A Research On Competitiveness Of The Macao Gaming Industry

Gaming is a service industry of strong interoperability.Theoretical researches usually carelessly ignore such.Thus,this theoretical study addresses the deficiency.It uses economics and management theory to analysis the competitiveness of the gaming industry,with empirical illustration from the Macau gaming industry.After reviewing the analytical framework on the competitiveness with experiences from the Harvard University,this paper develops a model on competitiveness of Macao's gaming industry - The Seven Factors Model,including in institutional,production,business,demand,industrial clusters,opportunity and human. Literature reviews are on the location theory,institutional theory and the industrial clusters theory,with references to the development of the world's gaming industry and the competitiveness of the Macau gaming industry.With the developed model and a comprehensive evaluation method,the paper constructs two sets rating systems on competitiveness.From a historical perspective, the competitiveness of Macao's gaming industry has been in an upward trend after the gaming industrial liberalization.Nevertheless,the volatility and the unexpected factors create problems.Compared to Las Vegas,the overall competitiveness on Macao deteriorates.And it scores less than Las Vegas in the other rating system by business.The study also finds unreasonable internal structure and lopsidedness in the Macao gaming industry.Then,this paper studies the key factors influencing competitiveness of Macao's gaming industry.Using the gravity model on location factors,it confirms that Macao has an excellent location factor.However,it is essential to convert this comparative advantage to the competitive advantage.By introducing a special mode of operation, the paper uses the competitive gaming enterprise's financial model to compare it with the Las Vegas Strip.Findings are that the Macau gaming business is financially competitive,but the advantages have been declined since 2007.At the same time,its major risk still sits on the over-reliance on table gaming revenues and the limited source of customers.Furthermore,it analyzes the diversification with a case in "Venetian Macao." This in-depth study is about the special factors for competitiveness, such as the institution of intermediaries and corporate social responsibility.An analysis of cluster competitiveness follows.It includes the cluster phenomenon, effects,its promotion and the constraints;and then it explores the issues of the industrial chain in detail.Finally,the paper studies another key factor on the competitiveness - the institution factor.Using the simple regression model,the paper analyzes the market achievement of the Free Individual Travels(FIT) Policy.The inference is that it is important to encourage institutional change with arrangement for enhancing competitiveness.To conclude,the paper suggests that the Macao SAR government should formulate strategies and take positive measures to enhance the competitiveness of the gaming industry.Therefore,the Macao government should arrange the institution legitimately,position it reasonably,perfect the law and strengthen the monitoring.At the same time,the industry should act in response to its unique contingency.It should enhance effective control with development,strengthen marketing and management, assume more social responsibility,develop industrial clusters and improve the image of the gaming industry.