The following is a research paper on exploring the dynamics of the Macau gaming industry situated in China in an attempt to establish the profitability and attractiveness of the industry through the application of the conceptual and theoretical tenets of Porter’s Foive forces Model. Porter details that an attractive industry is one in which the five forces work together to drive up the profitability and hence the attractiveness of an industry.
He states that an unattractive industry on the other end is one in which the five forces drive down the profitability and hence the attractiveness of the industry. The paper takes both qualitative and quantitative research thrusts to tap both primary and secondary data requisite to fulfill the scope and objectives of the paper. Evaluation of gathered data shows that Macau is become more popular and somewhat more profitable that its USA based arch rival Las Vegas.
The paper also entails the application of the PESTEL theoretical framework to characterise the environment within which Macau functions taking into cognisance the importance and direct bearing the environment has on the performance of the industry and individual firms in the gaming district of Macau. The paper also entails a thrust at some marketing models and thrust adopted in the gaming industry as way of weathering both vertical and horizontal forces advanced in Porter’s model. The outline culminate in presentation of possible research focuses for further probes related to the scope and objectives of this research endeavor.
Introduction
Strategising is the one key component of management and organisational leadership. The component is inalienable for all forms of business establishments in various global markets. This aspect of management is critical for the growth, survival, competitiveness of business entities particularly in the gaming industry In Macau premised in a complex and volatile business milieu. The component is even more critical for the gaming industry in Macau China which faces stern challenges that come with plying volatile and characteristically different global business markets and landscapes such as China.
In making decisions, companies have to factor in social, political, environmental and economic considerations as way of coming up with feasible short term and long term strategies germane for the growth, sustainability and competitiveness goals of the company.
Although there is ongoing debate on gaming corporations strategy over the approaches like standardisation versus adaptation there is confluence of ideas and the recognition that gaming firms in Macau have to assemble working and feasible business strategies that will suffice for the volatile and distinct environs in which the gaming industry is premised. There are various factors that exert significant pressure on gaming firms formulate working short term and long term strategies germane to the accomplishment of their objectives ad goals. Upon the underlying fact that human needs are basically the same across countries and communities, sticking variances obtain in aspects cultural, economic, geographic, political etc. As such; gaming firms must at the forefront of the matters in the object of modeling policy and operations within feasible and effective strategy premise.
The nature, shape and conduct of companies are for instance subject to the influence of institutional authorities present in every country.
From another perspective the gaming industry firms have to consider cultural variances and aim to adjust and remodel their business strategic thrust to ensure optimum functionality and profitability in foreign business domains. Countries also have different economic forms and levels of economic development. Gaming companies may have to shift from business strategies tailored for free market economies to those germane in typically socialist economies.
Apparently the gaming industry in Macau is premised in a complex set of dynamics and business variable that make for a keen interest research. The foregoing constitutes the context in which the attractiveness and the profitability of the Macau gaming industry will be probed. Among a coterie of other objectives the study aims to apply theoretical models in exploring the strength of the competitive forces and industry profitability of the gaming industry in Macau after the casino gaming liberalization in 2002.
Objectives of study
The core objectives of this study entail the thrust aimed at testing the ability of the Porter’s five forces framework in determining the nature of competition and ultimately the attractiveness and profitability of casino industry in Macau the Special Administrative Region in China (i.e. How well does the Porter’s five forces model applicable in the gaming industry in Macau after liberalization to ascertain the attractiveness and profit potential. By extension the objectives of the study entail establishing and exploring the dynamics and transformation of the gaming industry in Macau.
The study will be conducted in the conceptual and theoretical precincts of the Porters five forces framework. Other theoretical influences will be in form of the application of the PESTEL Framework in contextualising the gaming industry in Macau for a meaningful analysis. On another scale the study will also present a comparison of factors that influence global strategies towards Chinese market with the factors that influence strategies in gaming firms home countries as a way of making a distinguishing the difference between them.
Core objectives of study seek to address the following issues;
- To explore how well the Michael E. Porter’s Five-force model prove applies in the evaluation of the casino industry in Macau after the liberalisation to determine the attractiveness and profit potential of the industry.
- To establish if there is/are any other forces(s)/factors that can be identified in the literatures which may hinder the industry’s attractiveness and potential profitability.
- To determine if study respondents (customers or others) agree with service quality and customer retention provided by the casino firms which will affect or determine the business strategy choice and or profitability that are identified in the literatures.
Theoretical Background (Framework)
On its major thrust; the study is premised in the theoretical and conceptual precinct of the five forces model by Michael Porter which will be applied to ascertain the attractiveness and profitability of the Macau gaming industry in China.
The theoretical model of PESTEL will also be used to characterise the multi-dimensional environment in which gaming firms in Macau operate. This is expected to suffice for the relevant exploration of the gaming business after the liberalization of the gaming Industry in Macau in 2002.
This study is largely influenced in the tenets of strategic choice paradigm which holds that strategies are about exercising choices by organisation’s decision making organs. In Child (1972) terms, “It adopts a perspective that envisions a more deliberate and participatory role of managers”. The paradigm holds that managers will maintain a significant capability and, more important, creative power to make strategic decisions, determine resource allocations, and shape organizational structure (Child 1997; Miles and Snow 1978). That means managers play an important role in determining firms’ strategies, so the data collected by interviewing different gaming firms managers is valued for analysis.
On another the dimension the paradigm recognises that environmental conditions have a bearing on the selection reasonable strategies as well as the appropriateness of particular organisational structures in light of competition challenges and competitiveness goals of gaming firms in Macau. The environment presents threats and opportunities and affects information flow in determining the boundaries or parameters of managers’ choices” (Child 1997).
As managers’ choices will be affected and influenced to a significant extent by environmental conditions, the Porter’s five forces model and PESTEL framework become feasible and handy conceptual designs that can be employed to examine the factors that affect managers’ decisions. The PESTEL framework places various factors and dimensions of influence into six main classes which are political, economic, social, technological, environmental and legal factors.
These factors are interlinked and interdependent. A change in any of the highlighted factors will trigger ripple effects across the board and impact on other associative factors as well. The effects have pervasive impact on the entirety of the competitive environment within which the gaming firms in Macau operate. This implies that managers must be abreast with all and especially key drivers of change in order to make the adequately informed decisions which yield desired outcomes for their organisations. The PESTEL framework is recommended for characterising business organisational strategy, activity and thrust particularly in respect to competitiveness strategic management.
Research Focus
The main focus of the research is to obtain a better understanding of the strategies adopted and implemented by the gaming firms in the Macau region as a way of determining the attractiveness as well as the profitability of the industry.
Business drivers are increasingly more critical in all types of industries, instilling a sense of urgency among senior managers and business strategists to enhance the competitiveness of their organisations in face various competition dimensions and dynamics as well enunciated in the five forces Porters model.
On another angle company managers and strategist for the gaming firms in Macau are under increasing pressure to develop globally integrated strategies to achieve efficiency and rationalisation across their geographically dispersed subsidiaries.
After China entered the WTO in 2001, China has opened up the market of 1.3 billion people, the actual purchasing power of the Chinese people has seriously attract foreign investors to invest in China, as the economy is under rapid development, a large amount of opportunities and potential profit are exited within Chinese market.
As such, exploring the critical factors which determine the competitiveness strategies of the Macau gaming firms must be in cognisance of the broader operational paradigm variables that constitute the specific Chinese industry and broader Chinese commerce and economy domains. One of the underlying understandings is that a comprehensive analysis of completive strategy will factor in variables of the concept that runs through the organisational leadership down to the personnel involved within the functionalities of the organisation towards the accomplishments of declared organisational goals.
Research ideologies and Methodology
To meaningfully frame the ideological, theoretical and conceptual platform for the research into the factors that influence the strategic decisions of gaming firms it is imperative to consider the employ various research models that will enable the researcher to bring a considerable proportion amount of research detail into perspective. The research thrust will adopt the two salient research theoretical frameworks, the positivist and non-positivist research paradigms. (Barker E: 2003) contends that the positivist theory entails the economic, behavioral, cognitive, motivational/trait/attitudinal, and situational viewpoints. According to the scholar the viewpoints are treated as the conventional perceptions as they came before the crafting of the non-positivist model.
In the views of the scholar, the positivist model which is still the principal framework reinforces the superiority of human reason and stresses that there is one objective reality which can be unearthed by scientific means. As such this design renders the world as an ordered and coherent environment with a well defined past, present and future. The tenets of the theory are clearly underpinned on the suppositions of rationalism.
On the other end the contrasting non-positivist model holds the interpretive and post-modern viewpoints. Tenets of this model entail that the world be view as s composite social and cultural world contrary to the viewpoints of the positivist paradigm which hold the world in a rationality view that supposes a homogenous social fabric.
Leveraging on the theoretical and principal tenets of largely, the non-positivist research theory, this research exercise will provide new perspectives, findings and insights that will assist in the exploration of the dynamics that have a direct or indirect bearing on the strategic decisions made by gaming firms in China. The research exercise will not be exclusive to any research thrust and will thus employ various research models to gather and collate data germane to arriving at meaningful positions on the research matter and subjects under probe.
Quantitative Analysis versus Qualitative Analysis
James Neil outlines, “Qualitative research entails the analysis of data such words, pictures or objects gathered in the research drive. The gathered elements are evaluated in subjective and relative manner toward the making of conclusion and recommendations in tandem with research scope and objectives. On the other end quantitative research involves a scientific evaluation of numerical data. ”
Qualitative research
This research project will be conducted mainly by qualitative research methods and accompany by analysing secondary data, like companies’ annual reports, press release, their official website, etc. The reasons for choosing qualitative research method instead of quantitative research method are due to four perspectives:
- the nature of the research project;
- the scale of the project;
- the cost of carrying out the project and
- time limitation.
Rubin and Babbie (2001:44) have emphasized the totally different nature of qualitative and quantitative research method. “Quantitative methods emphasize the production of precise and generalisable statistical findings and are generally more appropriate to nomothetic aims. When we want to verify whether a cause produces an effect in general, we are likely to use quantitative methods.
Qualitative research methods emphasize the depth of understanding associated with idiographic concerns. They attempt to tap the deeper meanings of particular human experiences and are intended to generate theoretically richer observations that are not easily reduced to numbers. ”
As a direct result of the objective of this research project, the researcher intends to have a deeper understanding of what specific factors will affect gaming firms strategic decision towards its local market and Chinese market; besides, it is hard to have a statistical proof towards the influential extent of different factors. Moreover, this research aims at gaining the opinions, feeling, beliefs and suggestions of different gaming firms’ managers. As such qualitative research methods appeared to be more appropriate for this type of study, instead of quantitative methods.
Besides, as this is just a small scale research project with very short period of time (about three to four months), so there will be not enough time and manpower to carry out quantitative research method, such as conducting survey to collect primary data for statistical analysis.
The research h has also anticipated financial resources constraints that have inhibited the adoption of more capital intensive quantitative research thrust. On another end it is considerably too time-consuming to collect enough amounts of qualified questionnaires as well as to analyse large amounts of data drawn from received questionnaires.
According to Stewart and Kamins (1993), the use of secondary data is advantageous for a researcher since one can already evaluate the suitability of a data as it is already in existence, thus, much time can be saved. Before delving into secondary sources of data, an evaluation of potential secondary data is essential as a way of screening resources to establish the relevant sources of information which will provide relevant data germane to fulfilling research scope and objectives.
Data collection
Among different qualitative research methods, this researcher intend to conduct six semi-structured interviews with six gaming firms managers with their firms’ head office base in countries other than China and doing global business in the Chinese market, in order to collect data in the area of what specific factors are influencing their strategic decision towards doing business in Chinese market with the comparison of their local market strategic decisions. Due to geographical and cost limitation, all six interviews will be conducted by phone. Literature and journals review will be used to collect data for the study as well.
Interviews
Scholars and researchers Rubin et al have underscored the significance of qualitative interviewing in research exercises of this nature. The scholars have reinforced that qualitative interviewing is flexible and incessant rather than prepared beforehand and sheltered. Steinar Kvale (1996:3-5) also states, “wanders through the landscape and enters into conversations with people encountered. The traveler explores the many domains of the country, as unknown territory or with maps, roaming freely around the territory. The interviewer wanders along with the local inhabitants, asks questions that lead the subjects to tell their own stories of their lived world. The researcher will therefore set a range of questions (appendix A) to keep the interviews focused on the core research themes and topic.
Finally, researcher is cognisant of certain variables that exist as way of limitations to the study in the use of interviews. As Anderson (1998:133) enquires, ‘if another person was to conduct the same study would their observations find the same results. ‘ In response to this question, researcher would like to reiterate that the study is a typically small scale exercise whose results must not be generalized and applied to all gaming firms and all managers’ beliefs. Moreover, throughout all the four interviews, researcher will use the same set of questions’ guidelines. In doing so, the variation in conducting interviews should be minimized.
Ethical Considerations
Data gathered in this research thrusts of this study will be used exclusively used explore the dynamics of gaming firms in light of the attractiveness and profitability in the conceptual precinct advanced by Porter in his five forces model. The research exercise is being carried out within the precincts and confines of regulations of the governing institutions as well as scholastic and professionalism values. As such the research drive is being conducted according to the guidelines and rules and regulations of the governing academic and research institution.
Details and information solicited from targeted and contacted research respondents will be used in the strictest of confidence and will not be availed to any other endeavors unless where all requite arrangements have been made and fulfilled in the interest of the research respondents and all other parties concerned. The researcher also hereby declares categorically the factor of absolute independence from organisations of or bodies of knowledge or interest that may be perceived to be of some association with the carrying of this study. The four stages of ethics in doing research are followed by the way of a good design, modes of data collection, analysis of data and for proper dissemination.
Confidentiality and anonymity will be maintained on the part of the research participants and all other respondents contacted in premise and for the objectives of this research. Respondents will also be requested to participate out of their free will and conscience without any instrumentation of forces of coercion or impulsion by the researcher whatsoever.
Threats to research
Whilst the research is being conducted in commitment to the ideals of objectivity and authenticity, the concepts and ideas used and developed in the course of the study are by no means exhaustive nor are they sacrosanct in any way. The research endeavor may not accomplish the desirable and ideal zero incidences of ambiguity. The research is also prone to suffering the blow of some perceivable logic leaps much attributable to the novel approach towards fulfilling the scope and objectives of the study as well as answering the hypothetical research questions. On another dimension the ideas presented in this study must be construed and used in the full cognisance of the tacit and underlying assumptions for instance that strategic decision making for gaming firms is characteristically different from that of local companies.
Summary
The success of this study is attributable to the both primary and secondary research methods that have need devised and administered to obtain authentic data from identified sources. The data processing and analysis which is preceded by this study component will be conducted for the analysing; synthesizing an extrapolation of the gathered data obtained through both the primary and secondary research methods. The ultimate goal is to establish the applicability of Porter’s theoretical model in determining the profitability and applicability of Porter’s five forces model.
Literature Review
This research exercise is not being conducted in a vacuum. The research exercise fits into a broad body of knowledge which has had numerous contributions from various scholars, researchers, professionals and students who have carried similar or related research exercises. Also the scope and objectives of this research endeavor occurs within related and implied theoretical, ideological and philosophical frameworks which largely influence the disciplines of business. As such the researcher is spurred to consider the multiple contributions relevant and related to this research endeavor. The researcher will present a literature review conducted in locating the object of this study within the broader confines of the bodies of knowledge in focus.
Core Theoretical Framework
Michael Porter’s Five Forces Model
Porter’s five forces evaluation and analysis is a model for the industry analysis and business strategy development (progression) propounded by Michael E Porter (1979). The models taps in the concepts developed in industrial Organisation (IO) to map out the five forces that may be used to establish the competitive intensity hence the attractiveness of a market. In the conceptual precincts of the five forces model attractiveness denotes the general profitability of the industry. As such an unattractive industry is the one in which the integration of forces functions to lower overall profitability.
The Micro environment entails the very forces ( factors) which are close to a business establishment and are positioned effectively to impact significantly on the business entity’ ability to serve its clientele pools and make a profit. Huisman D (2001) notes that a shift or change in any of the forces will demand that a company re-evaluates the marketplace. On another dimension, overall or general industry attractiveness does not necessarily denote that every business entity under that industry sector will match up to the deduced industry profitability scores. Firms have the capacity to implement their core competencies, business strategy in the operating networks to accomplish a profit that can get beyond the industry average.
Business Strategy formulators often make use of Porter’s five forces model when deriving qualitative assessments of a business entity’s strategic position. The model is nonetheless a foundation framework that facilitates the use of a ‘check list’ that strategists may make meaningful use of. Just like other general models its exclusive use in industry assessments and business strategy formulations will not suffice.
Porter’s five forces entail three forces derived from the horizontal competition paradigm. This is so because the rather general model is well applicable on the industry level which is defined at a basic and lower level. “A market in which related products and services are sold to buyers” (Gartner, W. B 2003)
Chinese Market
Birley and Westland (1993) have explored various dynamics relating to conducting business and extending business network In China. The nuances are quiet valuable for understanding of the environment met in which the gaming industry in Macau is premised. This is perceived to have a bearing on understanding the Macau gaming firms strategic and sustainability thrusts in relation to the industries attractiveness and profitability.
Some major contributions in the explorations of dynamics around gaming firms operations come form the works of McDougall and Oviat (2003). The scholars have outlined theoretical aspects of the business competitiveness and profitability concepts. The studies of the scholars focused almost invariably so; on companies that execute a long-term competitive thrust from inception. The researchers’ conducted various surveys for gaming companies in Macau
The heart of empirical research findings compiled by the scholars indicate that gaming firms especially global companies in Macau and in other regions have significant differences from domestic firms in the aspects of strategy as well as industry structure and more importantly in the manner in which they build their competitive strength and boost profitability. These have demonstrated the prowess to bolster capacity through competitive advantage gained from the tapping of resources and merchandising of gaming concepts (products and services) in a diverse Chinese market. McDougall and Oviat (2003)
The research findings show that gaming firms have a clearly distinct strategic thrust that aims at the pursuit of wider market approaches entailing the control of multiple distribution channels and servicing diverse market segments. The research findings also hold that the gaming industry has a diverse thrust aimed at developing and maintaining high market visibility over the Chinese tourism and leisure commercial domains.
The PESTEL Framework
The PESTEL framework presents a feasible and formidable framework of assessing and examining the macro-environmental factors that influence structures operating within the environment. Various factors impact directly or indirectly on the operations, functions and structure of an organisation among other things. The PESTEL model comes in handy in the examination of these factors by enabling the categorisation of the factors to draw lucid distinctions among them. The frame work has been implemented to characterise the dynamics and aspects of the gaming industry in Macau China prior to the determining of the strength of the competitive forces and industry profitability of the gaming industry after the casino gaming liberalization in 2002.
PESTEL framework offers the following categorisation of macro-environmental factors. Key understanding also entails that factors of direct and indirect influence to business establishments (Gaming firms in China) shapes the competitive forces and profitability strategic thrusts.
- Political Factors- These relate to extent to which political ideology and governments interventions impact on how the economy is run. Political ideological frameworks have a significant bearing on economy models and structure which has further bearing on the business organisations.
- Economic Factors-This category in PESTEL Framework entails elements such as interest rates, tax changes, exchange rates, inflation GDP growth etc. Changes in these elements have pervasive effects on business organisations and such elements have to be factored in the strategy formulation and implementation.
High interest rates are normally viewed as investor-unfriendly since they imply that it will cost more to borrow money. From another angle a highly valued currency thwarts exporting endeavors owing to high foreign currency prices. High inflation destabilises the economy as it triggers wage demands pressures while on the other end a growing national income increases demand for products and services.
Social Factors- The social fabric and changes obtaining in it in any community or market have critical implications for business organisations. One example of this can be drawn from the consideration that the UK population is largely considered to be ageing and this has upped costs of companies focusing on pension payments for their personnel since their employees are living longer.
Social Factors (Culture) and Marketing
There are varying perspectives on what the term marketing entails, implies and means. Nonetheless mainstream definitions of marketing acknowledge that marketing must be perceived as an ongoing process of spearheading success stratagem of organisations through the feasible forms of promoting the products and/or services that a particular organisation is supplying to its target service market.
In contemporary marketing theoretical and philosophical frameworks more considerable definitions of marketing are those which are have significant slant and emphasis on consumer orientation and satisfaction.
In contemporary marketing dispensation the marketing definitions offered by scholars like Philip Kotler have been widely adopted.
Adcock (Opcit) on the other hand presents an inclination to the harmonization of the core marketing variables as the crux of the definitions of marketing.
Various definitions have been offered on what is perceived to be strategy in business. Johnson and Schools (1998) define strategy as the pathway and functional thrust of an entity for long-term time frame. According to the scholars the thrust would enable the company to accomplish its goals through the setting of resources and operations within a challenging set of circumstances in the objective of supplying clientele needs and meeting all stakeholder expectations.
The scholars in this definition are building on the notions of long term organisational goals. The concepts also entail focus on the specific markets in which the businesses entity has to be focusing on as well as business activities that the entity will be involved in such environs.
The perspectives are also touching on the aspect of how the business entity must do better than other business organisation operating in the identified areas. This brings in the important factor of competitiveness. The strategising process is holistic procedure which must bring all requisite variables into perspective. By extension strategy formulation will bring in the variables, concrete and abstract, such as personnel, capital, assets, etc into consideration. On broader scale, strategising also premises the business idea within the precincts of broader operational framework that constitutes external factors which may be aspects around the business capacity to compete. Strategising will also bring into consideration the views, values and anticipations of the stakeholders with direct and indirect influence over the business entity.
Strategic decisions are thus the long-term direction of an organisation, they will try to search for strategic fit with the changing business environment and make valuable decisions towards the organisation in order to fulfill stakeholder expectations. In short, a strategy of an organisation is affecting its operational decisions and determining an organisation’s future and profit in a certain extent. In this sense a feasible strategy plays a crucial role in an organisation. And this is the reason why this research is focused on the strategy aspect of the gaming companies since that has a significant bearing on determining the profitability and attractiveness of the gaming industry in Macau China.
In attempting to unravel the corpus of the literature consulted on the scope and objectives of this study. There has been the review of some literature on the inalienable subject of globalisation. This has close connections with the scope of the study in light of the fact that Macau is a global business play landscape pitting business establishment from various countries in the gaming industry. Morrow, J. F. (2003) notes that the concept of globalisation is particularly inalienable when exploring Macau gaming industry given the number of global players in that industry such as Wynn Resorts, MGM Mirage, Publishing and Broadcasting and Galaxy Casino. The scholar further notes that these global players have bigger plans to build sites in the 23.8 sq-km precinct.
Globalisation is a popular phenomenon nowadays. It can be described as the process of social, political, economic, culture and technological integration among countries around the world. In this paper, we focus on the key drivers in the globalisation process, namely the firms that drive this process. Gaming firms as contemporary ventures that seek scale economies in response to the opportunities hand threats posed by the global marketplace using strategies of worldwide integration and coordination.
The scholars underscore that result have supported notions that multinationals emphasize a comparatively aggressive market penetration approach which makes use of external financial and production resources to enter multiple geographical domains. It will be interesting to note how the application of Porter’s five forces will help characterise the attractiveness and profitability of such gaming firms in Macau.
Porter’s Model and Business Strategy
To fully characterise the attractiveness and profitability of the gaming industry in Macau, applying Porter’s theoretical framework, is has been essential fro the literature review component to take thrust at the featuring o some gathered insights on the closely tied domains of business strategy. This is in so in cognisance of the significance that this aspect has on the dimension and dynamics of and business firm or industry attractiveness and profitability. Porter has clarified that for diversified and versatile business establishments companies the first key issue in corporate strategy is the selection o industries is the selection of industries where in the entity should compete. These would a direct business son various business entity strategy levels such corporate, business and operational strategy levels.
Corporate Strategy
Corporate strategy dwells on the broader and core purpose as well thrust of business entity in the object of the steering of organisational activity towards the fulfillment of the expectations of the stakeholders. By its nature and scope, corporate strategy is of critical significance as it underpins all decision procedure in the organisation and is also subject to the influence of investors. In many instance the corporate strategy of a business entity is normally declared lucidly in company’s mission statement.
Business Unit strategy
At this level business strategy is about the ways adopted by a business entity in order to operate competitively within a certain market. Strategising at this point boils down to the specific on product range, customer satisfaction and the propping up of competitive advantage against other competitors. This component also entails the crucial aspect of the identification and establishment of novel opportunities whose pursuit must account for the business entity’s growth, diversification and sustainability.
Operational Strategy
This is the strategic component of the organisation tasked with ensuring that we every unit and organ of an organisation is well positioned to facilitate the accomplishment of corporate as well as business level strategic objectives. As such this unit focuses on elements such as business resources, personnel and various organisational procedures, etc.
Although the definitions of marketing concept vary somewhat widely, some core aspects identifiable in the outlined perspectives suggest that the divergent and varying perceptions and notions nonetheless agree that marketing entails in its design and objectives core, the articulation of an organisation’s success stratagem through feasible product and service promoting approaches.
Culture is widely perceived as the embodiment of a people’s values, beliefs, norms and traditions among various aspects that relate to who the people actually are as a group or as individuals. “(Allyn and Bacon: 1998) Culture definitions that acknowledge the estate of a people’s culture as a result of various intrinsic and extrinsic forces will be more valuable for the purposes of this tract.
The perspectives on culture culminate form the fundamental perceptions of culture as simply, a people or individual’s way of life. Culture must be understood to be dynamic as people through development and interaction as well as contact with other sources of influence adjust and modify their lifestyles to keep pace with new challenges, environments and interests among various other aspects that emanate form the inevitable phenomena of change. In the contemporary global dispensations the understanding of the culture of any communities of the world can not overlook the aspects of acculturation and multi-culturalism or cultural pluralism factors that characterize most contemporary societies.
The understating of a people’s culture and all its scope and conceptual extensions together with other associative dimensions is imperative for any marketer worth his or her a salt and attempting to run successful marketing strategies in new global markets. Marketing is invented and implemented within the broader context of environs that embody various factors and elements like the community’s (market) geographical location, time setting and more importantly the market culture. From the key terms definitions presented above the crucial importance of the relationship between culture and marketing can not be gainsaid.
Marketing entails in its core, the championing of an organisation’s set goals and objective s through feasible, effective, efficient and culturally relevant means of promoting an organisation’s products and services to the target market. There is overwhelming evidence across academic and other professional researches on marketing strategies and models which substantiate the fact that any marketing drives, approaches and endeavors that overlooks a people’s culture are definitely set to fail.
The preceding insights and perspectives lay an ideal conceptual and ideological framework for a comprehensible assessment and exploration of the applicability of the key theoretical premise; Porter’s five forces model in exploring and establishing the attractiveness and profitability of the gaming industry in Macau China; more specifically, of the bearing that the close ties between marketing and culture have on the competitiveness, sustainability and profitability strategies of especially Multinational gaming firms in Macau.
- Technological Factors – In wake of phenomenal technological breakthroughs business organisations will make it or break it depending on how they position themselves against the trends in technological developments. Technological factors also impact significantly on an organisation. Technology advancements result in the creation of new products which will in-turn lead to the creation of services that relate to the use and maintenance and repairs of the products. Environmental Factors- These relate to the features like weather and climate change. There are certain business activities such as tourism and farming which are directly influenced by such environmental factors. Gillespie (2007) contends that the phenomenon of global warming for instance, coupled with growing levels of environmental awareness environmental factors have become a critical matter for companies to consider.
- Legal Factors- legal factors pertain to the legal framework within which business organisations operate. It is known that institutional authority as wells legal impositions have a direct bearing on the behavior of companies. Regulations promulgated around aspects of minimum wage, discrimination and labour legislation for instance have direct impact on the shape and behaviors of business organisations. The category can be explored in the assessment of its sub-categories. The sub categories here entail consumer laws, competition laws, labour laws, healthy and safety regulation, etc. These have significant impact on how Multinational companies operate and function.
The works of McGrath, MacMillan, and Scheinberg (1992) have also had significant contribution in the studies aimed at exploring the dynamics of gaming companies. The scholars pitted global entrepreneurs and local casino industry players in multiple counties. Their research outcomes show that there is a remarkable coterie of values shared by global gaming business players in Macau regardless of the distinctiveness of the cultural orientations and origins.
Other works of McDougall, Shane and Oviatt (1989) which were an evaluation of case study of global start ups brought-out that business establishers have the specialized competencies germane for the integration of resources over national precincts. The study also revealed that early globalisations are essential as a way of averting the potentialities of falling into what is termed as path-dependency. The studies further show that business establishers favor amalgam organizational structures in form of strategic coalitions and business networks. Scholars conclude in their evaluations that global business success is facilitated by instantaneous critical mass, the development and influence of knowledge personnel as well as sustained global coordination.
Cultural Dynamics in Macau
China had protracted history of seclusion from global trade. The country opened its channels to international trade in the late 1970s. Ever since that time China has been upbeat in rallying its economic activity in an attempt to reduce the gap between its long isolated economy and the economically advanced USA and other European countries. This is illustrated by strong trading ties between China and the US. China has also opened its doors to various multinationals from The US, Europe and the world over.
Nonetheless many global business players have faced stern challenges in adjusting to the Chinese climate largely owing to cultural variances that exist between The Chinese culture and the various European and other global cultures.
Hodgette Luthans et al (2006 note that experienced travelers report that the primary criterion of doing business in china is technical competence. The scholars cite instances where gaming selling machinery will have to face scenarios where the customers want know specifically how the machine works, all its capabilities as well as how repairs must be conducted.
The salient cultural difference experienced in China pertains to the concept of time. Hodgette Luthans et al (2006) points out quite critical points on the matter of time stating that The Chinese are punctilious when it comes to time. Further states that people conducting business meeting with Chinese have to factor then Chinese regards of time. The scholars also note that the nodding of the head by the Chinese does not necessarily imply they agreed but that they understand what they are listening to.
Organizational and Environmental Factors
Business organisations do not exist in a vacuum and the same applies to multinational companies. The nature and stature of the organisations is shaped largely by internal factors as well external factors. Internal factors entail organisational management strategy, organisational culture and ideology among a host of elements that constitute the organisation. External factors include the concrete and abstract environments in factors social, political, geographic, demographic and economic among many others. Various studies have attempted to substantiate the claims presented which hold that the pathway that an organisation likely to adopt in organisational management, change and transition processes is shaped by the complex interaction of different organisational and environmental factors.
According to Ljiljana Erakovic and Michael Powell (2006) a pathway is a specific progression of changes in an organisation’s development process which may include several stages within or between organisational configurations.
“The matter of a pathway entails structural measures, organisational methods and systems as well as cultural and interpretative models”, (Hinnings and Greenwood in Erakovic et al: Opcit). In Tandem with the scholars perspectives is the notion that determinants to what pathway will be adopted are shaped largely by the forerunning relations (both internal and external) an organisation has had. These perspectives lay a foundational perceptual framework for exploring as well as substantiating the thematic positions holding that the pathway or direction an organisation is likely to adopt is largely determined by the complex interaction of the both organisational and environmental factors.
Gaming Firms and External forces
Gaming firms have to be structured for survival, growth and efficiency. This has pervasive implications on the organisations’ management fabric that must model the organisation’s strategies in tandem with demands exerted by external influences. Royston Greenwood (1996) concurs, “Firms in the 21st century do not exist in grand seclusion. It is highly questionable whether business entities ever did, even if someone can present an argument for the self-reliant society in the past. Today gaming firms are part of a larger network of organizations with which they interact, operate and critically dependent upon. ”
What is noteworthy in observations is that that these set of connections also entail related associations with other networks which culminate in cob-web of interlinking relationships. The preceding nuances underscore the significant impact that external organisational environment bears on that gaming firms are consistently under pressure to adopt measures of consolidating their positions and keeping competent in a rapidly evolving contemporary business landscapes especially in the face of the sweeping phenomenon of globalisation. In such circumstances the organisational factors might entail an entity’s aims and objectives of growth and sustainability by leveraging on working networks.
On the other end environmental factors may be in form technological evolutions and the challenges of penetrating global markets. An example of this interaction between an organisation’s factors and environmental factors is well represented in the changes adopted by the United Parcel Service company of U.S.A. The global leader in freighting business transformed its business approach by tapping latest technology to change from a mere parcel delivery company to an efficient e-commerce enabler.
Scholars such as Greenwood and Hinnings (Opcit) have posited that although institutional theory is not generally viewed as providing a model of organizational change it provides an explanation of important issues of organizational dynamics. Erakovic et al also state that institutional theorists have shown why some organizational arrangements become wide spread across sector boundaries and why organisations under similar institutional pressures, may experience different patterns of change.
The pathway and global business strategy related models must thus be construed in the manner in which they illustrate the paradigms of changes and pathway chosen in relation to various dimensions that are based on gaming firms features and characteristics. The model by Michael Powell et al presents probable outcomes of the particular path ways whose choice culminates from particular organisational dimensions. The Dimensions-Pathway-Outcomes Model by Ljiljana Erakovic and Michael Powell. Source: Powell et al (1991).
The model presents three pathways, the incremental, radical and reductive pathways. The incremental pathway is prompted by dimensions such as established industry standards as well deregulation and competition in associative influence of owners’ strategic intent on stability and market driven expansion. Chief among the outcomes of this pathway is the improvement of current competencies as shown in diagram. (Figure 1)
The notable thrusts in the illustrations of the incremental pathway shown on the diagram allude to the tendency by organisations to adapt to drastic environmental changes in radical forms. In concurrence with this notion Miller and Friesen in Powell et al (Opcit) fitly echo that, “thriving past experiences, intensely entrenched ideologies, powerful inside alliances and normative rather than coercive pressures all drive the gaming to extrapolate precedent trends, and to execute new radical changes. ”
On another angle the radical pathway is presented as an illustration of the overhauling structural changes that organisations implement in their quest to strengthen and reinforce their functionalities and approaches towards the accomplishment of their set business goals and objectives.
“Organizations undergo the process of reorientation by re-creating their past values and redesigning their strategy and structure” (Hinnings and Greenwood: 1988) In this transitional model, the influences of an gaming firms internal factors have a significant bearing on the kind of pathway that a particular organisation is likely to adopt into the future. Organisations undertaking transitional or changes measures in this model have to refer and tap into their value system and organisational culture to the re-fashion their system commensurate with change demands exerted by the external obverses. This illuminates the interplay of gaming firms internal factors as well as environmental factors in transitional processes.
David Smukowski, UW CIE, (2006) presents a catalogue of valuable definitions and perspectives ion the subject of sustainability. The author cited above defines sustainability as a pro-active approach to ensure the long-term viability and integrity of the business by optimizing resource needs, reducing environmental, energy or social impacts, and managing resources while not compromising profitability.
Facility efficiencies (HVAC, water, raw materials, etc.), material and process improvements, supply chain efficiencies, products or services that are more efficient (i.e. hybrid cars, renewable fuels, etc.), recycling, telecommuting, optimization of any resource use.
The author cited above presents central perspectives on the far reaching concept of sustainability. In his ‘From Sustainability to Stakeholders’ outline the author asserts that all those with an ability to impact the business are stakeholders and that anyone impacted by any business is a stakeholder. Focusing upon stakeholder needs is a route to new markets, innovation, reduced business risk, and operational freedom.
The resource review has been particularly valuable in presenting the broad context in which a company sustainability strategy and goal are established and leveraged.
The author further outlines the following as fundamental business future roles.
Economic profitability and opportunity, economic growth engine, Innovator global trade, social responsibility and opportunity, livelihoods and benefits participant in democratic processes, resource responsibility and opportunity consumer and polluter of shared natural resources, innovative and economic capacity to restore, and save natural resources as well as creativity of capitalism to create the path to sustainability. The source also presents an exploration of how businesses can lead society’s highest aspirations for sustainability besides exclusively focusing on the sustainability of the business organisation per see.
On marketing science for gaming firms W. Miniard, and Michael J. Barone (2000) present eye opening perspectives and findings on various forms of reference groups’ impact on consumer decision making processes. The resource particularly zeroes in on the aspect of attitude as a key aspect in the influence of consumers.
The journal on the Effects of Absurdity in Advertising (2000) by Leopoldo Arias-Bolzmann, Goutam et al explores various models of advertising in relation and cognizance to various references to strategies of penetrating global markets.
The resource also focuses on consumer attitudes on certain products, draws comparisons and presents statistical analysis of findings obtained through various research modals.
The Journal of Marketing Research by Eric T. Bradlow and Vithala R. Ra (2001) captures consumer responses and attitude to particular brands. The resource also explores the effect, pricing, attributes elements relating to the marketing strategies. Managerial implications of the statistically presented findings are also captured in this resource. The Evolution of Brand Preferences and Choice Behaviors of Consumers to a Market (2003), Journal of Marketing Research by Carrie M. Heilman et al presents the crucial aspects of the Log it-mixture model with time-varying parameters, Consumer panel data, Stages (information collection, extended to lesser-known brands, information consolidation). Elements such as impact, product experience as well as statistical analysis are presented.
In offering various other valuable perspectives Whan Park, Sung Youl Jun et al (1999) explore aspects of option framing, psychological reactions, regret anticipation and product category commitment. These have presented valuable insights in the framing and enhancing the relevance of this research exercise.
The resource has furnished the scope of this sustainability study with valuable perspectives on supply chain management in relation various organisational management components for national and multinational companies.
The Brundtland Report plea to protect the environment for future generations is less controversial than the implied negotiation between environmental, social and economic interests recommended by the 2005 World Summit. “(Op. Cit) The resource gives fundamental principles of sustainability. The nuances have shaped the foundational approach in the conducting of this study.
“A further practical difficulty with a universal definition is that the strategies needed to address “sustainability” vary according to the level of sustainability governance under consideration. ” the author indicates.
Bartlett, A. (1998) insights have been helpful in highlighting aspects of sustainability that relate to population growth and how company sustainability endeavors relate must relate to various external environmental conservation efforts. R (2007) presents a historical background of the business sustainability theories as well related philosophical frameworks within which strategies of business longevity can be formulated, implemented and managed. The resource has particularly helpful in guiding this study towards exploring the concept of sustainability within the broader bodies of knowledge that relate to the discipline.
Blewitt, J. (2008) on Sustainable Development outlines approaches to analysis and assessing a business entity’s development. The resource is handy for its description of sustainable development which is conceptually and contextually akin to the very core of the scope and objectives of this study.
Weathering Porter’s Horizontal and vertical Forces Through marketing
In mainstream marketing and business domains behavioral marketing has been defined as a technique employed by marketers and advertisers to increase marketing effectiveness of business advertising campaigns. (Farber, B. and Wycoff, J.1992) According to the cited scholars this entails in its core the use of information gathered about user such as their search patterns and preferences. “Marketing practitioners believe that this way they are able to locate the kind of internet users most likely to be attracted to their products and services and hence heighten customer attraction prospects.” (Farber, B. and Wycoff, J.1992)
Direct Intervention in behavioral marketing and customer retention
The works of Reichheld and Sasser (1990) have made significant contributions to the bodies of knowledge in the subject of the significance of customer retention. The scholars in the works present their findings which entail that profit margin(s) in service provisions sectors and industries including credit card companies grew in proportionality to the longevity of a customer’s relationship with the service company. The scholars underscore in particular the incidences of MBNA in America.
“Customer defections ‘swat’ team staffed by some of the company’s best telemarketers”. The scholars have mentioned that this amounted to a 50% success rate in luring clients to retain their credit cards. The scholars also indicate that a 5 % growth in customer retention raised average customer value by 125%. In the conclusion of the empirical data based conceptions on customer retention in e-businesses companies, Reichheld and Sasser (1990) indicated that, “cutting defections in half could more than double the growth rate of the average company.”
The works of Everett (1993) who also explores similar dimensions and dynamic have also spawned the broadening of perspectives in this study. His work has laid invaluable ideas in the customer retention studies owing to his notions on that a committed client retention unit designed by Patrick J. Swanick at the Society National Firm in Cleveland, attained a 57% accomplishment rate in influencing callers to continue with the Cyber oriented e-commerce institution. Everett has underscored that the success of the retention model in this scenario involved the probing for causes for potential defections and that the causes established empowered the e-firms staff to come up with resolutions. The success of the approach was further enhanced by the follow-ups that were made for individual calls accompanied by a letter to the customer.
Customer retention and Customer satisfaction
Various scholars have attempted to establish the relationship surmised between the aspect of customer retention and customer satisfaction. The works of Reichheld and Kenny (1990), have explored the close relationship between the client satisfaction and customer retention. From another different yet related perspective the contributions made by Bowen and Lawler (1990) as well as that of Schlesinger and Heskett (1991) delve into the dynamics around the link between customers retention versus the quality of service the customer get from the companies.
Gaming firms have to be structured for survival, growth and efficiency. This has pervasive implications on the organisations’ management fabric that must model the organisation’s strategies in tandem with demands exerted by external influences. Royston Greenwood (1996) concurs, “Gaming firms in the 21st century do not exist in grand seclusion. It is highly questionable whether business entities ever did, even if someone can present an argument for the self-reliant society in the past. Today gaming firms are part of a larger network of organizations with which they interact, operate and critically dependent upon.”
What is noteworthy in observations is that that these set of connections also entail related associations with other networks which culminate in cob-web of interlinking relationships. The preceding nuances underscore the significant impact that external organisational environment bears on that firms are consistently under pressure to adopt measures of consolidating their positions and keeping competent in a rapidly evolving contemporary business landscapes especially in the face of the sweeping phenomenon of globalisation. In such circumstances the organisational factors might entail an entity’s aims and objectives of growth and sustainability by leveraging on working networks.
d that although institutional theory is not generally viewed as providing a model of organizational change it provides an explanation of important issues of organizational dynamics. Erakovic et al also state that institutional theorists have shown why some organizational arrangements become wide spread across sector boundaries and why organisations under similar institutional pressures, may experience different patterns of change. The pathway and global business strategy related models must thus be construed in the manner in which they illustrate the paradigms of changes and pathway chosen in relation to various dimensions that are based on gaming firms features and characteristics. The model by Michael Powell et al presents probable outcomes of the particular path ways whose choice culminates from particular organisational dimensions.
Behaviors and Skills Relationship to Service Quality and Customer Retention
Preceding researches have also illumined the relationship that exists between the aspects of behaviors, skills and service quality and customer retention. The work of Zeithaml, et. al. (1990) has underscored the essence in adopting paradigmatic shifts form personnel management in way of enabling personnel to assume responsibility. (Schlesinger and Heskett, 1991) also concurs, “Personnel have to take responsibility, think for themselves and respond well to pressure from customers”. The works of Bowen and Lawler (1990), Reichheld and Kenny (1990) also reinforce the significance of empowering to take responsibilities and be at the fore front of problem, resolution in matter that relate to customers and the service provision interface
The question of privacy in advertising is one of the most complex and controversial one. Recent years, the Internet and Information technologies have changed the understanding of privacy in advertising and protection of personal data in the workplace. Recent years, researchers and media reported increasing number of privacy violations as a result of innovative technologies and unfair practices of advertisers who try to gain total control over personal lives of their subordinates. Another approach to securing complex networks is to develop security agents continually testing computers for the presence of potential antigens–like the (unproven) theory of immune surveillance, according to which immune cells detect and destroy emerging principles.
The literature can be divided into two layers: those researchers who criticize lack of privacy in advertising and analyze its negative impact on the society, and the research studies aimed to advice and protect both the public and advertisers from violation of their rights and freedoms. Cannon (2008), Clow and Baack (2002) and Lance and Woll (2006) underline that many advertisers violate privacy rights of their customers collecting personal data and monitoring their performance during website access. According to statistical results, 30 million users in the United States are monitored by the online companies. In legal contexts the term “privacy” is sometimes used in a broader sense than that of direct entitlements. For instance, legal rules protecting the interests of children or the mentally ill are often presented as concerning the “rights” of such persons even if the latter cannot personally claim the observance of these rights.
Chitty et al (2006) and Mutanen (2007) state that technology and the Internet have changed patterns of communication and privacy concerns. The impact of technology implies that communication technology not only has an impact on people, but transcends all activities. Although the technological impact perspective provides insights into the determining aspects of technology, the actions of humans in developing, accepting and changing technology have largely been ignored by this group of researchers. These researchers vividly portray that online advertising improves communication process and allows people in different geographical regions communicate at low cost. In organizations, communication technology is a strategic enabler of one of the most basic tasks within organizations, namely information processing. In this case, it has to be viewed as a unique technological tool for organizations
Wilson (2000) discusses the main principles of advertising laws and their practical application in modern environment. The author states that new technology has a great impact on privacy and security issues. For the development of the self, privacy in communication is a fundamental requirement for the creation of true and lasting relationships. Users thoughts may one day be simulated, or at least stolen, by advanced computers. It is difficult to look at any segment of the economy and not find new, aggressive violations of individual privacy. Without privacy of communications, there can be no ultimately true relationships.
For instance, the Electronic Communications Privacy Act of 1986 has many loopholes that make users and consumers monitoring possible. The inherent problems with privacy-protecting technology are that it is very difficult to know whether or not the technology is working properly. If privacy is being violated, a user might observe a telltale symptom: a user might get junk mail or harassing phone calls.
Wells et al (2006), Thompson (2006), McDonald and Christopher (2003) and Rampell (2007) focus on possible threats and weaknesses of privacy violations. These researchers state that among business practices, advertising is unique for the amount and variety of attention it receives. There is increasing interest nowadays not only in the quantity of advertising messages produced but also in the qualitative differences between advertising messages. The lack of market information and of competition that would prevail in the absence of advertising would be costly to consumers: as some sellers offering bargains failed to attract buyers, others would find it possible to exploit a degree of monopoly power.
Hence, the choice again is not whether advertising is perfect but whether the benefits of advertising outweigh the costs, so that the social welfare is greater. Whereas the words “wish” and “desire” refer first of all to subjective feelings, the words “need” and “interest” represent steps in the direction of objectivity and legitimacy. The matter is a little complicated because the word “interest” is employed in different ways. It may simply refer to what is objectively valuable without any connotation of legitimacy. In that case the expression “to the interest of” can often be replaced by “to the advantage of.”
Kitchen (1999) state that a concept of display rules can help advertisers to appeal to global target audience. It consists of cultural rules that govern proper and improper ways to express emotion. In effect, these may alter or inhibit the direct expression of emotion in order to conform to the expectations of a social situation. Even though such emotional communications (altered by display rules) may involve facial expressions or gestures, Buck has included them within the category of symbolic communications, since such alterations are intentional (Schultz & Kitchen 2001). Differences between spontaneous and symbolic communication result in part from differences in their neural basis.
These, two forms of communication did not evolve simultaneously. The meanings conveyed by the spontaneous communication of emotion are immediately accepted and understood, whereas the symbolic, intentional communication of emotion is evaluated through further cognitive interpretation and judgment. In order to reach global consumers, art directors and copywriters should take into account cultural preferences, global mass culture and impact on country of origin.
Researchers state that privacy requires special protection by society because they represent indispensable conditions for an existence worthy of a human being. The general notion of privacy does not impede society from curtailing or even abolishing particular rights with a view to the promotion of overriding interests, often designated as belonging to “the general interest” or “the common good.” However, when interests are presented as privacy issues the use of this terminology implies that they cannot be simply discarded for the sake of overriding interests. Privacy is meant to be of a higher rank than rights not so named, and the purpose of this higher rank is to ensure that the social system serves those basic privacy interests which are indispensable for a life of human dignity.
Researchers (Kitchen 1999; Labarbera et al 1999) underline that the right to privacy does not involve, as some have argued, the control that a user has over information about herself. Rather, the relationship that exists between the persons involved also plays a crucial role. On one traditional view, the relationship that exists is that of an agent-principal. The user is the agent of the advertisers and as such must comply with any legal request of the advertiser. On this view the only right that users and consumers can claim is the right to quit her job. At the same time, the users and consumers have the obligations of obedience, loyalty, and confidentiality.
In contrast to other researchers, Kitchen (1999) and Labarbera et al (1999) underline that relationships between advertisers and users are stipulated by contracts and other written agreements. Usually, the contract presupposes the existence of a legal framework which must conform to the requirements of that legal system. In particular, obedience to tax, social security, equal opportunity, and health and safety laws would require an advertiser to collect and store certain information about all users and consumers. Providing that this information is used only in the proper legal manner, an advertiser coming to know consumers’ age, number of dependents, sex, race, social security number, and so on would not violate the users and consumers privacy. There is much other information that an advertiser can come to know about users and consumers s without violating privacy.
Cannon (2008), Clow and Baack (2002) single out the main principles of privacy in advertising. They include:
- purpose of collection personal information,
- source of personal information,
- collection of information (consumers should be aware of the data collection),
- manner of collection,
- storage and security of collected data,
- access and accuracy,
- necessary corrections in information,
- personal information not to be kept for longer than necessary,
- limits on use and disclosure,
- unique identifiers.
Following Cannon (2008), Clow and Baack (2002) an advertiser can require information about educational background, and other information relevant to the purchasing decision. However, this relevancy test should be taken seriously. This information is irrelevant for deciding whether or not the consumers are capable of fulfilling her part of the employment contract.
Cannon (2008), Clow and Baack (2002), Watching while you surf. (2008), Google Inc 2008 (2008) underl8ine the problem of information sharing in advertising. Advertisers routinely disclose information about their users to other companies, unions, law-enforcement agencies and various other government agencies, banks and creditors, insurance companies, and private individuals (Busse, 2004). Some of these disclosures may be legally mandated or in compliance with the advertiser’s own desires. Although most of the information disclosed by advertisers is job-related, some disclosures may reveal aspects of the consumers’s personal life, such as sexual orientation, political associations, or family problems.
For example, social security numbers given to comply with legal requirements should not be used as users and consumers identification numbers. The information an advertiser collects about a user is not a commodity that can be exchanged, sold, or released in the marketplace. In short, there is a prohibition against the release of any information about an user to a third party without the users’ explicit consent.
Another problem identified by the theoretical literature is monitoring. Stephan (2008), Noguchi (2004), Timesonline (2008), Behavioral Internet Advertising (2008) vividly portray that In spite of strict legal regulations and control of users and consumers privacy rights, many companies use monitoring as a main tool to control behavior of users and performance Computer, telephone and video monitoring are the most popular control methods in the workplace. US firms involved in computer monitoring include American Express, AT&T, and information industries like banking, insurance, and credit.
Monitoring of workers in the United States usually involves recording individual computer operator keystrokes, ostensibly designed to increase productivity, or listening in on telephone operators, supposedly to promote courtesy and efficiency. Despite of advantages mentioned above, these procedures violate privacy rights of users and consumers and their dignity. The main problem is that users were not informed about monitoring systems by an advertiser. A special concern of users is e-mail privacy.
The article “Internet Advertising Revenues” analyzes financial outcomes of privacy violations and concludes that advertising companies receive millions of dollars exploiting desires and needs of consumers. Technology proposes great opportunities for communication and interaction but lack of laws and regulations creates a threat for privacy and security. The internet may well be creating a new technical scenario, but the varied and complex social and technological transformations users are experiencing today have roots which can be traced back in time.
People certainly vary in their degree of conditionability as a function of personal characteristics related to the nature of the stimuli involved. In different countries, people are motivated by different factors and cultural images, unique values and religious traditions. In this case, it is crucial for art directors to avoid offensive remarks and religious images which can be negatively perceived by target audience.
Decisions concerning the choice of conditioned and unconditioned stimuli are critical to the outcomes of conditioning experiments. Art directors and copywriters should consider what is probably the most basic mood effect of all: people in a positive mood give more favorable ratings to objects (e.g., a particular brand or ad) than people in a neutral or negative mood. People in a positive mood are sometimes said to “see the world through rose-colored glasses.” However, this phrase also points to the problem that is endemic to classical models of judgment. Brassington & Pettitt (2001) underline that revising the sentences can help many companies to create a unique brand image of the company and appeal to mass consumers. Different straggles should be applied to on-line and off-line advertising.
Sustainability for gaming firms
To enrich the perspectives of the body of the study, the researcher has also conducted a literature review under the sub themes of sustainability accounting. This has been done in the understanding that business success can only be achieved through synergy, when all the organs of a business body function harmoniously towards the accomplishment of common goals. As such, the accounting facility of a company plays a vital role in the entire company sustainability stratagem.
Schaltegger S et al (2003) On sustainability accounting assert that once sustainability accounting has established approximate boundaries for sustainability at a global level then, in principle, the adjustments needed for the human system to become self-sustaining will be known. “Of course biological and physical resources are spread unevenly over the planet and this, as well as the multilevel nature of sustainability governance, means that obtaining such an overview presents a formidable challenge. ” (Opcit)
Lamberton, G. (2005) on Sustainability Accounting brings up useful information on the historical development of Sustainability accounting as well as how the disciple has evolved in past years. Stanners D et al (2007) focus on sustainability science in a way to find out what is sustainable requires measuring and monitoring.
“Because this form of calculation is very similar to the careful way we manage our financial lives it has been referred to as sustainability accounting. Sustainability accounting can be carried out at all levels and contexts of sustainability governance. Major areas of assessment include measures of consumption, resource use, and ecosystem change across a wide range of social, environmental, temporal, and spatial scales. ” (Op. Cit)
The resource has been relevant in broadening perceptions and perspectives on the dynamics and dimensions of the broad concept of sustainability.
The resource United Nations Department of Economic and Social Affairs, (2007) has been particularly useful in highlighting elements such as sustainability indicators and how these can provide information on any aspect of the interplay between the environment and socio-economic activities. Mitigating the peaking of world conventional oil production presents a classic risk management problem: ”
The source includes a few points which present valuable insight germane to the focus concepts of this research exercise.
Limitations of Literature review
The research exercise has endeavored to solicit as much detail as possible under the scope and objectives defined and implied in the thesis statement. Nonetheless the research exercise has not been in any way exhaustive and the researcher herein acknowledges the limitations of the research exercise owing to it’s encompass and goals among a host of other factors. The focus of the research, and as such the literature review, is thus limited to the time-frame, conceptual scope and objectives defined and implied in the thesis statement.
Data Presentation and Analysis
This section will present the results of the probe into The Macau gaming Industry to establish the profitability and attractiveness of the Industry in the conceptual framework of Porters Fives Forces Model upon which this research is leveraged. The data analysis components of this study entails data derived from gaming firms in China. The managers indicated that their entities boast of vast proportions of experienced personnel yet local Chinese companies are well versed with the dynamics of the Chinese market making the joint ventures a formidable and feasible move. The study conducted on the feasibility of the market share consolidation by Multinational gaming companies in China showed that for the first time in 7 years new business sales surged by up to 66% over the same period in the previous year. Data obtained from the company also showed that the companies premiums and deposits revenue also increased by 87.5 %.
Data obtained also shows that gaming firms in China are tapping the merits of transformation leadership model which is hailed most for its merits of facilitating the adoption of pro-change organisational management approaches. One manager particularly noted that China is experiencing phenomenal economic growth demonstrated by the growing GDP margins. He noted that if the current rate continues China will be a formidable economic force in the next fifty years.
More importantly; data derived from the manager shows that gaming firms strategy has largely been underpinned on attaching sufficient importance to the growing prospects of the purchasing power in the Chinese economy and market.
Porter’s Horizontal Forces
In tandem with Porter’s micro environment enlisting the horizontal forces of competitive competition, Macau is facing a growing a threat of the entrance of substitute gaming products and services. The Macau industry has weathered Las Vegas Competitions as noted in industry analyses conducted in related studies. Macau is still enjoying limelight and market dominance as the only part of China to permit gambling, the face nonetheless faces emerging threat of competitions from other regions in Asia. It is also important to consider that Singapore has drooped its 40 year ban and has passed intents for the erection f two huge Casino resorts. In addition to the foregoing there has been lobbying for the relaxation of gaming laws that may see the surge of new industry players in countries such as Thailand, Vietnam, Japan and Taiwan.
In Porters model the horizontal forces entail the threat of substitute forces and the entry of new competitors as well as the intensity of the competitive rivalry. The new industry players likely to emerge from the other regions in Asia will certainly bring new gaming products and services and pose a threat to the Dominance of Macau. The third aspect which enlists the intensity of competitive rivalry will spur transformation in the industry especially on the dimension of marketing as some players such Macau will seek to sustainability prospects through competitive advantage through improvisation.
Up to now Macau still dominates as a gaming industry oligopoly has thus remained as a profitable industry considering the quantitative evaluation of yearly financial data. This has meant that Macau gaming industry has remained attractiveness have been driven up the five forces largely boosted by the lack of substantial horizontal and vertical competition forms in the conceptual and theoretical premise advanced by Porter.
Figures and statistics provided by the Statistics and Census Service (DSEC) released data on the transformations and structural aspects of Macao for 2007. According to the data Macau posted outstanding economy activity in 2007 in the gaming, hotel and Wholesale fraternities boosted much by a corresponding surge of tourists into the region. Bracker, J. S (2008) notes that a the tertiary domains of commerce grew more notably than the secondary sector, the relative importance of the tertiary sector in Gross Domestic product (GDP) short from 85,1% in 2006 to 86.0% while on the other end that o the secondary sector dropped from 18.7% to 17.7%.
The analyst notes that in the year ending 2007 the total gross value added of the entirety of economic activity of Macau (Dominated y the gaming fraternity) rose remarkably by 32% over 2006. “The ratio of total gross valued added upon the gross yield of all economic activity rose by 0.2 % to 50.0% in the year 2007 whilst the ratio of total compensation of employees to total gross value added rose by 1.0 % point to 37.9%” (Bracker, J. S 2006)
Below is a table of the foregoing data evaluation supplied by Statistics and Census Service (DSEC, 2008). See gaming sector in the table
Sector Economic Activity Output
The study has shown that gaming firms in China have particularly employed transformational leadership models in tandem with the demands of the rapidly changing and growing Chinese economy held currently as the world biggest economy in the measures of parity share. The study shows that some gaming firms which have relocated their Headquarters to China for strategic reasons are pushing the sales acceleration strategy. One director states, “There seems to be a developing trend in the business approaches of gaming firms where in companies move their businesses and technical evolutions to setting up production bases, it clear that the central strategy is to start by focusing on occupying the huge Chinese market first.”
It also ascertainable that gaming firms have also paid considerable attention to the culture factor and hence modeled their strategies to run in tandem with the Chinese culture dynamics. In an interview with the researcher Principal Lecturer of International Strategy at Anglia Ruskin University and published author Jonathan Knowles envisages that some global firms face a few cultural barriers in conducting global business. He notes, “It depends on how culturally sensitive a product or service, some companies transcend cultural easily barriers others do not. Leisure activities for example such as eating out would have cultural barriers to their free and unlimited movement although of course cultural barriers do affect the types of products that might be shipped within a country. In others words a parcel service is the same in China as it is in Argentina. ”
On the other dimensions Udayan Raut-Roy (2008) holds that any company plying global markets in bound to encounter cultural hindrances in one way or another.
This is an illumination of the flexibility and dynamism wielded by global gaming firms in implementing its global growth and expansion stratagem. Cultural variances have resulted in failure in many gaming firms attempting global expansion. The PESTEL framework also comes in fitly in the collation and analysis of data derived from probed gaming firms in China. On the socio-political dimension of the Framework the China economic and market landscape can be viewed as an emerging play zone for the business global players. This is in line with the upbeat counties economic activity in a country of protracted political and economic isolation in past years.
China is attempting to reduce the gap between its economy and that of well establish economies of USA and various European Economies. This remarkable phase has also been characterised by the modeling of business regulatory framework to be more conducive and accommodative for global trade and gaming firms as China seeks to consolidate its position in the global economic and political pedestals. Such transformations have pervasive implications for business entities as outlined in Legal framework dimensions of the PESTEL Framework.
AS demonstrated in the foregoing; social dynamic of PESTEL model is of particular essence in exploring multi-dimensional strategies of gaming firms especially in culturally diverse and distinct markets like China. The model presents that social factors such as culture are invaluable to any attempts aimed at conducting holistic analyses of scenarios. Successful gaming firms in China have demonstrated dynamism and factoring cultural variance and modeling their business practices in line with cultural expectation set in the Chinese business environs.
The notable significance of the PESTEL framework in characterising Macau is the legal framework aspects that seek to illuminate an organisational aspects and environment from a legal and regulatory perspective. It is noteworthy on this dimension that the regulatory framework in Asia with regards to gaming has left Macau as the sole players in the gaming industry although other regions in Asia are relaxing the gaming laws to create working platforms for the establishment of typical gaming firms.
Conclusion and recommendations
Porter has advanced in his model that an unattractive industry in one in which all the forces , micro , and micro as detailed in his five forces framework, work in collaboration to drive down the profitability of the industry. In this premise, attractive industries are those where all the forces work in coherence to propel the profitability of the industry. In light of the foregoing, data obtained from the qualitative and quantitative research thrusts leads to the classification of the Macau gaming Industry an attractive industry basing on its upward profitability trend established through the application on Porter’s five forces model.
Further research must be conducted to bring into comparison the features and behaviors in the native and foreign precincts of gaming firms in light of framing up ways in which these can be assisted. Current and precedent studies on gaming firms are bereft of thrusts focusing on various entrepreneurial and business processes of gaming firms in the global sphere. More studies need to be done to explore dynamics and factors like sponsorship; marketing and human resource management challenges and dynamics of the gaming firms
Precedent studies on the strategies of gaming firms focusing on the environmental factors have been largely descriptive in nature. There is need for more empirical inquests into the subjects relating to the actual role of environmental aspects in influencing gaming firms. In conclusion it can be stated that the salient of the previous studies on the strategies of gaming firms have been generic in their regard of gaming firms as homogenous entities. Preceding studies have failed to draw lines between types, size, entry strategies among other distinguishing factors of the gaming firms as these lay significant bearing on the shape, functionality as well as short term, medium term and long term pathways of the gaming firms.
References
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