International Business Strategy: A Case Study of Wynn Macau

This case study explores the international business strategy of Wynn Macau, focusing on the competition in the gaming industry of Macau, institutional developments, resources and capabilities behind the performance of Wynn Macau, and analysis of Wynn operations.

Running head: MANAGEMENT
International business strategy: A case study of “Wynn Macau: Gambling on the Edge of
China”
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Table of contents
1. Competition in gaming industry of Macau............................................................................2
2. Institutional developments.....................................................................................................3
3. Resources and capabilities behind the performance of Wynn Macau...................................4
4. Analysis of Wynn operations.................................................................................................5
References..................................................................................................................................6
Bibliography...............................................................................................................................8

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1. Competition in gaming industry of Macau
Law no 16/2001 and Administrative regulation 26/2001 governs the dynamics of the
gaming operations in Macau. The nature of the competition is contracts, which legalizes the
entry of the casinos legal into the jurisdiction of China. These contracts are subjected to
renewal from the government. In this, concessions are awarded to the casino operators. One
of the limitations in this context is number of gaming tables, which the casinos can access
(Peng, Sun & Liu, 2007). The caps set by the government increases between 3 and 5%
annually. The readings from the table caps indicate the need for developing the prospect of
the non-gaming revenues. Typical evidence of this lies in the possession of only 26% of the
revenues earned from the gaming tables.
Diversity prevails in the network of the competitive dynamics. The geographical
locations include Macau peninsula, which is considered to be contiguous with the south of
the mainland China. This is joined by the ferry terminal of border gate. The liberalization of
the gaming industry in Macau is governed by Special Administrative Region (SAR) of the
People’s Republic of China. According to the arguments of Morschett, Schramm-Klein and
Zentes, (2015), this approach has attracted number of bidders to operate casinos in the
former threshold of the Portuguese enclave. The era of 2001 the gross gaming revenues
accounted for US$2.3 billion. By 2011, the amount increased to US$33.5 billion. Spacious
casinos attracted 28 million visitors, which was a record breaking performance from 10
million visitors in 2001.
January 2012 witnessed an increase in the number of visitors from the mainland
China by 18.6%. This accounted for 60.7% of the total visitors, which was 2,461,640.
Visitors from the other countries were- Hong Kong (26%), Taiwan (3.5%), South Korea
(1.9%), Japan (1.3%) and Southeast Asia. According to the current trends, the gaming pie
comprises of the players- Sociedade de Jogos de Macau, Galaxy Casino, Wynn Resorts,
Venetian Macau, MGM Grand Paradise and Melco PBL Jogos.
Based on these facts and figures, it can be said that the competitive rivalry in the
gaming industry of Macau is quite high (Peng, Sun & Liu, 2007). Bargaining power of the
buyers and suppliers is high, compelling the personnel to come up with something creative
for achieving large scale customer satisfaction.

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2. Institutional developments
At the initial stage, mention can be made of the plans regarding venturing into the
Chinese markets in Macau. Financial flexibility available in three quarters assisted in
enhancing the fame and glory of the gaming business. First phase of the property
development in Macau costed approximately US$ 1.1 billion. Flexibility also reflected from
the resources and capability of supporting 380 gaming tables, 1270 slot machines in 205,000
square feet of casino space and 46000 square feet of retail space (Peng, Sun & Liu, 2007).
This successfully placed Wynn Macau at the upper end of the market. Openings of the Cotai
helped in maintaining consistency with monitoring of the effect on the organizational
performance. For coping up with the external challenges, plans were made to launch a portion
of the Wynn Macau. The main focus in this was the provision of additional support to the
clients regarding expansion.
Recurring dividends to the shareholders was one of the other developments. Social
dividends was also considered for preserving the Chinese culture and heritage. This was
through the means of donations of Chinese vases, the value of which was US$ 12.8 million.
Auctions was conducted for making the purchases related to the artefacts. Mention can be
made of the return on investments in extraordinary collection of porcelain vases from the
Qing dynasty of China (Peng, Sun & Liu, 2007). It was in the era of 2008 that Wynn Macau
bagged two prestigious awards of Mobile Five Star rankings. The hotel was the first to bag
such prize in the threshold of Macau. Reinforcement of the role of leadership altered the
dynamics of gaming business. The focus was shifted to international travel and leisure
destination for the guests coming from the foreign lands.
In March 2012 dominance of Cotai enhanced the fame and glory of the business
dynamics. Typical evidence of this lies in 600 five star Conrad suite and rooms, 1200 four
star holiday inn rooms and 300,000 square feet of meeting space, retail outlets and gaming
space. The third quarter further expanded the area for accommodating more rooms for
entertainment, retail and meeting facilities. Venetian business has positioned itself in such a
way that has achieved the leading position in the non-gaming segment, accounting for 30% of
the hotel guests, belonging to the segment of families and travellers. Thompson, Strickland
and Gamble, (2015) opines that strategic approach in this direction led to the enhancement of
the organizational effectiveness. The major drive behind this is the integration of the business
model into the premier gaming business for upgrading the standards and quality of leisure

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travel. The aim in this direction was increase the attractiveness of the destination for luring
the tourists.
3. Resources and capabilities behind the performance
of Wynn Macau
Casinos of large area attracted the bidders to make investment in Macau business.
Typical evidence of this lies in the increase in the number of visitors. Within this, mention
can be made of the casino tables, which generated high revenues in the gaming business.
Visas provided the clients with the access to venture into the foreign markets for gaining
insight into the prospects for setting up business there (Peng, Sun & Liu, 2007). Reference
can be cited of Individual Visit Scheme (IVS, which upgraded the number of visitors to the
threshold of Macau. Interesting facts in this context are Chinese penchants for the game of
fortune and Chinese currency, which added to the prospect for the growth and development.
Contracts enhanced the relationship between the companies, indicative of the
financial aid and assistance for executing the operations. Awarding concessions to the casino
operators was a means for luring them to the company services. Renewal of the terms and
conditions of the contracts reflected an approach towards averting encountering illegal cases.
Gaming tables, caps and VIP tables were the major sources of revenue for the gaming
business. One of the sources of income was the game of baccarat. The personnel in charge of
operating the junket receive commission payments. The capabilities of the junket operators
served as middlemen, lending high amounts for luring the clients to play at the VIP tables
(Peng, Sun & Liu, 2007). Commitment towards purchasing minimum amount of rolling chips
in the casinos shaped the agreements. In this, the credit checks formed a crucial element in
high rollers.
Casino properties were other resources, contributing in the development of the
gaming business in Macau. The division for the properties is as follows- 16 in Macau
peninsula, 4 in Taipa. Apart from this, reference can be cited of the retail spaces and hotel
rooms, which enhanced the productivity. Sub-concessions formed an essential component for
upgrading the standards and quality of the gaming operations. Stock exchange, S& P
500/NASDAQ enlisted Wynn as one of the companies under the Main Board. In this, the
investments were made in gaming tables, slot machines, casino space and retail space (Peng,

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Sun & Liu, 2007). Recurring dividends to the shareholders was one of the other capabilities
towards influencing the purchasing power and decisions of the clients and the customers.
Mention can also be made of the cultural heritage artefacts like vases of Buccleuch
and porcelain. Extraordinary collections of these vases added positive rankings to the hotels.
Leadership skills, abilities and competencies need to be praised for enhancing the standards
and quality of the destinations, adding to its attractiveness.
4. Analysis of Wynn operations
Integration of the business model has recreated Asia’s business in terms of gaming. In
this, the primary components are leisure and conventional destination. The ultimate plans
comprise of conglomeration of the hotels and resorts for offering quality resources for
achieving large scale customer satisfaction. Target segmentation is apt for Wynn in terms of
adding focus into the gaming business. Rugman and Verbeke, (2017) states that world class
hospitality standardized the market operations of Asia. Transparency in the operations lured
the clients and the customers. International Awards intensified the competition between the
brands. Reference can be cited of EBITDA growth in the third quarters, which solidified the
financial transactions. Customer Award upgraded the standards and quality of the customer
service. Typical evidence of this lies in The House of Dancing Water, which was a Franco
Dragone Entertainment Group creation.
Kolk, (2016) is of the view that fulfilment of the targets indicates success in terms of
demonstrating top line growth with outstanding operating leverage. These aspects reflected
the capability towards improvising on the organizational effectiveness. Strategic approach in
this direction helped in systematizing the operations related to causing the advent of change.
Long term goals proved beneficial for securing the future of the company, especially that of
the gaming business. Within this, Zander, McDougall-Covin and Rose, (2015) focuses on
unique selling proposition is apt in terms of increasing the standards and quality of the
products of gaming business. On the other hand, Olson et al., (2018) assumes that acquisition
expanded the scope and arena of the business. The nature of recruitment was tight and strict.
Typical evidence of this lies in the unemployment rate of 2.2%.

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References
Kolk, A. (2016). The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1),
23-34.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international
management (pp. 978-3658078836). Springer.
Olson, E. M., Slater, S. F., Hult, G. T. M., & Olson, K. M. (2018). The application of human
resource management policies within the marketing organization: The impact on
business and marketing strategy implementation. Industrial Marketing
Management, 69, 62-73.
Peng, M. W., Sun, W., & Liu, X. (2007). Global strategy. Posts & Telecom Press.
Rugman, A., & Verbeke, A. (2017). Global corporate strategy and trade policy. Routledge.
Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy:
Concepts and readings. McGraw-Hill Education.
Zander, I., McDougall-Covin, P., & Rose, E. L. (2015). Born globals and international
business: Evolution of a field of research. Journal of International Business
Studies, 46(1), 27-35.

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Bibliography
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international HR to talent management. Journal of World Business, 51(1), 103-114.
Dodgson, M. (2018). Technological collaboration in industry: strategy, policy and
internationalization in innovation. Routledge.
Hutzschenreuter, T., Kleindienst, I., & Lange, S. (2016). The concept of distance in
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of Management Reviews, 18(2), 160-179.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher
Education.
Welford, R. (2016). Corporate environmental management 3: Towards sustainable
development. Routledge.