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Diamonds in the Data Mine - Discussion Questions

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Diamonds in the Data Mine
What was Harrah’s market situation in 1998? What had been its strategy for growing its business?
Harrah’s had become the first nationwide casino business in 1998 and expanded its business from 4 casinos in 2 states to 26 casinos across 13 states. Harrah’s used Geographic Diversification strategy to expand its business, sought opportunities outside Nevada and Atlantic City which were full of intense competition in casino industry.
What was its growth strategy post-1998? Why did it adopt this strategy?
After 1998, Harrah’s emphasized customer potential value & differentiation, segmented customers and developed employee incentives & customer-oriented service to expand its customer base and improve its customer loyalty. Harrah’s highly relied on database marketing and decision-science-based analytics. It aims to change the way consumers make decisions about the merchandise.
Many big casino operators focused on creating their “fantasyland” at that time, the competition is intense. Moreover, investing heavily in amenities is not only costly in the short run but also risky in long-run especially when the buildings lose their attraction to the customers. Harrah’s had doubts on building lasting relationship with slot players, realized the importance of understanding the target customers and in order to best use of its business capital and improve its core competence, Harrah’s adopt this strategy.
How did it implement its strategy? Why was it successful?
Based on the customer database, Harrah’s firstly identified its target customers and their preferences and potential value; Then Harrah’s segmented the customers into 3 tiers---Gold, Platinum and Diamond cardholders, and offered different level of services accordingly to these 3 tiers; It made the best use of perks to incent customers to earn high level card; Harrah’s also improved

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