PORTER'S FIVE FORCES

Entry Barriers

An entry barrier for the casinos is the policies and regulations; the government may restrict a lot this entry. Moreover, operating in casino industry requires a high start cost, along with plenty of both fixed and current assets. Therefore, it is different for a new entrant to have license and also sufficient resources to entry in this sector.

Exit Barriers

Depending on the exit barriers the companies could stay much time in the sector, although, they are not happy into it. In a casino, the emotional barriers are big points to stay in the market. If you had loyalty with a client it is hard to avoid him.

Customers’ bargaining power

You should offer a unique casino. How you do that? Launching an action, game, performance… that differentiates your casino from the others.

What is important is that the customer doesn’t know all the information, and obviously, in a casino the player doesn’t know anything at all.

Your changes should be low too.

Suppliers’ bargaining power

Basically, the products that are needed for operating a casino are ordinary and general, so you can get the low prices between all the suppliers. In fact, it is quite difficult for the supplier to enter in the gambling industry. Suppliers have to differentiate their products and fix a low price.

You have to seek something that has the same characteristics than the product you need but maybe is not exactly, but the price is lower.

Existence of substitutes

The substitutes are those products which have characteristics like our product but are not exactly. Nowadays, there are a lot of casinos in the world so, a lot of substitutes. For example, in Las Vegas, if you don’t like a casino you can choose another. Casinos have to over point beyond the others.

Moreover, we have to talk about Internet; that it is the most common supplier for the casino industry.

It is clear that there is a lot of rivalry in this sector. We have to fight to be the best ones. Don’t forget that it is a growing industry so the rivalry will grow with the pass of the time.

The entry barriers may be important for the regulations; here in Spain we have a strict regulation. What are not important are the exit barriers because there are just a few. Depending on the entry barriers the rivalry will be higher or lower but important too.

Consumers will depend on the existence of substitutes and the suppliers’ power will be less to because it hasn’t important costs.

The substitutes are those most important because the consumer can switch in an easier way.

In conclucion, the casino industry has been forced to search alternatives as theme parks, conventions, hotels...