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Accounting & Financial Management
AFM 241
Theophanis Stratopoulos

Chapter 4: Business Analytics 1 Introduction a Changing and fragmented customer preferences, rapid technological changes, falling geographic and industry boundaries and ability of firms to raise capital through global alliances → resulted in state characterized by intense rivalry and difficulty for firms to sustain competitive advantage b Hypercompetition manifests in increased performance variations and higher frequency of firms reporting losses i Success requires firms to seek out new knowledge for predicting what customers will want in the future - How? Investment in customer relationship management systems, supply chain management systems, data warehousing etc. and levering functionality of these technologies to shape their business strategies and enable agile competitive moves c Business Analytics: set of methodologies, processes, architectures and technologies that transform raw data into meaningful and useful information used to enable more effective strategic, tactical and operational insights and decision making d Use business intelligence tools to leverage their “big data” to properly analyze data and fine tune existing strategies or develop new ones 2 Harrah’s Business Strategy a Unable to differentiate itself geographically, instead to differentiate through customer service to attract and encourage patrons to spend more of their gambling budgets at Harrah’s b Learnt how to improve customer reward programs, pricing and business processes → alignment between business strategy and IT and IT innovation are factors in its ongoing success in improving customer loyalty c Collect gaming data and facilities usage data → automated player tracking technology to track usage (i.e. slot machines) d Introduced national rewards card program - all data was consolidated into data warehouse (created first national database and reward card program in casino industry) e 26% of gamblers generated 82% of the revenue - middle aged and senior adults with discretionary time and income who enjoyed playing slot machines, than high rollers f Vast amount of data on customer preference, needed more powerful data warehouse (signed with NCR) g Used accumulated data to direct marketing programs (focus on direct mail offers) h Tool’s proprietary algorithms predict lifetime yields based on demographic (age, sex, address), betting patterns (casino-game preference, house advantage on particular game, average bet, number of bets per house, and length of play) and other cardholder data (frequency of visits, overnight stays, restaurant visits) i Predictive model allows companies to identify most profitable customer and establish prices in real time to get highest yield possible from each customer transaction j 2004 - Acquired Caesars Entertainment k Innovations 1 i Integrated predictive modeling algorithms into website to let customers cash in rewards and book rooms online ii Connecting systems to speed integration of inhouse developed and acquired systems iii Clienteling Personalization Application - Prepare prioritized list of contact names for salespersons and online access to customers’ history, background and contact information and tailored
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