Harrah’s Database Gamble Essay

Harrah’s is the world largest provider of branded casino entertainment; it has around 25 million customers (2001) 25 casino with 40,000 gambling machines in 12 states. For years it had been a fairly small gambling company but, by 2001, had emerged as the second largest in the industry. By the mid-1990s, the gambling Business was flourishing and it was difficult for Harrah’s to survive in the markets due to intense competition, so they came up with a strategy of introducing a customer relationship management (CRM) software which helps to know their customers exceptionally well. A CRM system coordinates all business processes for dealing with customers, which in Harrah’s case includes both gambling and hotel customers. .The overall system Harrah’s developed has been named WINet (Winner’s Information Network) . The heart of CRM strategy was customer loyalty program called total rewards . Harrah’s CRM-based strategy appears to be a great success. Harrah’s say it keeps the customer information confidential and that it is not out to exploit gamblers. However, opponents of the gambling industry have criticized Harrah’s use of customer data. Harrah’s claims the Total Rewards program actually gives these people rewards instead of encouraging them to gamble more. He Further clarified that All we used to know was how much money we made on each machine, but we couldn’t connect what kind of customer used them , but with the help of technology he could get all the data of the customers. 1. Analyze Harrah’s using the competitive forces and value chain models. Harrah’s is facing intense competition. This competition is coming from established competitors as well new players Customers have many options in terms of how, when, and where they gamble. Harrah’s is using its new business strategy to create a new service, and catch its customers. Harrah’s new information system is having a strategic impact on its operations, sales and marketing, and service activities. 2. Describe Harrah’s business model and business strategy. How do they differ From those other gambling companies? Harrah’s business strategy is a customer relationship management strategy. (CRM). CRM system coordinates all business process for dealing with customers. Harrah’s uses its CRM software to identify and track its profitable customers. Harrah’s Total Rewards program allows gathering information about its customer’s gender, age, location, games they like to play as well as reward its customers for the amount of time that they spend gambling at Harrah’s casinos. Harrah’s competition relies on fancy reward schemes, due to which Harrah’s is getting to know its customers by studying and analyzing their behavior. 3. What role has database technology played in Harrah’s strategy? How Critical is it to the success of the company? Database technology is the heart of Harrah’s strategy. Harrah’s database Record information about Harrah’s customers, including gender, age, home location, Favorite games, length of playing time, size of bet, number of bets, average size of the bet, and total points. Harrah’s uses information for its business Processes to create marketing programs for its customers and also retaining in its customers each time a customer makes a transaction his record is updated. Harrah’s all casinos have access to the centralized database because of which Harrah’s employees are able to view each customer’s record and offer that customer same treatment regardless of which casino the customer visit. Database technology helped them to gain a 13% profit in the first year itself. 4. How did Harrah’s use CRM software and modeling tools to address the Company’s problem? Harrah’s uses CRM software to organize business processes that deal with Customers. After combining its gambling and hotel reservations data, Harrah’s uses its CRM software to build gambling profiles for each of its customers, analyze the customer data, and create different marketing programs. Harrah’s WINet system enables the company to estimate how much money the company can earn from a customer over a period of time. 5. Are there any ethical problems raised by Harrah’s use of customer data? Explain your answer. There is an opportunity to gain more money by selling the customer data but Harrah’s has said that it will not sell customer data to any organization. Some competitors criticized that Harrah’s is exploiting gamblers, If this argument is true, then encouraging a person with a gambling addiction to spend more of his money, is obviously wrong. He Justify by saying that the Total Rewards program actually gives these people rewards instead of encouraging them to gamble More. 6. What problems can database technology and customer relationship Management software solve for Harrah’s? What problems can’t they address? The database Technology and customer relationship management software enable Harrah’s to Maintain sharp customer profiles, analyze its data to identify the most profitable customers, improve its customer service, and offer consistent customer service. The database technology and customer relationship management software help Harrah’s achieve a competitive gain in the gambling industry. The database technology and customer relationship management software cannot address organizational issues, such as the switch from a casino-focus to a Customer focus, loss of privacy fears, and gambler exploitation criticisms.