Competitive Cost Analysis Cost Modeling Techniques Case Study Solution & Analysis
Introduction
Competitive Cost Analysis Cost Modeling Techniques Case Study Solution (National Association for Stock Car Automobile Racing) is an organization performing series of Stock Automobile racing in United States and functioning as a sanctioning body for driving the rules for Stock Vehicle Racing. The company was established in 1947, by "Big Bill" France. NASCAR set up Stock Automobile Racing occasions in United States with the existence of about 130000 audiences typically in 2005. It likewise broadcast its occasions in about 150 countries. Stock Car Racing by NASCAR is the 2nd largest spectator sport, with greatest number of sponsors. It has about 500 sponsors contributing billions of dollars in its income. The other sources of profits for Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis consists of; 10% of the total income from tv rights, approving fees i.e. $1-2 million per race, and licencing NASCAR brand to companies.
NASCAR has a closed corporate culture with the non-interventionist technique. However this non collective technique brings stress in the sport. The building of Cars and truck of Tomorrow by Competitive Cost Analysis Cost Modeling Techniques Case Study Help, with an intention of security for the chauffeurs, brought numerous tensions among the stakeholders of the sport.
The communication audit, conducted in 2010, revealed that regardless of the truth that business extremely depend on the interactions in between its stakeholders, there was no recognizable service interaction method. The market's target customers, direction and goals were all unidentified.
The audit pointed out various lacking of NASCAR in terms of lack of internal integration, absence of fan management technique and absence of digital and social media of marketing.
Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis audiences was highly loyal to the sport and the brands connected with the NASCAR, making it appealing for sponsors and corporate marketers.
Problem Declaration.
The business is presently facing the problem of declining rates of presence at racing tracks and rates of tv audiences. This can put a considerable effect on its incomes from sponsors, media rights, and from other sources of income.
Situational Analysis.
The business was quite successful till 2005 with its conventional marketing techniques, but soon after 2005 the company starts facing different problems including decline of its fan base. Numerous external as well as internal factors are responsible for the decrease. Internal elements consist of; inadequate investment in social networks and other digital medias of.
Fan base of NASCAR comprised of married males with a typical age of 47, which passes their fandom to their children and produce generational commitment. Other obstacles for NASCAR consists of the shift of its fans to other sports as they were enhancing their fan's experience allowing access to their broadcasts out of the houses through jumbo turns, Wi-Fi access, and so on.
SWOT Analysis.
Strengths.
In SWOT analysis, strengths defined as business's qualities which are various from its competitors. These are business's core proficiencies on which company performance or company success based upon. Competitive Cost Analysis Cost Modeling Techniques Case Study Solution core proficiencies includes it has rights of dictating guidelines as sanctioning body. Guidelines and guidelines concerning professional stock car racing are dictated by NASCAR like if any team with required abilities and resources can enter into races by following rules and policies determined by NASCAR. NASCAR has monopoly it this element. Its strengths also includes that it has title of second largest spectator sport in the United States with having more fortune 500 sponsors based in United States. Its races were used to transmit in more than 150 countries around the world with more than $56 million profits. The main sources of their earnings originate from television rights, sanctioning charges, sponsorship and licensing. It has longest season of 10 months and having ownership of 3 national series i.e. Camping World Truck Series, the Sprint Cup Series and the Nationwide Series. It has also big resource of fans and corporate sponsors. Since of greatest brand name loyalty of fans towards brands advertised by NASCAR, all the occasions of NASCAR are sponsored by corporates. (See Appendix A).
Weak points.
Weaknesses in SWOT Analysis are thought about as external factors. Weaknesses includes the aspects that stops business to perform at required level of efficiency. Weak points of NASCAR includes its close culture which is non collective. They have non-interventionist method. They generally utilized to form guidelines and other needed processes without intervention of others which leads to bad collaboration. For instance NASCAR establishes Vehicle of Tomorrow without collaboration so result is that motorists did not like that principle. As this is racing sport so covering of sports by media is likewise challenging. It was likewise found that NASCAR had no efficient technique for organisation interaction. They don't understand how to manage problem if it took place off track. Ineffective company communication results in that they do not have clear instructions for their long term objectives. They do not know that where they wish to see this sport in future.
Opportunities.
Opportunities in SWOT analysis are external elements which can be beneficial to business or the external aspects on which company is having competitive advantage. NASCAR typically used to rely on conventional media sources like local newspaper for publicity of its sports. Generally these traditional media sources try to cover their house team and specific sort of events. NASCAR likewise familiarized from these standard media outlets that sport was difficult to cover. Media landscape likewise altered from conventional to digital landscape. Newspapers went out of business. NASCAR can work on its capabilities to get optimal possible gain from this brand-new digital landscape. NASCAR have underinvestment in digital resources. It can capitalize in social and digital media to get its benefits. Digital rights of NASCAR were likewise sold to Turner Sports. NASCAR utilized to make money check of around $15 million every year from Turner Sports. There are number of cons behind this deal. For instance Competitive Cost Analysis Cost Modeling Techniques Case Study Solution had to get approval from Turner Sport if it want to create its Facebook page, twitter account or even mobile application. Turner Sport also had rights of every single video which is shoot during race at track. If media sources like papers, publications and cable channels want to post videos of races on their particular pages then they are required to pay licensing costs to Turner Sport. So NASCAR can deal with conditions and terms and attempt to work out with Turner Sports to get optimal advantages of it. Star power plays really essential function in creating incomes from every sport. However it was noted that Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis is lagging in this location i.e. star power. For example when sports fans were asked regarding popular celebrities and stars then NASCAR driver was not found even in leading twenty actions. So NASCAR can put efforts in this area too for earnings generation. They need to guide their chauffeurs that how they can end up being sport stars. 4 strategic focuses which are produced by research group can likewise be worked as chance for NESCAR. These 4 tactical focuses compares and analysis Competitive Cost Analysis Cost Modeling Techniques Case Study Help methods.
Risks
Risks in SWOT analysis are specified as external aspects that can danger to company's success. Economic down turn was experienced in late 2000 which can be hazard for NASCAR since if there is economic down turn then individuals would be having less return on investment. Earning of people would be effected and they would be more mindful in investing their loan. Economic down turn likewise results in increase fuel prices which also impacted NASCAR. Because fans of NASCAR utilized to attend its event from cross countries. NESCAR had a rule of 65/25/10 for income distribution. 65 percent revenues from media rights would be dispersed to race course, 25 percent income would be distributed to completing group and staying 10 percent would be kept by NESCAR which is sanctioning body. Contending group wished to increase their part of profits from 25 percent because of increase in running expense of a race group and also there is decline in the variety of full-season sponsorship. Due to the fact that they are making enormous financial investments to enhance experience of fans, nescar likewise deals with threats from other sponsors. Which consists of upgrading existing opportunities, developing new opportunities, supplying Wi-Fi facility and also supplying other interactive mediums to engage sports on smartphones. Fan base of NASCAR comprised of married males with an average age of 47, which passes their fandom to their children and create generational commitment. So the challenge is that the household system in America was altering leading to decrease of influence of married male fan base over their youngsters. Together with it understandings about car was likewise altering with viewing cars and truck a car to reach at point B from point A, rather than as a fun task. Now if Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis make substantial financial investments in new segments which are based upon new consumers then it may deal with unfavorable comments from its core fan base.
Porter's 5 Forces Analysis
Porter's 5 forces is a model that is used to evaluate industry in which company is working. It assists in identifying what are strengths and weakness of any specific market. It suggest that every market is different from one another. Because NASCAR's bottom line i.e. net profit is greatly depends on this, it is important to understand industry in which business is working. There are 5 forces that are used to recognize success, strength and attractiveness of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution service.
Competitive Competition
This force suggests ability of competitors. Teams generally represents sponsors in NASCAR and the medium of marketing is chauffeurs. Therefore it can be said that chauffeurs and race vehicles are competitors. These drivers can break NASCAR if they got better chance in terms of rewards and television direct exposure. Then viewers can move to those other intriguing cars and motorists, if audiences take pleasure in other race automobiles and motorists more than NASCAR. NASCAR might be having risk from its 2 direct rivals that is Solution 1 and Moto GP. They require to produce competitive benefits for drivers so they do not move to other rivals.
Provider Power
If company shifts from one supplier to another, the provider power shows the number of providers are available in industry and what is the cost associated with supplier. In this market there is supply monopoly since chauffeurs with required abilities and resources are restricted.
Buyer Power
This force is concerning to clients that is it easy for customers to shift to other products. If there is more switching cost is associated then clients are less most likely to change. When it comes to NASCAR consumers are its viewers. Viewers can change to other competitors quickly due to the fact that audiences will having low switching cost.
Hazard of Alternative
Alternatives are referred as options. The alternatives in this case can be other entertainment indicates like audiences can shift to other sports. So there are vast array of alternatives are offered in this circumstance which recommends that danger of replacement is high.
Risk of New Entry
It is specified as how it is easy for any company to enter in that particular market. In the case of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution danger of new entry is low. Because if any business needs to enter in this organisation than they need to make heavy financial investments. They need to develop automobiles and racing tracks and likewise needs to pay large total up to chauffeurs for changing.
PESTEL Analysis
Political
It can not be concluded from case study that there would be modification in resource allotments. NASCAR had got gain from lower taxation policies which leads to increasing in earnings. They made heavy investments in the research study and development. As NASCAR is operating in numerous markets so it needs to deal with different regulations. It is likewise noted that Competitive Cost Analysis Cost Modeling Techniques Case Study Solution has actually faced increased analysis regarding regulatory. Every federal government has different top priority so NASCAR has to be prepared for it as top priority can be shifted to other sector.
Economical
Financial factors includes tax rate, currency exchange rate, financial efficiency of that particular company, conditions of labour market, inflation rate and so on. If there is federal government intervention in the marketing and sales sector, fortunes of the NASCAR and its competitors can be affected. NASCAR can leverage abilities of employees to develop brand-new opportunities and enhance existing chances.
Social
Every society is different from each other. Each has various social values and norms. It assists in comprehending regarding society and choice of consumers. Social aspects includes customs, culture, attitudes towards specific services and products, demographics, standards, interests and so on. It can be concluded that advertising through other means rather than standard (i.e. paper) can be chosen in this society.
Technical
In this case of NASCAR it can be kept in mind that companies are greatly investing for research and advancement. NASCAR must also work on its media rights policy with Turner Broadcasting System.
Legal
Due to the fact that every nation has different legal terms and conditions, Legal plays a crucial role in every nation. Competitive Cost Analysis Cost Modeling Techniques Case Study Solution requires to be ensure that they secure their legal rights in every county so any business does not damage to its legal rights.
Environmental
Environmental elements are also crucial for every service. NASCAR requires to make sure that its vehicles are not generating pollution more than appropriate level.
7 P's of Marketing
Product
The products of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution in its item portfolio are; racing occasions tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand, approving guidelines for races and ad-space to business online marketers during broadcast of NASCAR races. (Hanlon, 2018).
Price.
Rates technique of NASCAR for its race occasions tickets is based upon the place and significance of the racing events. In addition to race occasions tickets, NASCAR also charge numerous service fees to its stakeholders and makes revenue. For instance it charged approving costs of $1-2 million per race usually in 2005.
Promotion.
Advertising method of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis is highly based upon its fan base. A strong fan base share its fandom with others and increase the number of audiences for NASCAR races. The business is not entirely relied upon its fan base for its promotion and promote through regional radio stations too. The business has likewise adopted the retailing media of promo, in which the business sells products with its logo design.
Location.
NASCAR have its racing tracks in various cities in United States. The most essential tracks of NASCAR includes Atlanta Motor Speedway in Georgia, Automobile Club Speedway in California and Darlington Raceway in South Carolina. It attempts to perform its races in the majority of the cities in United States to grasp nationwide appeal.
Individuals.
Nestle people technique is consisted of providing better experience to its audiences, its fan base and to all of its stakeholders. People are an essential aspect of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution A marketing method as its occasions are the source of home entertainment for crowd. Its individuals method includes efforts to supply much better experience to its Fans, Race Drivers, Team, Occasion Organizers and so on, all of which come under individuals method of NASCAR.
Procedures.
A number of company processes are required to perform racing events in an effective method. These processes consist of; appropriate schedule of time, plan for spectators, offering tickets, plan of area for sponsors, handling logistics etc. These all procedures contribute I developing NASCAR image, improving viewers experience and increasing fan base.
Physical Proof.
Essential physical proofs for the NASCAR consists of the existence of its racing tracks, stock automobiles and racing occasions. Along with it, its retailing brands consisting of t-shirts, caps, goodies and so on, likewise act as a physical evidence for NASCAR.
Item Life Process Evaluation.
The racing occasions by NASCAR was presented on June 19, 1949. At the very first phase competitors for NASCAR was low, as the rivals drove the automobiles comparable to the vehicles driven by normal people.
Growth.
The very first NASCAR based track, particularly the Darlington Raceway track, was initiated in 1950 in South Carolina. After the development of racing tracks the business moved towards broadcasting its races on tv in 1979.
In 1972, William France Jr., ended up being the president of NASCAR and n about 3 decades, he transformed NASCAR from a regional Sport popular company into one with worldwide fan base. He started a brand-new era of lucrative sponsorships and tv contracts for NASCAR.
Maturity.
The maturity duration for NASCAR started with the efforts of William France Jr., with the business having wide variety of profits sources. The company has about 500 sponsors with broadcasting its occasions in about 150 nations. The business has large number of tracks in the majority of the cities of United States.
Decrease.
The significant causes of decline consist of the financial crisis of 2008, which increased the cost of showing up at tracks for audiences due to increasing fuel prices, and the moving of its fan base towards other sports.
Market Division.
The marketplace segmentation of Competitive Cost Analysis Cost Modeling Techniques Case Study Help can be divided into 4 sections; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).
Geographic.
The geographical division of Competitive Cost Analysis Cost Modeling Techniques Case Solution is based upon the geographical presence of its tracks in numerous states and cities in United States, and the tv broadcasting of its events in different nations. The business has 23 tracks in about 20 states of America and has tv broadcast through different Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This large geographical segmentation supplies the company regional as well as global fan base.
Group.
The group division of NASCAR is also highlydiverse based upon the gender, income and age of the customer. Its existing fan base is majorly consisted of male married fans with an average age of 47 years and an income around $30-50 thousands. However currently NASCAR is attempting to increase its target market to the young growing population and kinds also. To increase the demographic section of its market NASCAR ought to revise its marketing strategies to draw in more age and lower its costs to enter in the market sector with a low typical earnings.( htt1).
Psychographic.
NASCAR has a fan base with a loyalty. NASCAR fans perceive it compulsive to purchase tickets and see the races once in a week. NASCAR has tried to increase the quality of its racing by introducing phase racing, they likewise have tried to lower rates and make the occasion more hassle-free by introducing live racing.
Behavioural.
Behavioural division of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis is based upon the behaviour of fans in regards to watching the race survive on the television or by entering the events. Presently, the fans choice is towards enjoying the race in the house on television rather than going, as the customer experience at NASCAR tracks is not beneficial as well as expensive. This choice makes the rates for participation lower than the rates for tv viewers. NASCAR needs to change the behaviour of its fan base by presenting qualitative services at its tracks.
Target Market.
Hispanics.
One of the potential target market of NASCAR was Hispanics; the young and growing population of United States. The market sector has fantastic prospective for NASCAR as the population was growing at a higher rate and it was anticipated to end up being thrice after forty years and the sector has increasing wealth rate with about $1 trillion of wealth in 2014.
Kids.
Kids are also one of the prospective target market sector for NASCAR, as they are more connected socially than other groups. Cars and truck racing games developed by Competitive Cost Analysis Cost Modeling Techniques Case Study Solution can be a possible source of acquiring attention of kids towards NASCAR track racing. NASCAR needs more attention towards tailoring and improving its digital functions to draw in the kids target market.
Generation Y.
Generation Y target audience consists of those who invested five times more resources on discretionary costs i.e. purchasing tickets for racing events, than others. This huge expense makes the sector capacity for NASCAR marketing strategy of increasing its fan base. The marketplace section is also easy to approach as 81% of the Y Generation consumer uses Facebook the use and every day is two times of utilizing tv and radio. The market sector views sports as a social occasion, instead of adherence to sport. The marketplace section thinks about NASCAR as an organization doing not have in creating a multiculturalism environment. Competitive Cost Analysis Cost Modeling Techniques Case Study Help needs to take different steps to enhance the experience of Generation Y customers in its occasions.
5 C's of Marketing
5 C's of marketing assists in taking choices relating to marketing. These 5 C's requirements to be analysed effectively for taking any marketing choice. These 5 C's mean Environment, Business, Collaborators, Clients and Competitors.
Climate/Context.
It requires to make PESTLE analysis in order to comprehend climate or context in which NASCAR is working. PESTLE represents political, economic, social, technical, legal and ecological and is stated above.
Company.
NASCAR is a car racing business with having USP of high quality car racing with an international structure. Its sector is sports team and occasions. Its target market is males in the age of 15-60 years. Business has closed business culture and having non-interventionist technique.
Collaborations.
Collaborations consists of distributors, providers and alliances of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution. It is worked together with various racing teams which are participating in racing. It likewise teamed up with Turners Sport for digital rights. NASCAR used to get pay check of around $15 million every year from Turner Sports. There are variety of cons behind this offer. NASCAR had to get approval from Turner Sport if it desire to produce its Facebook page, twitter account or even mobile application. Turner Sport likewise had rights of every single video which is shoot during race at track.
Consumers.
The consumer of Competitive Cost Analysis Cost Modeling Techniques Case Study Analysis are its audiences. They target customers with having age of 15-60 years. Fan base of NASCAR comprised of married males with a typical age of 47, which passes their fandom to their youngsters and develop generational loyalty.
Competitors.
The direct competitors of NASCAR are Solution 1 and Moto GP. Teams typically represents sponsors in NASCAR and the medium of marketing is chauffeurs. It can be stated that motorists and race cars and trucks are rivals. These motorists can break Competitive Cost Analysis Cost Modeling Techniques Case Study Solution if they got better chance in regards to rewards and television direct exposure.
Marketing Strategies.
1. Preserving and establishing Facebook Page.
One of the potential target markets sections for NASCAR is Hispanics which is the growing population sector of U.S.A. however sadly NASCAR had been unable to attract the this targeted sector. It ought to establish a Facebook page including the info regarding the races and the locations of tracks to make the customer helpful about the core operations of NASCAR.
2. Developing and Updating Accounts of Key Drivers.
NASCAR motorists has a low star power as compare to players of other sports. Its ranks 7th in terms of star power (see Case Exhibition). The major factor behind it is that, the racers mainly play in teams and are not able to build a key account and keep a close contact with fans. The poor contacts with fans lead to less attraction of viewers towards the racers and a low star power. Star power is an essential factor for bring in viewers towards tracks and towards television. The star power for the drivers at NASCARA might be improved by creating and updating accounts of key drivers by NASCARA itself. This would get rid of the requirement of requiring motorists to maintain their accounts and would result in increasing fans attention towards NASCARA motorists.
3. Establishing New Games and improving current video games for kids.
In order to draw in these kids, NASCARA needs to enhance its current racing games by introducing customization in the cars i.e. changing colours, choice of speed, presenting group racing in the game, utilizing better graphics related to the racing tracks and introducing different levels in the video game. All these adjustments in the present video game would provide better experience to kids.
In addition to it, NASCAR should also construct brand-new video games connected to racing like kids racing with kids characters as drivers, animation racing with racing between numerous animation characters with a choice of choosing the favourite cartoon character for the kids. These methods would enable the business to draw in among its possible target sections.
4. Presenting multiculturalism at events.
Competitive Cost Analysis Cost Modeling Techniques Case Study Help events are comprised of fans with very few multiculturalism, due to cost of arrival in events, making it unattractive for the customers perceiving sport occasions as affairs i.e. Generation Y customers. As the Generation Y customers are a prospective target market for NASCAR, for that reason the company must take particular steps to attract this possible target market. It should embrace strategies to draw in the consumers far from the tracks location with various culture. The technique to do so could be offering unique discount rates on tickets or free tickets to audiences coming from a particular range or from another state. It would increase cultural diversity of the fans and would make Generation Y customers more satisfied.
5. Improving Consumer Experience at Tracks.
NASCAR ought to work on infrastructure and facilities at tracks because on the race day audiences got dissatisfied. Viewers have many expectations from Competitive Cost Analysis Cost Modeling Techniques Case Study Solution because in exact same market other business are supplying better services than NASCAR. IF NASCAR don't work on this issue then its fans might shifted to its rivals.
Marketing Spending plan
Marketing spending plan made on the basis of the above strategies for the duration of 5 years from 2011 to 2015, shows the expense associated information for the marketing strategies. (See Appendix B). It can be seen that method 5 of enhancing consumer experience at tracks would need highest initial financial investment and expense and method 4 of introducing multiculturalism will need least expensive initial investment with least expensive even more annually expense. The business needs to focus on the resource allowance on these methods on the basis of its available resources and the prospective advantages which the method would supply.
KEEP IN MIND: The worths about cost are presumed on logical basis due the lack of realities and figures connected to cost in the case study. Inflation rate of United States is presumed to be 10%.
Recommendations.
On the basis of deep analysis of the external and internal factors of Competitive Cost Analysis Cost Modeling Techniques Case Study Solution causing the decrease of television viewership rate and attendance rate at tracks, the above marketing techniques are recommended to NASCAR to increase its fan base in long term. These techniques would manage internal aspects like poor customer experience at tracks, insufficient social media marketing, incapable digital medias like video games, absence of culturalisms at tracks etc., along with with external aspects like moving of fans towards other sports, demographical changes in America and changing domesticity styles.
