General Casino Resort Value Chain There are two value chains, one is the general resort value chain and the other is the specific casino value chain. Real Estate development—procuring land developing the plot. Global Casinos & Gaming Industry Profile & Value Chain Analysis Summary Global Casinos & Gaming industry profile provides top-line qualitative and quantitative summary information including: market size (value 2012-16, and forecast to 2021). The profile also contains descriptions of the leading players including key financial metrics and analysis of competitive pressures within the market.
A value chain is a set of activities that an organization carries out to create value for its customers. The traditional VC suits more to manufacturing or products (tangible) then to services – an argument to which I wouldn’t disagree as well. Though not all but a few parts of the value chain could still be applicable in conceptual sense. In this article, I attempt to analyze one service sector and then superimpose the Porter’s value chain over the same.
- The global online gambling industry grew by 12.8% in 2017 to reach a value of $47,036.6 million. Sports betting is the largest segment of the global online gambling industry, accounting for 48% of the industry’s total value.
- Global value chains have become a dominant feature of world trade, encompassing developing, emerging, and developed economies. The whole process of producing goods, from raw materials to finished products, is increasingly carried out wherever the necessary skills and materials are available at competitive cost and quality.
Services differ from products in many ways – inseparability (simultaneous delivery and consumption), intangibility (can only be experienced), perishability (can’t be stored) and heterogeneity (variability in performance of the same service). The details of each of these basics can be a topic of marketing but the essence is that due to the same reasons, same service would or could differ in performance and thus price. Such aspects not only increase the complexity with regards to delivery but also maintaining performance levels, and most importantly marketing. Since service can’t be stored, marketing the same becomes an effort in itself. Before we move to the value chain, we must recognize a very vital feature of service – value addition happens at each and every stage. For instance, when you book a hotel room online or over phone, although the real need is to occupy the room for one night (imagine as a virtual product), each stage from booking to commute to hotel, contact with staff and actual experience at the hotel form part of the service (and thus value). In sum, customer value is added at each stage of the value chain and not at the very ends (product and service of Porter’s VC).
Now that we’ve a basic understanding of how services are different from products, let’s look at the example of an airline to draw the value chain for services industry. In this case, let’s break the value to the customer into two parts – primary and secondary. The primary value (or need) is to book a ticket from A to B, and secondary value comes from aspects such as searching the flight tickets, booking channel – phone, internet, mobile, checking in assistance, on time performance, courtesy of flight staff, in flight experience and baggage handling. As you may observe, unlike for products whose consumption and performance (see Diagram 1 – example of auto industry) of the final products (tangible such as sports equipment) bring the value to the customer, for services each stage is extremely essential to fulfill (supplement) the primary (core) need of the customer. Moreover, service at each stage (primary or secondary) would vary in performance each time it is performed.
Diagram 2 provides a flavor of how the Porter’s VC wouldn’t perfectly fit for the service industry for the very properties and factors described above. A few observations and takeaways are worth mentioning.
- Each stage is essentially a value chain in itself delivering value (though supplementary) to the customer. Consequently, inbound logistics, operations, outbound logistics and service form a product in themselves.
- Advertising (prospecting) and sales become as most important as service. The intangibles of a service need continuous push and publicity.
- CRM holds the key to retain customers and feedback becomes a necessary evil.
- In all, each stage should work coherently and speak one language (fulfill one mission) to influence customer preference. Incoherence of any one stage from other could impact the ‘Dance’ (service metaphor invented in this article) i.e. its not just the delivery of primary service but also of supplementary services that become part of the full service (or single product).
- Most importantly, HR management plays a vital role in each stage.
In conclusion, we can say that though Porter’s VC doesn’t fully apply to the service industry, it provides the fundamental framework to analyze an industry. The extent of applicability would vary across industry depending on many factors two of which are product and service.
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Industry Value Chain Example
Gambling and the Future of Macau > Gambling - Value Chain
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