Businessmodel of MGM Resorts International

Customer Segments

MGM Resorts has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at all consumers seeking hospitality and entertainment. That said, high-end gaming consumers make up a large portion of its audience.

Value Proposition

MGM Resorts offers four primary value propositions: convenience, cost reduction, risk reduction, and brand/status.

The company creates convenience by making life simpler for customers. All of its casino resorts operate 24 hours a day, 365 days of the year – the lone exception being Grand Victoria, which is open 22 hours a day, 365 days a year. Also, MGM Resorts allows customers to receive a full refund if they cancel their reservations within 72 hours of their arrival.

The company reduces costs in a variety of ways. It offers the “Best Rate Guarantee” – a promise that if customers book a hotel through its website, then find a lower rate for the same hotel elsewhere, it will match the rate and provide an extra 10% discount. It offers the following additional benefits for those making reservations on its websites:

• Customers are not charged any extra hidden fees – the online total includes all fees and taxes
• Customers only have to pay a one-night deposit; they pay the rest when checking out

• Customers can earn credits and special offers if they are members of the M Life loyalty program The company reduces risk by maintaining high safety standards. It complies with and has implemented the American Gaming Association (AGA) Code of Conduct for Responsible Gaming, which aims to promote responsible gaming among patrons. Specifically, it does the following:

• Enforces state law requiring guests to be 21 years or older to gamble
• Educates employees through various programs on responsible gaming procedures and policies
• Provides information to employees about resources for assistance with problem gaming
• Provides information to customers about responsible gaming, win-loss odds on casino games, and assistance resources for problem gaming

• Serves alcoholic beverages responsibly The company has established a powerful brand due to its success. It is one of the world’s leading hospitality and entertainment firms, with famous brands such as MGM Grand, Bellagio, The Mirage, and Mandalay Bay. It has also won many honors, including the following:

• Recognition as one of the World’s Most Admired Companies by Fortune
• Recognition as an Overall Leader in Corporate Social Responsibility Practices by PR News
• Frequent recognition as one of the Top 500 Green Companies by Newsweek
• Numerous Four and Five Diamond designations from the American Automobile Association and multiple Four and Five Star designations from *Forbes *Travel Guide
• Recognition as one of the top 100 Companies for MBA Students by Universum Global
• Recognition as one of the 40 Best Companies for Diversity by Black Enterprise ### Channels

MGM Resorts’ main channel is its website. The company promotes its offering through its social media pages, advertising (television, online, radio, billboards, magazines, and newspapers), direct mail marketing, e-mail marketing, and participation in trade shows and conferences.

Customer Relationships

MGM Resorts’ customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website provides answers to frequently asked questions. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

MGM Resorts’ business model entails designing and developing its services and maintaining its online platform for customers.

Key Partners

MGM Resorts’ key partners are the vendors who provide various products and services (food, beverage, etc.) in its facilities to customers.

The company maintains the MGM Resorts International Affiliate Program, through which it invites third parties to promote its offerings on their platforms (websites, mobile apps, etc.). It provides text links, banners, and other content. If a lead makes a qualified booking on its website, the referring party earns a commission. Interested parties must go through a 72-hour approval process.

Key Resources

MGM Resorts’ main resource is its intellectual property, which consists of the trademarks for its world-famous brands. It considers these brand names important to its business as they develop brand identification. The company also depends heavily on physical resources in the form of its various facilities, as well as on its sales and service employees who address customer needs.

Cost Structure

MGM Resorts has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing, administration, and transaction expenses, all fixed costs.

Revenue Streams

MGM Resorts has two revenue streams:

• Casino Revenues – Revenues generated from fees paid by customers for participation in slot games, table games, and other forms of casino floor entertainment.
• Non-Casino Revenues – Revenues generated from sales of rooms, food and beverages, entertainment services, retail products, and other non-casino related products and services.