MGM Resorts International Franchise Market Entry Plan
This paper presents a comprehensive implementation plan for MGM Resorts International to enter the franchise market as a strategy for growth despite high debt levels. The plan outlines how MGM can leverage its strong brand reputation by selling franchise agreements to business partners in the leisure and gaming resort sector. It details functional tactics, action items, milestones, resource allocation, organizational change management, and key success factors. The paper also addresses contingency planning for risks such as franchisee access to capital, macroeconomic environmental influences, and general operational risks, drawing on established frameworks in strategic management and franchise economics.
- Introduction: MGM's Franchise Growth Strategy: MGM's debt drives franchise model adoption
- Implementation Plan and Objectives: Phased objectives over eight-year timeline
- Functional Tactics and Action Items: Marketing, staffing, and franchise tools development
- Milestones, Deadlines, and Resource Allocation: Key benchmarks and physical, financial resources
- Organizational Change Management and Key Success Factors: Staff engagement and franchise compliance monitoring
- Contingency Planning: Capital, Environment, and General Risks: Risk mitigation for capital, economics, and operations
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What makes this paper effective
- The paper applies a clear, hierarchical structure that mirrors a real-world business plan, making it easy for readers to follow the progression from strategy to execution.
- It grounds abstract strategic concepts in concrete milestones and deadlines, demonstrating an understanding of operational planning rather than theory alone.
- The contingency planning section shows critical thinking by anticipating specific risks — capital access, macroeconomic shifts, and franchise uptake — and proposing targeted responses for each.
Key academic technique demonstrated
The paper effectively integrates cited theoretical frameworks (Mintzberg et al., Blair & Lafontaine, Hitt et al.) with applied business planning, showing how scholarly concepts such as functional tactics, franchise economics, and geographic diversification translate into organizational action. This theory-to-practice synthesis is a hallmark of strong business strategy writing at the undergraduate level.
Structure breakdown
The paper opens with a rationale for the franchise model given MGM's debt constraints, then moves through a numbered implementation plan covering objectives, functional tactics, action items, milestones, resource allocation, and change management. It concludes with a structured contingency plan divided into three subsections: capital access, environmental influences, and general risks. Each section builds logically on the last, creating a coherent planning document.
Introduction: MGM's Franchise Growth Strategy
MGM Resorts International has a desire to grow, but is held back by a high level of debt that may stifle the capital requirements needed for traditional organic growth strategies. An approach that will mitigate this shortfall and allow the firm to build on its existing strong reputation is the use of a franchise model — selling franchises to business partners who will use the MGM brand name and provide services using the MGM operating model (Mintzberg et al., 2011). This is a new strategy that will require a detailed implementation plan.
Implementation Plan and Objectives
To implement a franchise strategy for selling franchises for leisure and gaming resorts, MGM Resorts International will undertake a clear and defined course of action. The strategy will be implemented over the period of one year, with the recognition that any franchise agreements reached with trading partners may take longer to implement — especially if the partner will be building a new resort to carry the MGM name (Mintzberg et al., 2011).
The objectives of the implementation plan are as follows:
1. The establishment of a specialized franchise division within the company, focusing initially on the sale of franchise agreements and then the monitoring of those agreements to ensure full compliance. The franchise division will be set up within a period of three months, after which the department will be ready to begin marketing franchises to potential business partners.
2. Negotiations to have commenced with at least two potential franchisees by the end of the first year.
3. At least two franchise agreements to be agreed and signed by the end of the second year.
4. At least five major leisure and gaming franchise resorts to be open and operating within a period of eight years.
Functional Tactics and Action Items
In order to realize these objectives, the firm will need to adopt suitable functional tactics. Before anything can be sold — whether an idea, service, or product — the company must identify potential target markets and communicate with those markets regarding the products and services on offer. MGM will need to develop a suitable marketing strategy, identifying organizations that have existing interests in the hospitality market and that may be interested in purchasing a franchise, as well as firms in other business areas, such as other leisure sectors, that may be seeking diversification. The development of a specific marketing strategy will identify the target market and the most effective means of approaching it. This may include a direct sales strategy, along with marketing through prominent franchise exhibitions and business shows, and outreach through the professional press serving the hospitality industry.
The functional approach toward achieving this aim will involve dividing the franchise department into different regional areas, which may include the Americas, Europe, Africa and the Middle East, Asia, and Australasia. These different areas have varying requirements, market patterns, and dominant hospitality firms. Dividing the franchise department into regional teams will facilitate specialization, both for the initial selling of franchises and for the ongoing monitoring and control of franchise operations.
As the organization does not currently have a franchise division, the first action item is its establishment. This will include identifying suitable staff with knowledge of franchise operations, and recruiting for positions that cannot be filled internally. Since MGM does not yet have experience with the franchise model, the use of headhunting services to acquire an experienced franchise manager or director may be beneficial. Acquiring specialist knowledge in this manner may reduce the steepness of the learning curve. In addition to the franchise manager or director, the department will also need employees capable of negotiating and selling franchise agreements.
Prior to the sale of any franchises, the organization must develop a standard franchise contract outlining the commitments and obligations of both parties. This standard agreement may be adjusted through the negotiation process but will serve as a foundational model for all negotiations.
The development of the franchise model will also require the creation of supporting franchise tools. This includes the documentation of company standards and processes to ensure that all elements of the business are operated according to MGM standards. The process of creating these franchise tools and documents will be extensive, as they will cover all areas of operation — from housekeeping and reception through to ethical standards for gaming staff. MGM will also need to develop training courses for potential franchisees and their employees as part of a comprehensive support program, which will be utilized when franchises are initially established. The company may also offer additional training on an ongoing basis for a fee, as part of the negotiation process.
Finally, the company will need to identify key marketing opportunities, including major trade franchise shows, arrange attendance at these events, identify potential channels for direct and media marketing to potential franchise holders, and design a marketing campaign tailored to the target market.
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