1. How would you characterize competition in the gaming industry in Macau?

The competition of gaming industry in Macau is intense as explained by 5 forces model as follows: 1. Suppliers: because unemployment rate in Macau is low, it is difficult for Macau to recruit new employees to support business expansion. In particular, employees who work as junket operators have to be professional. Moreover, their commissions are high, and perhaps, Wynn has to pay higher incentive to attract junket operators to work in the company. 2. Buyers: there are six principal gaming players in Macau, and Wynn has only one casinos. Therefore, buyers have several choices to choose. 3. Rivals: Wynns competitors have strong positioning and uniqueness to compete. For example, Venetian expands business to Cotai to penetrate non-gaming segment. Galaxy penetrates Asian customers, and Melco provide customers with good customer service. 4. Potential entries: Macau is the only place in China to be allowed by the government to have casinos. Therefore, there are no prospective entrants from the mainland. Moreover, Special Administrative Region (SAR) controls and permits to allow casinos in Macau. Thus, it is uneasy for new entrants to open new casinos in Macau. Furthermore, the number of gaming table for casinos has to be allowed by SAR. Such a rule is another obstacle for new entrants. 5. Substitutes: there are plenty of entertainments for buyers to choose besides gambling such as travelling, sports and so on. In conclusion, although prospective entrants may have difficulty to enter the industry, for current environment, Wynn confront hard competition as well because of competitors, other entertainments, and laborers as explained above. 2. From the institution-based view, what institutional developments have facilitated the development of this industry? In my opinion, institutional factors that support the industry are related and supporting industry and rivalry. Even though new entrants need to get permission from SAR before starting new casinos in Macau, such a rule seems to undermine competition in the market. However, the rule is beneficial because SAR can control a player not to dominate the market, so rivalry without dominating the market by one company supports developments and competition. Besides that, the government also facilitates and supports the industry by developing Cotai area to support business expansion. The fact that gamble business in Macau is robust is strong foundation supported by the local government. 3. What resources and capabilities were behind the performance of Wynn Macau? There are two main factors of Wynns success which are VRIO and opportunities in SWOT. As for VRIO, especially value, Wynn has strong value proposition which is to penetrate upper end customers. When Wynn has clear target market, it can focus on customers satisfaction well. Hence, Wynn invests in facilities less than the others, but it can gains more profit. This is the reason that Wynn has strong financial performance and gains the most profitable performance. Moreover, external factors play a role in success of Wynn as well. Because Chinese economy is robust, Chinese currency appreciates against Pataca currency. As a result, Macau gains more Chinese visitors. That is opportunities for Wynn to gains more customers. Finally, Wynn gains

financial resources from issuing stock in Hong Kong and the U.S. markets, so the company gains capital to expand the business. 4. What factors may be able to explain the change in its recent performance? One of the threats that undermines Wynns profitability is lawsuits between Mr. Kazuo Okada and Mr. Steve Wynn who are executives of Wynn company. Because Wynn are upset Okada that he makes a decision to build a casino in Philippines, Wynn hires an investigators to prosecute Okada because he violates the American law. However, Okada argues that Wynn wants to detract shareholders attention from his scandals because Wynn donates a great deal of money to university in Macau. Such a donation may bring about gaming right in Macau in the future. In brief, conflict of interests in Wynn of two executives is one of the threats to undermine its profitability (Anonymous, 2012). Moreover, Chinese government plans to build casinos in Shanghai as the second Macau. If casinos in Shanghai emerge, that negatively affects Macau because Shanghai has advantages over Macau such as location in the mainland, shopping center, and so on. Therefore, financial assessment is not enough to measure the companys performance. Wynn should measure the performance from many aspects by using balance scorecard such as efficiency of employees, satisfaction of customers, social responsibility, innovation, and diversification. In the future, Macau may not be center of casinos in Asia. Wynn should not rely on only gambling business. 5. What conclusions can you make about gambling and its impact on society? Gambling has been debated in Thailand for a long time. Not only is gambling relevant to formal and informal institution in Thailand, but also it is related to ethics and corruption. In my opinion, I agree that the gambling industry should be legal in Thailand. First of all, formal institution including law, regulations, and rules in Thailand prohibits gambling business. Moreover, 95 percent of Thai people hold on to Buddhist precepts as their norms, cultures, and ethics. According to Subhadr Panyadeep, who is director of the Institute for Training and Curriculum Development, the Buddha stated that gambling brought unhappiness, suffering, and hardship to Buddhist people. Certainly, the fact that the government legalizes gambling business in Thailand causes damages to Buddhist precepts as Thai ethics and culture (Macan-Markar, 2004). In fact, there are a number of underground casinos in Bangkok even though casinos violate both formal and informal rules. The reason is patronage system which is another informal norm in Thailand. While illegal casinos still operates, the owners gain profit more than 1 billion dollars a year, and the police gains 300 million dollars for bribes. Although authorities close casinos, the casinos reopen later on. When governmental officers receive bribes, and it is difficult to prohibit them from corruption, in my view, the casinos should be legal in Thailand. Thus, bribes that should illegally be paid to the police should be paid to the government as corporate tax, and the government can spend such an amount of money to develop the country (Phongpaichit, 2008). In fact, when Thai Buddhist people want to play gamble, it is meaningless to hold on to Buddhist precepts as norms. On the contrary, the fact that casinos become legal helps to reduce corruption of the police and easily control casinos.

Reference

Anonymous (2012). Wynn to Lose. Retrieved from http://www.economist.com/blogs/schumpeter/2012/02/casinos January 29, 2013 Phongpaichit, P. (2011). Legalise Gambling in Thailand? Retrieved from http://www.bangkokpost.com/learning/learning-from-news/254372/legalise-gambling-in-thailand January 29, 2013 Macan-Markar, M. (2004). Thailand: Hardcore Gamblers Tarnish Countrys Buddhist Image. Retrieved from http://www.ipsnews.net/2004/06/thailand-hardcore-gamblers-tarnish-countrys-buddhist-image January 29, 2013