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Hidden Costs Of It Outsourcing Case Study Solution and Analysis


Hidden Costs Of It Outsourcing Case Study Analysis (National Association for Stock Vehicle Automobile Racing) is an organization conducting series of Stock Cars and truck racing in United States and serving as an approving body for driving the guidelines for Stock Cars and truck Racing. The organization was established in 1947, by "Huge Bill" France. NASCAR organize Stock Car Racing occasions in United States with the presence of about 130000 viewers usually in 2005. It likewise relayed its occasions in about 150 countries. Stock Cars And Truck Racing by NASCAR is the second biggest viewer sport, with greatest number of sponsors. It has about 500 sponsors contributing billions of dollars in its revenue. The other sources of income for Hidden Costs Of It Outsourcing Case Study Analysis consists of; 10% of the overall profits from television rights, sanctioning costs i.e. $1-2 million per race, and licencing NASCAR brand to business.

NASCAR has a closed corporate culture with the non-interventionist technique. Nevertheless this non collaborative technique brings tensions in the sport. The structure of Cars and truck of Tomorrow by Hidden Costs Of It Outsourcing Case Study Analysis, with an objective of safety for the motorists, brought different stress amongst the stakeholders of the sport.
Executive Summary
The interaction audit, performed in 2010, exposed that despite the fact that the organisation highly rely on the interactions between its stakeholders, there was no identifiable business communication strategy. (

The audit mentioned different lacking of NASCAR in regards to absence of internal combination, lack of fan management technique and absence of social and digital media of marketing. The business has complex environment with independent tracks, groups and drivers. This structure with closed business culture bring numerous obstacles in speeding up a change. Other partners in environment consists of the media networks i.e. television and radio, and corporate marketers.

Hidden Costs Of It Outsourcing Case Study Help audiences was highly loyal to the sport and the brand names associated with the NASCAR, making it appealing for sponsors and corporate marketers.

Problem Statement.

The business is currently facing the issue of decreasing rates of presence at racing tracks and rates of television viewers. This can put a substantial influence on its earnings from sponsors, media rights, and from other sources of revenue.

Situational Analysis.

The business was rather effective till 2005 with its standard marketing techniques, however quickly after 2005 the business starts dealing with numerous problems consisting of decrease of its fan base. Numerous external in addition to internal factors are responsible for the decline. Internal elements include; insufficient financial investment in social media and other digital medias of.

Fan base of NASCAR made up of married males with a typical age of 47, which passes their fandom to their youngsters and create generational commitment. Other challenges for NASCAR consists of the shift of its fans to other sports as they were improving their fan's experience enabling access to their broadcasts out of the houses through jumbo turns, Wi-Fi gain access to, and so on.

SWOT Analysis.


In SWOT analysis, strengths defined as business's qualities which are different from its competitors. These are business's core proficiencies on which business performance or company success based on. Hidden Costs Of It Outsourcing Case Study Solution core competencies includes it has rights of determining guidelines as sanctioning body. Guidelines and guidelines concerning expert stock car racing are dictated by NASCAR like if any group with required abilities and resources can enter into races by following rules and guidelines dictated by NASCAR. So NASCAR has monopoly it this element. Its strengths likewise includes that it has title of second biggest viewer sport in the United States with having more fortune 500 sponsors based in US. Its races were utilized to relay in more than 150 countries all over the world with more than $56 million earnings. The main sources of their profits come from television rights, approving charges, sponsorship and licensing. It has longest season of 10 months and having ownership of three nationwide series i.e. Camping World Truck Series, the Sprint Cup Series and the Nationwide Series. It has likewise big resource of fans and business sponsors. All the occasions of NASCAR are sponsored by corporates since of biggest brand name commitment of fans toward brand names promoted by Hidden Costs Of It Outsourcing Case Study Solution. (See Appendix A).

Weak points.

Weak Points in SWOT Analysis are thought about as external factors. Weaknesses includes the elements that stops business to carry out at required level of efficiency. Weak points of NASCAR includes its close culture which is non collaborative. They have non-interventionist approach. They normally utilized to form guidelines and other required procedures without intervention of others which leads to poor collaboration. NASCAR develops Automobile of Tomorrow without partnership so result is that motorists did not like that idea. As this is racing sport so covering of sports by media is also tough. It was likewise discovered that NASCAR had no effective technique for business interaction. They do not know how to handle problem if it took place off track. Inefficient organisation communication leads to that they don't have clear instructions for their long term goals. They don't know that where they wish to see this sport in future.
Porter's 5 Forces Analysis

NASCAR usually utilized to rely on conventional media sources like local newspaper for publicity of its sports. NASCAR also came to understand from these standard media outlets that sport was hard to cover. When sports fans were asked relating to popular celebs and stars then NASCAR driver was not discovered even in leading twenty responses.


Threats in SWOT analysis are specified as external aspects that can threat to company's success. Economic down turn was experienced in late 2000 which can be threat for NASCAR because if there is economic down turn then people would be having less roi. Earning of individuals would be effected and they would be more conscious in spending their cash. Economic down turn likewise results in boost fuel rates which also impacted NASCAR. Due to the fact that fans of NASCAR used to attend its occasion from long distances. NESCAR had a rule of 65/25/10 for profits distribution. 65 percent incomes from media rights would be distributed to race course, 25 percent earnings would be distributed to contending group and staying 10 percent would be maintained by NESCAR which is approving body. Completing group wished to increase their portion of revenue from 25 percent due to the fact that of boost in operating cost of a race team and likewise there is decrease in the number of full-season sponsorship. NESCAR also deals with risks from other sponsors because they are making massive investments to enhance experience of fans. For instance which includes upgrading existing avenues, developing new avenues, providing Wi-Fi facility and likewise offering other interactive mediums to connect sports on smartphones. Fan base of NASCAR comprised of married males with a typical age of 47, which passes their fandom to their children and produce generational loyalty. The challenge is that the household system in America was altering resulting in decrease of impact of married male fan base over their children. In addition to it perceptions about cars and truck was likewise altering with perceiving automobile an automobile to reach at point B from point A, instead of as an enjoyable task. Now if Hidden Costs Of It Outsourcing Case Study Help make significant investments in brand-new sectors which are based on 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 utilized to evaluate market in which company is working. It helps in identifying what are strengths and weak point of any specific market. It recommend that every market is different from one another. It is necessary to understand market in which company is working due to the fact that NASCAR's bottom line i.e. net profit is heavily depends on this. There are 5 forces that are used to recognize success, intensity and attractiveness of Hidden Costs Of It Outsourcing Case Study Help business.

Competitive Competition

These motorists can go versus NASCAR if they got better chance in terms of prizes and television exposure. If viewers take pleasure in other race cars and motorists more than NASCAR then viewers can move to those other intriguing vehicles and drivers. NASCAR might be having threat from its two direct competitors that is Solution 1 and Moto GP.
Swot Analysis
Provider Power

The supplier power indicates the variety of suppliers are readily available in industry and what is the expense connected with supplier if business shifts from one supplier to another. In this market there is supply monopoly because chauffeurs with needed abilities and resources are limited.

Purchaser Power

This force is regarding to customers that is it easy for customers to move to other items. If there is more changing cost is associated then clients are less likely to switch. When it comes to NASCAR clients are its audiences. Viewers can switch to other rivals quickly since audiences will having low changing cost.

Risk of Alternative

Replacements are referred as alternatives. The substitutes in this case can be other entertainment indicates like viewers can shift to other sports. So there are large range of alternatives are available in this situation which suggests that threat of alternative is high.

Risk of New Entry

It is defined as how it is easy for any company to go into in that specific industry. When it comes to Hidden Costs Of It Outsourcing Case Study Solution danger of brand-new entry is low. If any business needs to go into in this company than they have to make heavy investments, because. They need to develop vehicles and racing tracks and likewise requires to pay hefty total up to motorists for switching.

PESTEL Analysis


As NASCAR is working in various markets so it requires to deal with different policies. It is also noted that NASCAR has faced increased scrutiny regarding regulative. Every government has various priority so NASCAR has to be prepared for it as priority can be moved to other sector.


Economic aspects consists of tax rate, exchange rate, economic efficiency of that particular business, conditions of labour market, inflation rate and so on. If there is government intervention in the marketing and sales sector, fortunes of the NASCAR and its competitors can be impacted. NASCAR can take advantage of abilities of staff members to create brand-new chances and improve existing chances.


Every society is different from each other. Each has different social worths and standards. It helps in understanding relating to society and preference of customers. Social factors consists of customs, culture, attitudes towards particular services and products, demographics, norms, interests etc. It can be concluded that marketing through other ways instead of conventional (i.e. newspaper) can be chosen in this society.


In this case of NASCAR it can be kept in mind that companies are heavily investing for research study and development. NASCAR must also work on its media rights policy with Turner Broadcasting System.

Vrio Analysis
Legal plays an essential role in every country due to the fact that every country has different legal terms and conditions. Hidden Costs Of It Outsourcing Case Study Analysis requires to be make sure that they protect their legal rights in every county so any business does not harm to its legal rights.


Ecological factors are likewise important for every single company. Due to the fact that typically governments don't allow those business which can harm to environment. These environmental aspects consists of laws concerning contamination, environment modification, safe waste disposal, policies regarding insurance coverage etc. NASCAR requires to make sure that its vehicles are not generating pollution more than acceptable level.

7 P's of Marketing


The items of Hidden Costs Of It Outsourcing Case Study Solution in its product portfolio are; racing events tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand, sanctioning guidelines for races and ad-space to business marketers throughout broadcast of NASCAR races. (Hanlon, 2018).


Prices strategy of NASCAR for its race occasions tickets is based upon the place and importance of the racing occasions. Together with race events tickets, NASCAR also charge various service fees to its stakeholders and earns income. For example it charged approving fees of $1-2 million per race usually in 2005.


Marketing technique of NASCAR is highly based upon its fan base. A strong fan base share its fandom with others and increase the number of viewers for NASCAR races.


NASCAR have its racing tracks in different cities in United States. The most important tracks of NASCAR consists of Atlanta Motor Speedway in Georgia, Vehicle Club Speedway in California and Darlington Raceway in South Carolina. It tries to perform its races in most of the cities in United States to comprehend nationwide popularity.


Nestle individuals method is consisted of supplying better experience to its viewers, its fan base and to all of its stakeholders. Individuals are an important element of Hidden Costs Of It Outsourcing Case Study Help A marketing method as its occasions are the source of entertainment for crowd. Its people method includes efforts to offer much better experience to its Fans, Race Drivers, Crew, Occasion Organizers and so on, all of which come under people strategy of NASCAR.


Several company procedures are needed to conduct racing occasions in an effective method. These procedures consist of; correct schedule of time, plan for viewers, offering tickets, arrangement of area for sponsors, managing logistics etc. These all procedures contribute I developing NASCAR image, enhancing spectators experience and increasing fan base.

Physical Proof.

Crucial physical evidences for the NASCAR consists of the existence of its racing tracks, stock cars and trucks and racing occasions. Together with it, its retailing brands including t-shirts, caps, goodies etc., also function as a physical proof for NASCAR.

Item Life Process Evaluation.

The racing events by Hidden Costs Of It Outsourcing Case Study Analysis was introduced on June 19, 1949. The first race was held at Charlotte Speedway in North Carolina. There were about 13000 fans present in the race. At the first stage competitors for NASCAR was low, as the rivals drove the cars comparable to the vehicles driven by common individuals.


The 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 relaying its races on television 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 organization into one with global fan base. He started a brand-new period of lucrative sponsorships and tv agreements for NASCAR.


The maturity duration for NASCAR started with the efforts of William France Jr., with the company having wide range of earnings sources. The business has about 500 sponsors with transmitting its occasions in about 150 nations. The company has a great deal of tracks in the majority of the cities of United States.


The decline in the business's offerings started after 2005 with average presence rate per race declined by 22% from 2005 to 2010 and television viewership rate declined by 30% from 2005 to 2010. The significant reasons for decline include the monetary crisis of 2008, which increased the cost of reaching tracks for viewers due to increasing fuel prices, and the moving of its fan base towards other sports.

Market Division.

The marketplace segmentation of Hidden Costs Of It Outsourcing Case Study Solution can be divided into four sectors; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).


The geographical segmentation of Hidden Costs Of It Outsourcing Case Analysis is based upon the geographical presence of its tracks in different states and cities in United States, and the tv broadcasting of its events in various nations. The company has 23 tracks in about 20 states of America and has tv broadcast through numerous Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This large geographical segmentation supplies the company local along with international fan base.


The market division of Hidden Costs Of It Outsourcing Case Study Help is likewise highlydiverse based upon the gender, earnings and age of the consumer. To increase the market sector of its market NASCAR should revise its marketing strategies to draw in more age groups and lower its rates to enter in the market segment with a low typical income.


The mental qualities of the majority of the fans are quite comparable. NASCAR has a fan base with a loyalty. Once in a week, NASCAR fans perceive it compulsive to acquire tickets and see the races. 71% of them prefer to acquire products with a NASCAR trademark name. They are quite extrovert and want to join other fans while racing. They desire quality racing with low rate at practical area. NASCAR has actually tried to increase the quality of its racing by presenting stage racing, they also have actually attempted to lower costs and make the event more practical by presenting live racing.


Behavioural division of Hidden Costs Of It Outsourcing Case Study Solution is based upon the behaviour of fans in regards to watching the race live on the tv or by entering the occasions. Currently, the fans choice is towards seeing the race in the house on television rather than going, as the customer experience at NASCAR tracks is not beneficial in addition to expensive. This choice makes the rates for presence lower than the rates for television audiences. NASCAR needs to change the behaviour of its fan base by presenting qualitative services at its tracks.

Target audience.


One of the possible target market of NASCAR was Hispanics; the young and growing population of United States. The market segment has great possible 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 section has increasing wealth rate with about $1 trillion of wealth in 2014.


Kids are likewise one of the prospective target market segment for NASCAR, as they are more connected socially than other groups. Car racing video games established by Hidden Costs Of It Outsourcing Case Study Analysis can be a prospective source of getting attention of kids towards NASCAR track racing. NASCAR needs more attention towards tailoring and improving its digital functions to attract the kids target market.

This huge expense makes the section capacity for NASCAR marketing method of increasing its fan base. The market sector thinks about NASCAR as an organization doing not have in developing a multiculturalism environment. NASCAR should take numerous actions to enhance the experience of Generation Y consumers in its occasions.

5 C's of Marketing

5 C's of marketing assists in taking choices concerning marketing. These 5 C's requirements to be evaluated effectively for taking any marketing decision. These 5 C's represent Climate, Business, Collaborators, Customers and Competitors.


It requires to make PESTLE analysis in order to comprehend climate or context in which NASCAR is working. PESTLE represents political, financial, social, technical, ecological and legal and is mentioned above.


NASCAR is an automobile racing company with having USP of high quality car racing with a global structure. Its sector is sports team and occasions. Its target audience is males in the age of 15-60 years. Company has actually closed business culture and having non-interventionist approach.


Collaborations consists of distributors, suppliers and alliances of Hidden Costs Of It Outsourcing Case Study Help. It is collaborated with different racing groups which are taking part in racing. It also worked together with Turners Sport for digital rights. NASCAR used to make money check of around $15 million each year from Turner Sports. There are variety of cons behind this deal. NASCAR had to get approval from Turner Sport if it want to develop its Facebook page, twitter account or even mobile application. Turner Sport likewise had rights of each and every single video which is shoot throughout race at track.


The customer of Hidden Costs Of It Outsourcing Case Study Solution are its viewers. They target clients with having age of 15-60 years. Fan base of NASCAR comprised of married males with an average age of 47, which passes their fandom to their youngsters and produce generational commitment.


The direct competitors of NASCAR are Solution 1 and Moto GP. Groups usually represents sponsors in NASCAR and the medium of marketing is drivers. It can be said that chauffeurs and race cars and trucks are rivals. If they got better opportunity in terms of rewards and tv direct exposure, these chauffeurs can go against NASCAR.

Marketing Strategies.

1. Keeping and establishing Facebook Page.
One of the prospective target audience sectors for NASCAR is Hispanics which is the growing population section of U.S.A. but unfortunately NASCAR had been not able to draw in the this targeted section. In order to attract the young growing generation the NASCAR ought to market by using social media like Facebook. It should establish a Facebook page including the info concerning the races and the locations of tracks to make the customer useful about the core operations of Hidden Costs Of It Outsourcing Case Study Help. It needs to also upgrade its Facebook page on daily basis to supply details about its upcoming occasions. This would make the target market sector more helpful about business and would lead to attracting big fans base.
2. Establishing and Updating Accounts of Secret Drivers.
Hidden Costs Of It Outsourcing Case Study Solution motorists has a low star power as compare to gamers of other sports. The poor contacts with fans result in less tourist attraction of viewers towards the racers and a low star power. Star power is an important factor for bring in audiences towards tracks and towards tv.
3. Establishing New Games and enhancing current games for kids.
In order to bring in these kids, NASCARA ought to improve its present racing games by presenting modification in the automobiles i.e. changing colours, selection of speed, presenting group racing in the game, using better graphics related to the racing tracks and introducing numerous levels in the game. All these modifications in the present video game would offer better experience to kids.
Along with it, NASCAR should likewise 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 an option of picking the favourite cartoon character for the kids. These methods would enable the business to draw in one of its potential target sections.
4. Presenting multiculturalism at occasions.
NASCAR occasions are made up of fans with really few cultural diversity, due to expense of arrival in occasions, making it unsightly for the customers viewing sport events as social occasions i.e. Generation Y consumers. As the Generation Y clients are a potential target market for NASCAR, for that reason the company must take specific procedures to attract this possible target market.
5. Improving Customer Experience at Tracks.
NASCAR should work on facilities and amenities at tracks because on the race day viewers got disappointed. Viewers have lots of expectations from Hidden Costs Of It Outsourcing Case Study Analysis because in very same market other business are offering better services than NASCAR. IF NASCAR do not work on this problem then its fans may shifted to its competitors.

Marketing Budget plan

Marketing spending plan made on the basis of the above strategies for the period of 5 years from 2011 to 2015, shows the cost related data for the marketing methods. (See Appendix B). It can be seen that technique 5 of enhancing customer experience at tracks would need highest preliminary investment and cost and strategy 4 of introducing multiculturalism will need lowest preliminary investment with most affordable further per year cost. The business must prioritize the resource allowance on these methods on the basis of its offered resources and the potential advantages which the method would supply.
KEEP IN MIND: The worths about expense are assumed on logical basis due the lack of facts and figures related to cost in the event study. Inflation rate of United States is presumed to be 10%.

On the basis of deep analysis of the external and internal elements of Hidden Costs Of It Outsourcing Case Study Solution triggering the decline of television viewership rate and presence rate at tracks, the above marketing methods are advised to NASCAR to increase its fan base in long term. These methods would manage internal elements like poor consumer experience at tracks, inadequate social media marketing, incapable digital medias like video games, lack of culturalisms at tracks and so on, along with with external aspects like shifting of fans towards other sports, demographical modifications in America and altering domesticity styles.