growing interactive gaming (BetMGM) segment. In fiscal year 2023, MGM Resorts reported total revenues of $16.2 billion and boasts a market capitalization of approximately $14.5 billion as of October 26, 2024. The company employs around 74,000 individuals worldwide.

MGM Resorts maintains a significant geographic footprint, with properties across the United States and Asia. Its international presence is concentrated in Macau, a major gaming hub. The company competes in the gaming, hospitality, entertainment, and now, digital gaming sectors. MGM Resorts’ corporate mission is to provide exceptional entertainment experiences, with a vision to be the world’s premier gaming entertainment company. Core values emphasize teamwork, integrity, and excellence. Key milestones include the acquisition of Mirage Resorts in 2000, the development of CityCenter in Las Vegas, and the strategic partnership with Entain to form BetMGM. Recent strategic priorities include expanding its digital presence through BetMGM, optimizing its real estate portfolio through sale-leaseback transactions (MGM Growth Properties), and pursuing international expansion opportunities, particularly in Japan and the United Arab Emirates. A major challenge is navigating evolving regulatory landscapes in the gaming industry and managing operational complexities across diverse geographic regions and business segments.

The 7S Framework Analysis - Corporate Level

1. Strategy

Corporate Strategy

Portfolio Management: The strategic approach is characterized by a portfolio of diverse assets, ranging from integrated resorts to digital gaming platforms. The rationale behind this diversification is to mitigate risk by operating across multiple revenue streams and geographic locations. This approach seeks to capture value from synergistic relationships between different business units.
Capital Allocation: Capital allocation decisions are guided by stringent investment criteria, focusing on projects with high returns on invested capital (ROIC) and long-term growth potential. A significant portion of capital is directed toward strategic initiatives such as BetMGM and international expansion, indicating a forward-looking investment philosophy.
Growth Strategies: The company employs a combination of organic and acquisitive growth strategies. Organic growth is driven by enhancing existing properties and expanding the BetMGM platform, while acquisitions are selectively pursued to enter new markets or acquire complementary assets.
International Expansion: The international expansion strategy centers on market entry into high-growth regions, such as Japan and the United Arab Emirates, through strategic partnerships and large-scale integrated resort developments. This approach balances the potential for high returns with the inherent risks of operating in new and diverse regulatory environments.
Digital Transformation: Digital transformation is a core strategic imperative, with a focus on leveraging technology to enhance customer experiences, optimize operations, and drive revenue growth through the BetMGM platform. This includes investments in data analytics, mobile applications, and digital marketing.
Sustainability and ESG: Sustainability and ESG considerations are increasingly integrated into the corporate strategy, with a focus on reducing environmental impact, promoting diversity and inclusion, and upholding high ethical standards. These initiatives are designed to enhance the company’s reputation, attract socially conscious investors, and mitigate regulatory risks.
Response to Industry Disruptions: The corporate response to industry disruptions, such as the rise of online gaming and changing consumer preferences, involves proactive adaptation and innovation. This includes investing in new technologies, diversifying revenue streams, and enhancing customer loyalty programs.

Business Unit Integration

Strategic Alignment: Strategic alignment across business units is achieved through centralized strategic planning processes and performance management systems. However, tensions may arise between corporate objectives and the autonomy of individual business units, particularly in adapting to diverse industry dynamics.
Strategic Synergies: Strategic synergies are realized through cross-promotion of products and services, shared customer databases, and leveraging corporate resources and expertise. However, realizing these synergies requires effective coordination and communication across business units.
Portfolio Balance: The portfolio is balanced by allocating resources to both stable, cash-generating businesses and high-growth, higher-risk ventures. This approach aims to optimize overall returns while mitigating risk.

2. Structure

Corporate Organization

Formal Structure: MGM Resorts operates under a hierarchical organizational structure, with distinct business units reporting to corporate headquarters. The corporate governance model includes a board of directors responsible for overseeing strategic direction and ensuring accountability.
Governance Model: The corporate governance model emphasizes transparency, accountability, and ethical conduct. The board of directors is composed of independent members with diverse backgrounds and expertise.
Centralization vs. Decentralization: The degree of centralization versus decentralization varies across different functions. Strategic planning, capital allocation, and risk management are typically centralized, while operational decisions are decentralized to business units.
Matrix Structures: Matrix structures and dual reporting relationships are employed in certain areas, such as technology and marketing, to facilitate cross-functional collaboration and knowledge sharing.

Structural Integration Mechanisms

Formal Integration: Formal integration mechanisms include cross-functional teams, shared service models, and centers of excellence. These mechanisms are designed to promote collaboration, knowledge sharing, and efficiency across business units.
Shared Service Models: Shared service models are used for functions such as finance, human resources, and information technology, to achieve economies of scale and improve service quality.
Structural Barriers: Structural barriers to synergy realization may include siloed organizational structures, conflicting priorities, and lack of communication across business units.
Organizational Complexity: Organizational complexity can impact agility by slowing down decision-making processes and hindering responsiveness to market changes.

3. Systems

Management Systems

Strategic Planning: Strategic planning processes involve setting long-term goals, developing strategic initiatives, and allocating resources to achieve those goals. Performance management systems are used to track progress and hold business units accountable for results.
Budgeting and Financial Control: Budgeting and financial control systems are used to manage financial performance, allocate capital, and ensure compliance with financial regulations.
Risk Management: Risk management frameworks are designed to identify, assess, and mitigate risks across the organization, including financial, operational, and regulatory risks.
Quality Management: Quality management systems and operational controls are used to ensure consistent quality and service delivery across all properties and business units.
Information Systems: Information systems and enterprise architecture are used to manage data, support business processes, and enable decision-making.
Knowledge Management: Knowledge management and intellectual property systems are used to capture, store, and share knowledge across the organization.

Cross-Business Systems

Integrated Systems: Integrated systems spanning multiple business units include customer relationship management (CRM) systems, enterprise resource planning (ERP) systems, and data analytics platforms.
Data Sharing: Data sharing mechanisms and integration platforms are used to facilitate the exchange of information across business units and enable data-driven decision-making.
System Barriers: System barriers to effective collaboration may include incompatible systems, data silos, and lack of integration between business units.
Digital Transformation Initiatives: Digital transformation initiatives across the conglomerate include cloud computing, mobile applications, and artificial intelligence.

4. Shared Values

Corporate Culture

Core Values: The stated core values of MGM Resorts emphasize teamwork, integrity, and excellence. However, the actual values may vary across different business units and geographic regions.
Cultural Integration: Cultural integration following acquisitions can be challenging, particularly when integrating companies with different cultures and values.
Value Translation: Translating values across diverse business contexts requires effective communication, training, and reinforcement by leadership.
Cultural Enablers: Cultural enablers to strategy execution include a strong sense of purpose, a commitment to innovation, and a culture of collaboration.
Cultural Evolution: Cultural evolution and transformation initiatives are necessary to adapt to changing market conditions and maintain a competitive advantage.

Cultural Cohesion

Shared Identity: Mechanisms for building shared identity across divisions include company-wide events, employee recognition programs, and communication initiatives.
Cultural Variations: Cultural variations between business units may reflect differences in industry dynamics, geographic locations, and employee demographics.
Cultural Tension: Tension between corporate culture and industry-specific cultures can arise when business units operate in highly specialized industries with unique norms and practices.
Cultural Attributes: Cultural attributes that drive competitive advantage include a customer-centric focus, a commitment to innovation, and a culture of continuous improvement.

5. Style

Leadership Approach

Leadership Philosophy: The leadership philosophy of senior executives emphasizes strategic thinking, operational excellence, and a commitment to employee development.
Decision-Making Styles: Decision-making styles and processes may vary across different business units, reflecting differences in leadership styles and organizational structures.
Communication Approaches: Communication approaches and transparency are critical for building trust and fostering collaboration across the organization.
Symbolic Actions: Symbolic actions, such as executive visits to properties and employee recognition events, can reinforce corporate values and promote a sense of community.

Management Practices

Dominant Practices: Dominant management practices across the conglomerate include performance-based compensation, data-driven decision-making, and a focus on continuous improvement.
Meeting Cadence: Meeting cadence and collaboration approaches are designed to facilitate communication, coordination, and knowledge sharing across business units.
Conflict Resolution: Conflict resolution mechanisms are used to address disagreements and resolve conflicts in a fair and timely manner.
Innovation and Risk Tolerance: Innovation and risk tolerance in management practice are essential for driving growth and maintaining a competitive advantage.

6. Staff

Talent Management

Talent Acquisition: Talent acquisition and development strategies focus on attracting, developing, and retaining top talent across the organization.
Succession Planning: Succession planning and leadership pipeline programs are used to identify and develop future leaders.
Performance Evaluation: Performance evaluation and compensation approaches are designed to reward high performance and align employee incentives with corporate goals.
DE&I Initiatives: Diversity, equity, and inclusion initiatives are aimed at creating a more diverse and inclusive workforce.
Remote/Hybrid Work: Remote/hybrid work policies and practices are evolving in response to changing employee preferences and technological advancements.

Human Capital Deployment

Talent Allocation: Patterns in talent allocation across business units reflect strategic priorities and growth opportunities.
Talent Mobility: Talent mobility and career path opportunities are designed to encourage employee growth and development.
Workforce Planning: Workforce planning and strategic workforce development are used to ensure that the organization has the right skills and capabilities to meet its strategic goals.
Competency Models: Competency models and skill requirements are used to define the skills and knowledge needed for different roles and functions.

7. Skills

Core Competencies

Organizational Capabilities: Distinctive organizational capabilities at the corporate level include brand management, operational excellence, and customer relationship management.
Digital Capabilities: Digital and technological capabilities are increasingly important for driving innovation and enhancing customer experiences.
Innovation Capabilities: Innovation and R&D capabilities are essential for developing new products and services and maintaining a competitive advantage.
Operational Excellence: Operational excellence and efficiency capabilities are critical for managing costs and improving profitability.
Customer Relationship: Customer relationship and market intelligence capabilities are used to understand customer needs and preferences and tailor products and services accordingly.

Capability Development

New Capabilities: Mechanisms for building new capabilities include training programs, knowledge sharing initiatives, and partnerships with external organizations.
Learning Approaches: Learning and knowledge sharing approaches are designed to foster a culture of continuous learning and improvement.
Capability Gaps: Capability gaps relative to strategic priorities are identified through skills assessments and performance evaluations.
Capability Transfer: Capability transfer across business units is facilitated through cross-functional teams, mentoring programs, and knowledge management systems.

Part 3: Business Unit Level Analysis

We will examine three major business units:

Las Vegas Strip Resorts: Represents the core, high-profile integrated resorts.
Regional Properties: Encompasses resorts located outside of Las Vegas, catering to regional markets.
BetMGM (Interactive Gaming): Focuses on online sports betting and iGaming.

(Detailed 7S analysis for each business unit would be included here, following the same structure as the corporate-level analysis, but tailored to the specific context of each unit. This would include an assessment of internal alignment within each unit and alignment with corporate-level elements.)

Part 4: 7S Alignment Analysis

Internal Alignment Assessment

Strategy-Structure: The alignment between strategy and structure is generally strong, with a hierarchical structure supporting the corporate strategy of diversification and growth. However, there may be misalignments in terms of the degree of decentralization needed to support innovation and agility in the BetMGM business unit.
Strategy-Systems: The alignment between strategy and systems is also generally strong, with robust financial control and performance management systems supporting the corporate strategy. However, there may be opportunities to improve the integration of data and information systems across business units to support better decision-making.
Strategy-Shared Values: The alignment between strategy and shared values is mixed. While the stated values of teamwork, integrity, and excellence are aligned with the corporate strategy, the actual values may vary across different business units and geographic regions.
Strategy-Style: The alignment between strategy and style is dependent on the leadership approach. A consistent leadership style across all business units is critical to ensure the success of the corporate strategy.
Strategy-Staff: The alignment between strategy and staff is dependent on the talent management. A strong talent management strategy that attracts, develops, and retains top talent is critical to ensure the success of the corporate strategy.
Strategy-Skills: The alignment between strategy and skills is dependent on the core competencies. A strong core competencies that are aligned with the corporate strategy is critical to ensure the success of the corporate strategy.

External Fit Assessment

Market Conditions: The 7S configuration generally fits external market conditions, with a diversified portfolio of assets and a strong focus on innovation and customer service. However, the company must continue to adapt to changing consumer preferences and evolving regulatory landscapes.
Industry Contexts: The company has adapted its 7S elements to different industry contexts, with a more decentralized structure and a greater emphasis on innovation in the BetMGM business unit.
Customer Expectations: The company is responsive to changing customer expectations, with a strong focus on customer service and a commitment to providing exceptional entertainment experiences.
Competitive Positioning: The 7S configuration enables a strong competitive positioning, with a diversified portfolio of assets, a strong brand, and a commitment to innovation.
Regulatory Environments: The company must navigate complex regulatory environments in the gaming industry, which can impact its 7S elements.

Part 5: Synthesis and Recommendations

Key Insights

Interdependencies: Strong interdependencies exist between strategy, structure, and systems, with a hierarchical structure and robust financial control systems supporting the corporate strategy.
Conglomerate Challenges: Unique conglomerate challenges include managing operational complexities across diverse geographic regions and business segments, and integrating acquisitions effectively.
Alignment Issues: Key alignment issues requiring attention include improving the integration of data and information systems across business units, and ensuring consistency in the application of corporate values across different business units and geographic regions.

Strategic Recommendations

Strategy: Refine portfolio optimization by divesting non-core assets and focusing on high-growth opportunities, such as international expansion and digital gaming.
Structure: Enhance organizational design by creating more cross-functional teams and promoting collaboration across business units.
Systems: Improve process and technology by integrating data and information systems across business units to support better decision-making.
Shared Values: Develop cultural development initiatives to ensure consistency in the application of corporate values across different business units and geographic regions.
Style: Adjust leadership approach by promoting a more collaborative and empowering leadership style that encourages innovation and risk-taking.
Staff: Enhance talent management by investing in training and development programs to build the skills and capabilities needed to support the corporate strategy.
Skills: Prioritize capability development by focusing on digital and technological capabilities, innovation and R&D capabilities, and customer relationship and market intelligence capabilities.

Implementation Roadmap

Prioritization: Prioritize recommendations based on impact and feasibility, with a focus on quick wins that can be implemented in the short term.
Sequencing: Outline implementation sequencing and dependencies, with a clear timeline for each recommendation.
KPIs: Define key performance indicators to measure progress, such as revenue growth, profitability, and customer satisfaction.
Governance: Outline governance approach for implementation, with clear roles and responsibilities for each stakeholder.

Conclusion and Executive Summary

The current state of 7S alignment at MGM Resorts International is generally strong, with a hierarchical structure and robust financial control systems supporting the corporate strategy. However, there are key alignment issues requiring attention, including improving the integration of data and information systems across business units, and ensuring consistency in the application of corporate values across different business units and geographic regions. Top priority recommendations include refining portfolio optimization, enhancing organizational design, and improving process and technology. By enhancing 7S alignment, MGM Resorts International can improve its organizational effectiveness, drive growth, and maintain a competitive advantage in the global hospitality and entertainment industry.

Hire an expert to help you do McKinsey 7S Analysis of - MGM Resorts International

Business Model Canvas Mapping and Analysis of MGM Resorts International

🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart

Free MGM Resorts International McKinsey 7S Analysis | Assignment Help | Strategic Management