1. What kind of services or goods does your firm offer. Describe your business.
Our service will be a casino in Venice, Italy called Sibola, after the city of gold, or El Dorado. We will provide beverages of all sorts including Original Aztec drinks, water will be provided free of charge. Legendary Aztec food will be sold as well, such as Gold Cheese and Gold painted Prata. Typical Casino games will be placed in the heart of the casino. These games are; Slots, Poker, Black Jack and Roulettes. Entertainment will be provided, Hard Rock style, meaning popular live bands and/or upcoming artists that we, the management, feel appropriate. There will be an indoor river flowing about the width of a meter throughout the casino as décor. Also, there will be super tight security throughout the casino because it is indeed, a casino.
For future Investments, we plan to extend our casino into a hotel- Moulin rouge versus Aztec Gold Style which will hopefully include a Waterfall and a Gondola, like in Venice.
2. Which market structure is your firm likely to form under? Why?
It will be an Oligopoly because it will be a rather large firm and there aren’t many casinos in Rome. This will give us an advantage in the market.
3. What Is allocative efficiency? This is in a perfect competition. It is when the resources are allocated so that there is a maximum amount of production and profit, or largest ‘net benefit’.
4. What is productive efficiency? This is when production of a product is at its lowest price.
5. Who are some of your competitors?
Name of these firms: Palazzo Vendranin- Calergi, Ca’Nog Hera, Casino de Venetia. These will be our main competitors in Venice as they are fellow Casinos.
6. Barriers to Entry:
We are going to try to monopolize the Casino market in Venice so that we will get all the gamblers and customers. We are going to do this by introducing a privilege card which offers private rooms and such. Also we will have things on offer, or good deals that can be only found in our casino. We will try to induce Brand Loyalty, or ‘Casino’ Loyalty.
We will use economies of scale, which will be explained in the next section.
7. Economies of Scale:
With technical economies of scale, we are going to properly divide the labor (Division of Labor) within our number of workers. Also, we will calculate the maximum number of labor that we should have so as to achieve maximum profit.
With marketing economies of scale, we will buy drinks and food in bulk as well as signing contracts with our live bands for entertainment. Once enough money is earned, we will make a television advertisement so that we can increase the tourism in Venice and bring more customers to our casino.
We can seem to be more credit-worthy as we grow larger, and banks will be more willing to lend us funds rather than the younger infant casinos, thus we could use financial economies.
With administrative/managerial economies, we can employ more of the specialists to our side so that other companies may not be able to get them. This increases our efficiency and thus can increase productivity.
8. Non-Pricing Competition:
To decrease competition we will create a brand name for ourselves. With our new television advertisement we will be able to spread the name of our casino all over the country and maybe even the world. However, sadly gambling is banned from Italy except for a few other places other than Venice.
9. Price discrimination:
No, we may not be as there isn’t such a need. Price discrimination exists when a producer sells the exact same product to different consumers at different prices. In a casino, there is a likelihood of people heavily gambling, and making prices higher would only reduce their willingness to spend at our casino. We also decided that we would not compete with the other casinos with our low prices, therefore we would not want to use different prices unnecessarily.
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