Intensity of Competition in the Casino Gambling Industry
Casino Gambling is one of the most developing industries in the United States of America. A considerable number of people have endorsed the act of gambling in their life. More companies have taken the initiative to venture into the business though they are faced with many challenges such as competition from existing firms.
1: Who are the buyers in the Casino Gambling Industry?
The gambling industry has an enormous number of buyers since people in the U.S value the activity. The customers in the Casino industry include the gamblers, retailers, and wholesalers who bring gambling products to the target market. A person who moves into a casino has the intention to gamble and make winnings, so the product they are buying in the setup is the leisure of playing and the expected financial returns. In any industry, the buyers have a bargaining power; may it be minimal or exaggerated. For the case of a casino, the bargaining power of buyers is moderate because most of them will love to move to places where the services are affordable, and they expect better returns compared to low-quality sites. When a casino has high prices for their services, some of the customers may have to move away, and the best way to a casino to maintain its customers is to have moderate prices. The prices cannot go very low, which signifies that the consumers have medium bargaining power since the prices have a level they cannot go below.
Every industry requires the set suppliers to avail the needed products. For the case of a gambling casino, suppliers are necessary. Some of the crucial vendors in the industry include soft and hard drink distributors, sellers of computerized gaming tools, and attendants in the joints (Thompson, 2008). For any industry, the possibility of having a supplier bargaining power is very high. The reason for supplier bargaining power varying is because of the availability of multiple sellers. Hence, the casino owners may choose to buy from companies selling at the lowest price and have value for their products. The more the sellers, the higher the bargaining power they have because the customer will choose from which seller to buy. In the current economy, the bargaining power of casino suppliers is medium because many people in the U.S have started appreciating gambling.
3: Which are the firms that may want to enter the Casino Gambling Industry?
In any industry, competition is normal if growth is to be experienced. The casino industry is not an exceptional when growth is considered. In the 19th century, gambling was not very widespread, but as the world has been evolving, growth is inevitable. New firms enter the gambling industry each day, and some of the firms are those dealing with drinks, companies with improved gambling tools, and availing of highly trained attendants. New entrants in the casino gaming world are very hard to succeed. A newcomer in gaming world faces significant challenges due to the multiple agreements and licenses needed from the state. Another challenge for a new person doing well in the casino gaming is the large amount of capital required to purchase the necessary tools like computerized gaming machines and computers. New entrants have very high chances of facing threats when they try to venture in the gambling industry because of the competition they are to face from the already established firms (Eadington, 2009). For a young company, it is necessary to have high prices for products to ensure there is a return on investment, but this is not possible since the already established companies lower their prices while providing quality services to ensure they have a competitive advantage.
4: Identify some Substitutes for the Casino Gambling Industry?
No business can lack another to substitute its operations in the case it is not operational. Casino gaming faces competition, and there is the likelihood to be replaced by online gaming consoles. Some people are likely to be influenced to have their gaming tools such as PlayStations in their houses and avoid visiting casinos. Substituting casino gaming with other forms of gaming possesses a low level of threat to casinos because the gaming is addicting and enjoyable hence people prefer it more than playing at their homes. Substituting casino gaming will take time unless the government regulations are implemented to control the number of casinos in U.S.
5: Casino Gambling Industry and the Level of Intensity of Competition.
Casino gambling industry deals with gaming activities that people intend to have a financial gain and at the same time enjoy their leisure (Thompson, 2008). The casino industry is supported by a group of other facilities such as retail shops, restaurants, cruise ships, and tourists’ attractions sites that act as the primary motivators for the visitors to come to the locations. The level of intensity of competition in the Casino industry is very high because for any business to have room for operation in these areas, it must have excellent services because casinos are associated with wealthy people hence they need fancy places. For any party involved to have a competitive advantage, it must have quality services and facilities without much concern that the prices will increase because most of the people visiting the casinos care less of price and more of quality.
Work Cited
Eadington, W. (2009). Capital, rent-seeking, and risk taking in the casino industry and the economy at large1. International Gambling Studies, 9(3), 181-187. http://dx.doi.org/10.1080/14459790903348210
Thompson, W. (2008). Governing Fortune: Casino Gambling in America. Journal of Gambling Issues, 21, 120-124. http://dx.doi.org/10.4309/jgi.2008.21.15
