When an economic downturn lingers over a market, generating profits becomes extremely difficult for a business. However, there are a few ways to reduce this cyclical business risk. One of the ways happens to be with the use of international business tactics. Perhaps surprisingly, a casino located in Las Vegas, Nevada serves as a great example of this risk reduction strategy.
The Las Vegas Sands reported a significant increase in first quarter profits for 2013. This news caught many people off guard as Las Vegas is an American market struggling yet determined to rebound after the financial crisis of 2008. So how did this Las Vegas increase profits despite a distressed domestic market? The answer is simple—international business. The Las Vegas Sands was able to achieve profit growth by establishing casinos in foreign markets with bright prospects. Its key foreign market is Macau and its thriving casinos in Macau attracted a record 14 million visitors, helping drive profits in 2013.
Macau is the world’s biggest gambling market and the only place in China where gambling is legal. The Las Vegas Sands was one of the first firms to open a foreign casino and currently operates four casinos in Macau alone. This situation serves as an excellent model for international business and exemplifies the many benefits of entering foreign markets. Having overseas investments and operations allows international companies to spread the risk created by domestic economic downturns. International business also allows businesses to achieve new opportunities for growth in markets that are expanding with new customers. Who thought one can learn so much about international business from a neon, encrusted temple of Las Vegas? I certainly did not.