Case
Supplementary Resources
Abstract
In May 2012, Rob Collins, MD of Tsogo Sun Gaming, one of the major players in the South African casino industry, reflected on the success of its star performer, Montecasino. Its success could – at least in part – be attributed to the fact that Montecasino had managed to establish a service-oriented culture that supported the strategy of the casino complex. Collins thought back on all that they had done to build the culture, and wondered what the most important things were that they had done to bring about success.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1a Tsogo Sun Investment Holdings Ltd
Montecasino was owned by Tsogo Sun Gaming, which in turn was owned by Tsogo Sun Investment Holdings Ltd, a holding company for the Tsogo Sun Group. In the year ended 31 March 2011, the group generated a total income of R6.5 billion.
The Tsogo Sun Group operated through two wholly owned divisions: Tsogo Sun Gaming and Southern Sun Hotels. By 2011, Tsogo Sun Gaming owned 14 casinos country-wide and Tsogo Sun's Southern Sun division owned, leased and managed 94 hotels.
Sources: J Baumann, ‘Gold Reef and Tsogo Sun to Merge at Last’, Business Day, 19 February 2011, available www.businessday.co.za/articles/Content.aspx?id=94236 (accessed 7 September 2011); Tsogo Sun Holdings Ltd., ‘Annual Report 2011’, available www.tsogosunholdings.com/downloads/annual_reports/AnnualReport2010.pdf (accessed 21 September 2011); and Tsogo Sun Gaming, official home page, available www.tsogosun.co.za/Pages/default.aspx (accessed 30 August 2011).
Exhibit 1b Tsogo Sun Gaming Casinos
- Montecasino, Johannesburg;
- Gold Reef City Casino, also in Johannesburg, as well as The Apartheid Museum on the same premises;
- Silverstar Casino in Krugersdorp;
- SUNCOAST in Durban;
- Golden Horse Casino in Pietermaritzburg;
- Blackrock Casino in Newcastle;
- The Ridge in Witbank;
- Emnotweni in Nelspruit;
- Goldfields Casino in Welkom;
- Hemingways in East London;
- Queens Casino in Queenstown;
- The Caledon in Caledon;
- Garden Route Casino in Mossel Bay; and
- Mykonos Casino in Langebaan.
Source: Tsogo Sun Gaming Home Page, available www.tsogosun.co.za (accessed 21 September 2011).
Exhibit 1c The Tsogo Sun Group: Condensed Consolidated Income Statement for the Year Ended March 2012
INCOME STATEMENT | |||
For the year ended 31 March 2012 | |||
Change % | 2012 Rm | 2011 Rm | |
Net gaming win | 61 | 6 111 | 3 804 |
Rooms revenue Food and beverage revenue | 1 615 752 | 1 591 677 | |
Other revenue | 553 | 415 | |
Income | 39 | 9 031 | 6 487 |
Gaming levies and VAT | (1 248) | (773) | |
Property and equipment rentals | (239) | (211) | |
Amortisation and depreciation | (623) | (447) | |
Employee costs | (2 116) | (1 467) | |
Other operating expenses | (1 787) | (2 137) | |
Operating profit | 108 | 3 018 | (1 452) |
Interest income | 49 | 24 | |
Finance costs | (469) | (415) | |
Share of profit of associates and joint ventures | 10 | 79 | |
Profit before income tax | 129 | 2 608 | 1 140 |
Income tax expense | (761) | (431) | |
Profit for the year | 161 | 1 847 | 709 |
Profit attribu Table to: | |||
Equity holders of the company | 1 717 | 583 | |
Non-controlling interests | 130 | 126 | |
Total | 1 847 | 709 | |
Number of shares in issue (millions) | 1 097 | 1 097 | |
Weighted number of shares in issue (millions) | 1 097 | 906 | |
Basic and diluted earnings per share (cents) | 143 | 156.5 | 64.3 |
Note: Montecasino contributed R2 107 million in 2012 to the total income (R1 964 million in 2011).
Source: ‘Tsogo Sun Group Reviewed Consolidated Financial Results for the Year Ended 31 March 2012', Business Day, 18 May 2012.
Exhibit 2 Images of Montecasino
Fake roof in Montecasino
Skyline of the Montecasino precinct
West entrance to Montecasino
Street entertainer at Montecasino
Source: Images courtesy of Deidre Jameson, services manager, Montecasino, September 2011.
Exhibit 3 Montecasino Organisational Structure
Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.
Exhibit 4 Montecasino's 10-year Vision: Cover of Time Magazine 2021
Source: Courtesy of Steve Howell, general manager, Montecasino, September 2011.
Exhibit 5 Creating the Guest Experience
Intangible elements to stimulate the senses were implemented at every initiative or event presented in the precinct. In the early days, the Tuscan village theme was emphasised by using Italian music and songs but, along with Montecasino's belief in changing constantly, the music and live street entertainment now focused on supporting a theme or upcoming event.
In the planning phase of any such event, the marketing department planned how to appeal to the five senses of sound, sight, touch, smell and taste. The combined stimulation of the five senses would then satisfy the sixth sense, which Montecasino described as the overall emotion or feeling a guest would experience in Montecasino. Montecasino's complex services then helped to implement the plan to the smallest detail, to create and sustain the right environment in which the customers could have this multisensory experience.
On entering Montecasino, the guest would therefore encounter a powerful yet subtle sensory experience. The theme-based lighting and décor, in accordance with the current theme, stimulated the sense of sight. The visual experience was further enhanced by the attention to detail: the ever-gleaming cobblestone floors, the realistic-looking plants and the washing on the lines above the streets. This washing was changed to support the themes for the events; for example, during the ‘Taste of Johannesburg’ food and drink event, chefs' jackets were hung on the lines. Over weekends, there were the added visual delights of jugglers, mimes and stilt walkers.
By pumping various aromas through the air conditioning ducts, the guest became even more involved in the theme. When Montecasino presented the SA Open Tennis championships, for example, the smell of freshly cut grass and berries were pumped through various sections of the precinct. Likewise, the smell of freshly baked muffins or coffee filled the air in various areas during the food and drink event, Taste of Joburg.
To emphasise the sense of touch, samples of sunscreen lotion would be handed out during the tennis championships, or roses on Valentine's Day. And, naturally, indulging in the wide choice of food and drinks in the restaurants satisfied the sense of taste, while musicians in secluded corners and background music, appropriate to the theme of the day, appealed to the sense of hearing.
Being entertained in Montecasino terms meant that guests should never experience a dull moment. All theatre productions, for example, were therefore uplifting in nature. Depressing shows, regardless of good reviews they might have received, would simply not be presented.
The shops in Montecasino also embraced the ‘Mood and Mind’ concept. A good case in point was the bookshop, Skoobs (books written backwards) – a concept store that claimed to be the first of its kind in South Africa. Visitors to the bookshop indulged in another sensory experience the minute they stepped into the shop and saw a fish tank with its specially designed water books nestling in the sand at the bottom of the tank. Apart from its vast range of books to touch, it had a coffee shop emitting aromas to stimulate the senses of smell and taste, as well as a champagne bar with a baby grand piano intermittently used to entertain the visitors, stimulating the sense of hearing. Children were entertained in an interactive gaming area, the smaller children by an animal-themed interactive book section. The sensory journey took one right through to a Zen garden on the top floor in the Body, Mind and Soul book section that featured a comfortable hanging chair for guests to nestle in.
Sources: Interview with Cecile Putter, 8 December 2011; and Montecasino, ‘Skoobs: Theatre of Books’, no date, available www.montecasino.co.za/storedirectory/Pages/Skoobs.aspx (accessed 3 January 2012).
Exhibit 6 Tsogo Sun Gaming Group's Top Line and Bottom Line Principles and Descriptions
TOP LINE PRINCIPLES | |
A Great Place to Work |
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Attract and Develop Gifted People |
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'Can-do' |
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Clean and Safe Environment |
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Continually Raise the Bar |
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Deal with the Issues |
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Entrepreneurial Spirit |
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Great Communication |
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Inspiring Leadership |
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Market and Business Intelligence |
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Personalised Service |
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Teamwork |
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The Spirit of Tsogo |
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Uplifting the Community |
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World Class Gamertainment |
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BOTTOM LINE PRINCIPLES | |
Absenteeism |
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Abusing our Assets |
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All Talk No Action |
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Arrogant and Complacent |
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Autocratic |
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Bad Planning |
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Bureaucracy and Red Tape |
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Damaging our Reputation |
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Dishonesty |
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Favouritism |
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Lack of Accountability |
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Negativity |
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Non-compliance |
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Politics |
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Slipping up on the Basics |
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Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.
Exhibit 7a Examples of Tsogo Sun Gaming's Top Line Icons
Source: Courtesy of Louise Sevel, general manager: brands, Tsogo Sun Group, 1 May 2012.
Exhibit 7b Examples of Tsogo Sun Gaming's Bottom Line Icons
Source: Courtesy of Louise Sevel, general manager: brands, Tsogo Sun Group, 1 May 2012.
Exhibit 8a Examples of the Montecasino Top Line Principles (Icons) – ‘Have to Have’ Principles
Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.
Exhibit 8b Examples of the Montecasino Bottom Line Principles (Icons) – ‘Can’t Afford to Have' Principles
Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.
Exhibit 9 The Montecasino Formula for Success
Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved