PESTEL Analysis of MGM Resorts International (MGM).

Introduction

MGM Resorts International (MGM) is one of the largest hotel and casino companies in the world. With a portfolio of 29 properties in the United States and China, MGM is a major player in the tourism and hospitality industries. Like any large corporation, MGM operates in an environment that is shaped by political, economic, social, technological, legal, and environmental factors. A PESTLE analysis can provide insights into the external factors that affect MGM and how these factors may impact the company's future. In this blog post, we will explore the six components of the PESTLE analysis and discuss their implications for MGM. By understanding the external forces that shape the world in which MGM operates, we can gain a better understanding of the challenges and opportunities that lay ahead for this global hotel and casino giant.

Political Factors

One of the major political factors influencing MGM Resorts International (MGM) is the government regulation of the casino industry. The company is subject to numerous federal and state regulations that address issues such as gaming licenses, taxes, labor laws, environmental policies, and anti-corruption measures. MGM also has to comply with the Foreign Corrupt Practices Act (FCPA), which prohibits companies from bribing foreign officials to obtain or retain business.

MGM operates in several countries around the world, each with its own set of political and regulatory challenges. For example, the company has a joint venture in China with a subsidiary of the state-owned China National Nuclear Corporation. The venture is subject to the regulatory oversight of the Chinese government, which has been known to change its policies unpredictably, affecting foreign companies operating in the country. In the US, MGM has to navigate the often contentious relationships between state governments, tribal nations, and the federal government, which all have a role in regulating the gaming industry.

MGM has also been impacted by political events such as the COVID-19 pandemic, which led to the closure of all of its properties in the US and elsewhere, and the protests against police brutality and racial inequality in the US, which caused some of its casinos to shut down temporarily due to safety concerns. As a result, MGM has had to adapt its operations to comply with new health and safety protocols and address the concerns of its employees and customers.

• MGM is subject to federal and state regulations related to gaming licenses, taxes, labor laws, environmental policies, and anti-corruption measures.
• MGM operates in several countries with their own political and regulatory challenges, such as China and the US.
• MGM has been impacted by political events such as the COVID-19 pandemic and protests against police brutality and racial inequality.

Economic factors

As one of the biggest hotel and gaming companies in the world, MGM is heavily impacted by economic factors that affect the tourism and hospitality industry. The following economic factors are important to consider in a PESTLE analysis of MGM Resorts International:

• Exchange rates: MGM Resorts International operates in many countries around the world, which makes it vulnerable to fluctuating exchange rates. Changes in exchange rates can impact the company's revenue and profits, as well as affect the purchasing power of customers.
• Inflation: As inflation rises, the cost of goods and services increases, which can affect MGM's profitability. Rising inflation can also cause a decline in consumer spending and lead to a decrease in revenue.
• Unemployment rates: Changes in unemployment rates can have a significant impact on the travel and tourism industry. When unemployment rates are high, fewer people are likely to travel and spend money on non-essential activities, like a trip to a casino or resort.
• Gross Domestic Product (GDP): MGM's revenue is impacted by the health of the economy. When GDP is growing, consumers are more likely to have disposable income to spend on travel and leisure, which can benefit MGM's business. Conversely, during an economic recession, consumers may have less money to spend on non-essential purchases.

Overall, MGM Resorts International is directly impacted by the economic climate of the countries in which it operates. To remain successful, the company needs to be able to adapt and respond to changes in the economy and consumer behavior.

Social factors

Social factors can often have a significant impact on an organization's operations and performance. MGM Resorts International recognizes the importance of understanding and addressing social factors, which include cultural, demographic, and behavioral trends.

• Cultural trends: MGM Resorts International operates in various markets, cultures, and traditions worldwide. Thus, the company ensures that its services cater to the cultural needs and values of those markets. MGM has maintained a respectful approach to cultural sensitivity, including the initiation of cultural-based events for guests in its resorts.
• Demographic trends: MGM Resorts International continues to focus its efforts to attract a broader range of customer demographics. One area of focus includes the millennial audience. The company identifies the need to promote its brands to younger generations through mobile applications and social media platforms.
• Behavioral trends: Public perception of gambling practices has been fluctuating over the years. For this reason, MGM Resorts International emphasizes responsible gambling alongside its customer service approach. The company provides resources to its patrons who may be experiencing gambling-related problems.

Technological factors

Technology has impacted the gaming industry in various ways, and MGM Resorts International has not been left behind in this sector. The company has invested in technology as a way of enhancing its services and staying competitive in the market.

• Online gaming: MGM has an online gaming platform where customers can access games as long as they have an internet connection. This platform has helped the company to reach a wider market and increase its revenue streams.
• Mobile Apps: MGM has mobile apps that allow customers to book reservations, order food, and access other services from their mobile devices. This has made it easier for customers to access services from wherever they are, either in their hotel room or while on the go.
• Data Analytics: The company has invested in data analytics technology to improve its marketing strategies and customer experience. MGM can track customer preferences and behavior, which allows them to tailor their services to their customers' wants and needs.
• Facial Recognition: MGM has implemented facial recognition technology in their high-security areas, ensuring safety and security for their guests and employees.

Overall, MGM Resorts International has utilized technology to improve its customer experience and stay ahead of its competitors. The company's investments in technology have allowed it to reach a wider audience and increase its revenue streams while also providing a safe and secure environment for guests and employees.

Legal factors

One of the crucial factors that impact MGM Resorts International's business operations is legal issues. The company operates in a highly regulated industry and is subject to various federal and state laws.

• The gambling industry is heavily regulated, and MGM must comply with state laws and regulations that are often complex and frequently change.
• The company also faces numerous lawsuits related to gambling addiction, employee discrimination, and other legal issues that impact its brand image and financial performance.
• Another legal factor to consider is labor laws. MGM Resorts International operates numerous hotels and casinos, requiring the company to adhere to federal and state labor laws. This includes wage and hour laws, overtime regulations, and workplace safety standards.
• Finally, the company must stay up to date with changing laws related to data privacy and cybersecurity. With the rise of cybercrime and data breaches, MGM must take necessary steps to protect its customers' personal information.

Environmental factors

The environmental factors in PESTLE analysis refer to the impact of the company's operations on the environment. MGM Resorts International has shown a strong commitment to environmental safety, and has implemented several policies and initiatives to minimize their environmental impact.

• MGM has a comprehensive recycling program in place, which diverts waste from landfills and reduces their carbon footprint.
• The company has also implemented energy efficient measures, such as using LED lighting and automated controls to reduce energy consumption.
• MGM has set a goal of reducing carbon emissions by 45% by 2025, and has already reduced emissions by 37% since 2007.
• The company has also implemented water conservation measures, such as using low-flow faucets and toilets, as well as drought-resistant landscaping in their properties.
• MGM has also implemented a sustainable sourcing program, which ensures that their products are ethically and sustainably sourced.

MGM's commitment to environmental safety aligns with the growing global concern for the environment, and it is likely to be a significant factor in shaping the company's future strategic decisions.

Conclusion

Overall, MGM Resorts International (MGM) is a well-established hospitality company with a strong brand identity and a proven track record of success. However, like any other business, MGM is not immune to external factors that can impact its operations and bottom line. Through the PESTLE Analysis, we have identified various economic, sociocultural, political, technological, legal, and environmental factors that can influence MGM's growth and profitability.

Despite the challenges posed by these factors, MGM has taken proactive steps to mitigate risks and capitalize on opportunities. For instance, the company has invested heavily in technology to enhance customer experience and streamline operations. MGM has also adopted sustainable practices to reduce its carbon footprint and ensure long-term viability.

In conclusion, the PESTLE Analysis is a useful tool for assessing the external factors that can impact a company's performance. By conducting regular PESTLE Analysis, businesses like MGM can stay ahead of the curve and respond effectively to changes in their environment. With its strategic positioning, innovative mindset, and strong customer base, MGM is poised for continued success in the hospitality industry.

• References:
• https://www.mgmresorts.com/en/about-us.html
• https://pestleanalysis.com/swot-analysis-of-mgm-resorts-international/
• https://www.sustainablebrands.com/news_and_views/marketing_comms/melissa_hoffmann/5_tips_help_your_hotel_succeed_age_sustainable_prosp