Harrah's Reflection

Harrah's is known for their incentive marketing and strong customer service. While others are busy building and investing in bigger and flashier casinos, Harrah's is just focusing on what the consumer is looking for.

Harrah's has been very successful with their data mining through their current IT services and need to adjust their strategy to remain one step ahead of the competition. They have established a strong base and essentially set the standards for the other casinos to live up to.

I agree with the consultants recommendation to continue to invest in IT services and business analytics. This has been a successful strategy that has set them apart from the other casinos they just need to continue to evolve their process.

A potential step for Harrah's is to combine their business intelligence software with social software to take it to the next level. In this article http://www.readwriteweb.com/enterprise/2011/01/business-analytics-predictions.php they discuss this as an option. This article mentions having consumer pick their own offer from a mobile site to take advantage. Some people may receive offers in the mail, but disregard them so you can't track what they are responding to. By allowing offers on a mobile device you can increase the consumer database real time as players are in the casino.

Harrah's could operate with business as usual and still remain successful, but to maintain a large edge over their competition they need to continue to evolve their practices to the next level.

Pandora Reflection

I think we are all on the same page, that Pandora needs to make a change to increase revenue or else it will only be a matter of time until Pandora closes up shop. Going forward they have a few very feasible, very possible options, but I believe there is one that makes the most sense.

The option that makes the most sense is moving to a freemium business model. What this means is that you have a basic version that is accessible for free to everyone and an upgraded version that is available for super users at a cost. You still have the availability for advertising revenue on the free version while keeping it unobtrusive for the user.

This article http://techcrunch.com/2011/09/04/complete-guide-freemium/ talks about pricing strategy using the freemium model. You can incorporate another option mentioned by allowing it to be free to a point, but after, say 40 hours you are capped out at the free version. So the user can either wait until they are reset at zero in the following time period or they have to pay for unlimited listening ability.

Another option that the consultants brought up is the store model similar to iTunes. If you like what you hear, buy it with Pandora. I think this is a great option and one I hadn't thought of prior to the presentation. However, I am concerned about the investment and time that it would take to launch this process and get customers to convert from iTunes or Amazon to the Pandora Store. This may become a more viable option down the road, once we have a strong revenue stream from the freemium method and advertising.

My recommendation would be to explore the freemium option with the support of advertising in the current time frame. This requires little to no additional investment and could be implemented very quick. Down the road once they are more stable, I think it would be smart to revisit the idea of an iTunes type store to purchase music.

IT Investment Exercise

Introduction

At the request of senior management I have put together a report detailing the options Montclair Computer (MC) is currently faced with. Do to the success we have experienced with our store front in the Montclair, New Jersey, market we are now faced with the opportunity for growth. A natural next step would be to expand into the online market through launching a website, however as we grow as a company there is also a need to implement an ERP system. In the following report I take you through each option as well as my recommendation based on this information on how to proceed. If you have questions or require further information, please don’t hesitate to follow up with me.

Strategic Assessment

As we begin discussions to move into the online space we need to be aware of that market place. Please reference the information below for a SWOT analysis of MC.

Strengths -          Established customer base in Northern New Jersey/Montclair area -          Specialized product	Weaknesses -          High level of competition -
Opportunities -          Launch Website -          Differentiation through services/unique characteristics	Threats -          Constantly changing technology -

Below is a snapshot of the three top competitors in the online space that MC would have to face.

	Competitor 1	Competitor 2	Competitor 3
Name	Alienware	Digital Storm	Cyber Power PC
Website	http://www.alienware.com/	http://www.digitalstormonline.com/	http://www.cyberpowerpc.com/
High End	Alienware Aurora	Black Ops	Xplorer X7-7500
Price	Starts at $1,499	Starts at $1,481	Starts at $1,539
Low End	Alienware X51	Special Ops	H61 Configurator
Price	Starts at $699	Starts at $799	Starts at $489
Custom	Yes	Yes	Yes

SWOT Analysis: Alienware

Strengths -          Established customer base online -          Specialized product	Weaknesses -          High level of competition -
Opportunities -          Differentiation through services/unique characteristics	Threats -          Constantly changing technology -          New compeition

SWOT Analysis: Digital Storm

Strengths -          Established customer base online -          Specialized product -          Award recognition	Weaknesses -          High level of competition -
Opportunities -          Differentiation through product	Threats -          Constantly changing technology -

SWOT Analysis: CyberPower PC

Strengths -          Established customer base online -          Specialized product	Weaknesses -          High level of competition -
Opportunities -          Differentiation through pricing	Threats -          Constantly changing technology -

As you can see, by entering the online space we will be facing a high level of new competition that has been operating in this space for some time now. By looking at the SWOT Analysis for each company we will be facing most of the same issues. Our only option is to look for ways to differentiate ourselves and set ourselves apart from our competition.  

Porter’s 5 Forces for Montclair Computer

1 - Existing Competitive rivalry: Rivalry is high because there isn’t that much difference in the technology that is available. Any true innovation that happens is quickly mimicked by competitors and therefore becomes irrelevant. MC currently competes against companies both online and offline even though they only operate offline.

2 - Threat of New Market Entrants: The threat of new competitors is low to moderate because there is a high investment needed to get into the market of high end gaming computers. There is a high level of brand loyalty for positive experiences with the consumers as well assuming nothing technologically changes.

3 - Bargaining Power of Buyers: The bargaining power of buyers is high because of the technology used in these high end computers is similar across models from competitor to competitor. Also, being a niche market to begin with the number of consumers is limited to the number of firms there are that sell these computers. There is a high chance of a consumer switching brands if they have a bad experience.

4 - Power of Suppliers: The power of suppliers is high because the best technology with a reliable reputation can be hard to come by. For example, MC uses nVidia graphics cards, which is a high end product with a strong reputation, so a lot of our competitors could use the same technology.

5 - Threat of Substitute Products (including technology change): The threat here is substantial. Technology changes every day, so today you could have the top product, but tomorrow you could become outdated. You would need to keep a system and budget in place to keep up to date with upgrades. In addition, since the power of suppliers is strong here if your system and a competitor use similar hardware or software the product becomes less the driver of a purchase then other services or pricing.

Strategy Analysis of Options

Through differentiation we can choose to set ourselves apart by pricing, services, unique characteristics, niche markets, direct communication, packaging, or by the product itself.

Our current options are to launch a website or implement an ERP system. Both are reasonable next steps and needs to fit the growing company. However, we need to choose how to move forward carefully to maximize our investments while maintaining/growing our current customer base.

By launching a website, we are increasing our market share and visibility. Implementation of the website would take 3-6 months and have an initial investment of approximately $54,000, but it would allow for MC to bring in incremental revenue of $6,500 a month. The issue is would this incremental revenue be truly additional revenue from consumers outside of the Northern New Jersey area or is this revenue from consumers who are already aware of MC, but just decided to purchase online and not through the store front. This would allow MC to differentiate itself through direct communication via the website and making the market aware of the unique offerings and customizations that only MC offers.

By implementing an ERP system, it would take up to two years to implement and time still after that to fully realize the savings due to the system. However, it would allow for you to have the control over your processes to maximize efficiency across your business. Focusing first on the SCM module and then the others over time, you recognize savings through ordering materials, timing, and customer satisfaction. This would allow MC to differentiate itself through service, by connecting each step of the process through the ERP system it increases efficiency and customer satisfaction over time.

Strategically, implementing the ERP system initially and waiting on the website would be the best fit for Montclair Computers. As a growing company, there needs to be a strong foundation in place to support the organization as it evolves. An ERP system would be just the foundation that MC needs to move forward successfully.  

Schedule Analysis

In a separate email I sent to you a MS Project file with the schedule for the ERP implementation with all of the information provided as well as the expected duration dates which were established using PERT Analysis along with a network diagram which shows the critical path for the project.

Based on the information in the MS Project file I sent, it is estimated that this project will take approximately 1 year and 10 months. This estimation is just shy of the 2 year estimate that was provided to me. However, if you decided to do this implementation and the website it would put it over the 2 year limit with the additional 3-6 months for building and implementing the site.

In addition, if task E2, deciding what processes needed to be customized, took double the amount of time it would not affect the timeline for implementation of this project. In looking at the critical path, this task is not one that would push back the deadline at this duration. The next task that has E2 as a predecessor is E3 which also has E1 as a predecessor.  Task E1 would still take longer to complete then if E2 took double the duration to be completed.

However, if task E1 took twice the amount of time to complete it would delay the deadline of the project because this task does fall on the critical path. Therefore, delaying this task delays multiple steps between now and the completion of the project by the amount of which this task is delayed.

Investment Analysis

Website - 6 months duration
	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Initial Expense	54,000	5,000	5,000	5,000	5,000	5,000
Revenue		6,500	6,500	6,500	6,500	6,500
	-54,000	1,500	1,500	1,500	1,500	1,500

ERP Implementation
	Year 1	Year 2	Year 3	Year 4	Year 5
Expenses	100,000	50,000	50,000	40,000	40,000
Savings		50,000	90,000	90,000	90,000
	-100,000	0	40,000	50,000	50,000

Based on the above information I would go with the ERP implementation because it shows a greater return year over year and covers the initial investment quicker than the website would recover the intitial investment.

References:

-          Alienware: http://www.alienware.com/

-          Digital Storm: http://www.digitalstormonline.com/

-          CyberPower PC: http://www.cyberpowerpc.com/

-          Differentiation Strategy: http://www.mikromarkt.eu/pdfs/uk_modul_1_6.pdf

-          Porter’s 5 Forces: http://www.quickmba.com/strategy/porter.shtml/

Harrah's Case Preparation

Problem/Issue Statement

·  Harrah's has been able to use information technology and closed loop marketing tactics to reach their existing customer base and use them for their main source of growth. By gathering as much information as then can about what their customers like, want, and are looking for, they are able to keep them coming back to their properties over and over. Since they have implemented these tactics they have had extreme success with this strategy. However, given the current market conditions, thin profit margins in the gaming industry, and other companies trying to mimic their success, Harrah's has to find a way to maintain their revenues and edge over their competitors. 

Situation Assessment

· This problem isn't exactly a problem yet, however to maintain their success Harrah's can't settle into complacency with what they are doing. They need to look to new or alternative options to continue to grow not only their revenues, but also their customer base. Given the current market conditions and their competitors looking to mimic their strategy Harrah's needs to continue to innovate with new ideas and tactics to keep one step ahead of the competition. Also, their closed loop marketing strategy and Total Rewards Program their is an increased level of customer service which they need to maintain as well, to retain current customers and attract new customers. 

List of Plausible Alternative Courses of Action

· The only course of action at this time for Harrah's is to evaluate their systems and processes to see where improvements and innovations can continue to be made. They have had major success with their databases and analytics, however they need to keep moving forward to continue on this path.  

Evaluation of Alternatives

·  Harrah's can continue to test different offers that are slightly more outside of the box than they are used to. In the case then mentioned how $60 of chips is a more attractive offer than a free room, dinner and $30 of chips, therefore their most successful offers might be something smaller that they didn't think was worth trying. To keep expanding their marketing efforts keeps offers fresh for returning customers so they think they are gaining access to something new.

Harrah's can also look into consolidating their systems so all the data is housed in one mainframe instead of separate database systems. This could allow for quicker updates to data, which allows for faster turn around on requests for information, that gets the offers out quicker, and gets the customers on the property faster. This could allow for more volume at a more efficient pace.

Another focus for Harrah's should be cross market play. If they are able to increase the amount that their loyalty members will travel to other properties for certain offers they are increase the market share for each property causing them to bring in more revenue. Essentially, they need to test what offers will have customers travel certain distances to get there and focus on expanding their market.

Recommendation

Of these alternatives a mix of each and other innovative options is what makes sense to continue the growth and expansion of Harrah's properties.  Looking at their successes in the past, they need to take lessons from these and evolve them into new ideas for the future. Harrah's is one step ahead of the competition and they need to stay there to remain successful in this marketplace.

Pandora Radio

Problem/Issue Statement

· Pandora is an Internet radio website where a user creates a profile than they can create stations based on a group or song that they like. A user has the ability to skip a song or give a song a thumbs up, but not the ability to request a song or play a song on demand. The major issue that Pandora faces is their ability to make revenue. They have a successful model as far as number of users, but they need to find a way to convert that into profit. 

Situation Assessment

· This problem is major in that Pandora won't be able to continue into the near future if they don't address the revenue issue quickly. Until this point they have gotten by with managing costs alone, up to and including not paying employees for a time period, however to keep the business up and running they need to turn a profit. Since users can't play a song on demand they are able to manage licensing fees, but they still don't have a good enough deal to recognize significant savings. As users continue to increase advertising revenue increases as well, however they are still only using about 60% of the advertising space. Initially they tested a subscription model which wasn't successful. After the free trial period no users continued to subscribe. Pandora needs to find a way to connect with users to become profitable. 

List of Plausible Alternative Courses of Action

· The alternative courses of action for Pandora are to continue to add more advertising, enter into the "freemium" option, revisit the subscription model, or they could cap the free hours charging for usage after that point . Each of these options will address the problem in slightly different ways depending on how much they want to change the current Pandora user experience. 

Evaluation of Alternatives

· The first option is continue to add advertisement. Due to the demographics, Pandora users are very attractive to major advertisers and small local companies as the same time. They can reach very targeted and segmented markets to get their message across. However, one of the benefits of listening to Pandora vs a radio station online is the lack of and subtly of advertising. 

· The second option is to create a "freemium" model. This would offer a limited, but free version to all users and an upgraded version for a price. Other internet companies have seen a great success with this model such as Hulu/Hulu Plus. This option allows Pandora to remain intact, but creates levels of users. The issue here is how limited does the limited version become? You don't want to open the door for other competitors to come in and poach your users due to lack of flexibility. 

· The third option is to use a subscription model. Pandora could charge all users a nominal monthly fee for streaming. Charging a minimal $3 a month alone would significantly increase profit for Pandora. The negative here is that you would lose some users who wouldn't be willing to pay a monthly fee. 

· The fourth option and final option is to cap the hours and charge for usage over the set hour limit. For example a user would get 40 hours free and then charged 99 cents per hour after that. This option helps control the issue of the "leaky faucet" where users just leave Pandora on even when they aren't listening and you allow for the super users to pay for the extra music they are consuming. However, similar to the issue they faced at launch as a subscription product people may just stop listening once they reach the cap. 

Recommendation

Of these alternatives the option that makes the most sense is the "freemium" option. As I mentioned earlier other sites have had great success with this option. It guarantees a profit to point while maintaining a large user base which will satisfy advertisers as well. This keeps the Pandora model as close as possible to what has been successful thus far, but opens the door for revenue by appealing to super users and techies who like have the extra access to a site. 

Microsoft Project

Microsoft Project is a project management system offered with the Microsoft suite of products to effectively manage projects over ongoing periods of time. One of the major benefits of this software is the familiarity of the Microsoft suite of products. The user controls and set up is very similar to what most employees are used to using from Microsoft Word or Excel.

A project manager can enter any level of detail on a project or schedule that suits their needs. They can manage deliverables, owners, and tactics all from one platform. By using Project to keep your projects organized you are able to keep everything on track and give summary information to anyone as needed. It is beneficial as projects are expanded/downsized and teammates are added/removed from a team.

Using Project can help streamline an organization which will ultimately help save money over time. Project is set up in a way to manage projects so they are run efficiently and on schedule. Your teams will be able to see what is happening at any given time so you can optimize the performance at each step.

I would recommend using Project to manage tasks and overall projects to streamline the organization and increase productivity.

Junk Van - Relection

A comment was raised in the meeting last week that really stuck with me since then. Someone mentioned that since our goal, of course, is to continue to grow and become more successful therefore anything sort of beginning to establish an IT infrastructure would only be an interim fix and we would find ourselves in the same spot shortly down the road.

I went into the meeting and went most of the meeting believing that Platform as a Service (Paas) would be the correct option for us and it still could be. However, I think we need to examine our long term goals closely before we move forward.

PaaS would suit all of our current needs. It could be accessed remotely and updated by multiple users. Easily customizable to without needing to hire IT personnel and cost effective. As we continue to grow as an organization is there enough flexibility to evolve with what our needs will become in the future.

At our current growth rate in a few years we will need something to accommodate even more users and more consumer data. As we push PaaS to it's limits will it be enough? That is why I suggest looking into the investment in a server based option with an IT professional so it is a seamless process as we grow and evolve as a company we can easily build on to the infrastructure we already will have in place.