Problem/Issue Statement
Harrah created a new business strategy that focuses on intimate customer relationships by providing the best services and rewarding their loyalty. This is to improve and maintain strong customer relationships.
Harrah needed to come up with creative marketing tools and IT software in order to grow this particular business strategy. Even though Harrah has been successful in investing in data warehousing and mining, it is faced with improving its current IT strategy because it has become less innovative due to the strong competitive market resulting to the margins in the industry to become tighter.
The main problem was in the operation of its 21 Casinos. Harrah maintained multiple databases that needed to be integrated into one to help them establish a concrete brand image, a clear understanding of customer behavior and segments
Situation assessment
The context of the problem originated from Harrah’s rapid entrance into new markets and constructed its array of casinos, hotels, and restaurants across the country. The resulted in difficulties in creating one brand image and incorporating all data and revenue into one strategy.
It became critical for Harrah to invest in software that would understand customer preferences and help the company to improve on innovation and fight the fierce competition.
List of Plausible Alternatives and Evaluation of Alternatives
One alternative would be to keep their current strategy of using WINet and their closed-loop marketing approach. According to the case, this strategy has led to a 72% internal rate of return on information technology investments and a growth rate that has outpaced competition in almost every market. Additional investment or alteration to this strategy could create operational inefficiency and other adverse effects. If Harrah goes through with any further IT project, there could be a risk of failure that would impede current gains from the existing strategy. The company can play it safe and continue to create new promotions that are built on the results of previous ones and its massive repository of customer data.
Another possible alternative would be to “double down” on its current IT investments, and increase the funding for new information technology initiatives to more aptly collect customer data and analyze the benefits of marketing campaigns. The initial strategy had failed to anticipate the memory requirements for the marketing workbench. This resulted to the decision to switch to Cognos Impromptu and SAS. In addition, even though problems such as the originally complicated queries that failed to fall within the appropriate computing window were resolved, they reflect the need for fluid alteration to IT infrastructure. The data warehouse system could be redesigned to enable a larger storage for data collection and also updating the existing analytical software based on current market. This could helot the company to serve its customers better it could better through the Harrah’s experience and promotional offers. The downside of this alternative, as previously mentioned, is the inherent risk associated with any IT project and the possibility of profit lost to downtime and unanticipated system inefficiencies.
Harrah’s could seek to enhance its marketing strategy by expanding the amount of data it collects and how it is being collected. They Currently use source systems such as hotel system, tournament, and general gambling records for data collection. However, Harrah’s can incorporate data from external data points such as surveys, direct mailing to potential customers. In addition, the company can improve the knowledge they have about its existing customer base by similar incentives through in-room surveys at its hotels or even at various locations around its casinos. This would thus improve the efficiency of its current promotional campaigns and more accurately identify customer segments. However, this can possibly be a turn off for customers and discourage them from further visiting Harrah’s facilities in the future.
Recommendation
I recommend Harrah to implement some combination of the second and third alternative. A new IT investment to increase data storage and a larger capacity for data collection that will allow a better market by providing a better knowledge about customer preference. Due to aggressive competition, a strong IT system for data analysis would provide a competitive advantage for the company.
Reflection
To the members of the board
After last Tuesday night’s presentation by the consulting team, the experts made clear statements that Harrah can only take two specific actions.
1)They can keep their current IT and marketing programs but enhance and improve it
2)keep making investments in the properties
I will have to disagree with the idea of investing money in our properties because i think that is very further from our needs at the moment. Not to mention that our profit margin is very thin, we need to be very selective on the things we spend money on. We should just keep the regular maintenance standard.
I believe what we need to focus on is the first statement which is to improve and maintain our current IT and marketing programs, including market research and development. This would help us in achieving the level of innovation that we aspire to have when it comes to serving our customers and gaining their loyalty. I was also impressed with what the experts suggested when it comes to ways of which we can improve out customers’ experiences. This would contribute to the growth of our current IT strategy which i’m convinced will further help us to reach our ultimate goal which is to create one brand image, and integrate our databases
My regards,
Lynda Okeke
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