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Hidden Costs Of It Outsourcing Case Study Solution and Analysis


Introduction

Hidden Costs Of It Outsourcing Case Study Help (National Association for Stock Car Car Racing) is a company conducting series of Stock Automobile racing in United States and functioning as a sanctioning body for driving the guidelines for Stock Car Racing. The company was founded in 1947, by "Huge Expense" France. NASCAR organize Stock Vehicle Racing occasions in United States with the presence of about 130000 viewers usually in 2005. It also relayed its events in about 150 countries. Stock Car Racing by NASCAR is the second largest viewer sport, with highest number of sponsors. It has about 500 sponsors contributing billions of dollars in its revenue. The other sources of earnings for Hidden Costs Of It Outsourcing Case Study Help includes; 10% of the total income from tv rights, approving fees i.e. $1-2 million per race, and licencing NASCAR brand name to business.

NASCAR has a closed corporate culture with the non-interventionist method. The building of Automobile of Tomorrow by NASCAR, with an intent of safety for the chauffeurs, brought different tensions among the stakeholders of the sport.

The interaction audit, carried out in 2010, exposed that despite the truth that business highly count on the interactions in between its stakeholders, there was no identifiable service interaction strategy. The industry's target customers, direction and goals were all unidentified.

The audit pointed out different doing not have of NASCAR in terms of absence of internal combination, absence of fan management strategy and absence of digital and social media of marketing.

Hidden Costs Of It Outsourcing Case Study Solution audiences was extremely devoted to the sport and the brands associated with the NASCAR, making it appealing for sponsors and corporate marketers.

Problem Statement.

The company is presently facing the issue of decreasing rates of presence at racing tracks and rates of television audiences. This can put a significant influence on its incomes from sponsors, media rights, and from other sources of revenue.

Situational Analysis.

Although the business was quite effective till 2005 with its conventional marketing methods, however soon after 2005 the company starts dealing with various problems consisting of decrease of its fan base. Numerous external in addition to internal factors are responsible for the decrease. Internal factors include; insufficient investment in social media and other digital medias of.

Fan base of NASCAR consisted of married males with an average age of 47, which passes their fandom to their children and develop generational commitment. However the household system in America was altering resulting in reduction of impact of married male fan base over their children. Together with it understandings about automobile was also altering with perceiving automobile an automobile to reach at point B from point A, rather than as an enjoyable project. Other difficulties for Hidden Costs Of It Outsourcing Case Study Solution consists of the shift of its fans to other sports as they were improving their fan's experience permitting access to their broadcasts out of the houses through jumbo turns, Wi-Fi gain access to, and so on. These all difficulties were tending the business to modify its marketing methods.

SWOT Analysis.

Strengths.


NASCAR core competencies includes it has rights of dictating guidelines as approving body. Guidelines and guidelines regarding expert stock vehicle racing are determined by NASCAR like if any team with required skills and resources can enter into races by following rules and policies dictated by NASCAR. All the events of NASCAR are sponsored by corporates because of biggest brand commitment of fans toward brand names advertised by Hidden Costs Of It Outsourcing Case Study Analysis.

Weaknesses.

Weaknesses in SWOT Analysis are thought about as external aspects. Weaknesses includes the aspects that stops company to carry out at required level of efficiency. Weaknesses of NASCAR includes its close culture which is non collective. They have non-interventionist method. They usually utilized to form guidelines and other required procedures without intervention of others which leads to bad partnership. NASCAR establishes Car of Tomorrow without cooperation so result is that drivers did not like that idea. As this is racing sport so covering of sports by media is also tough. It was also found that NASCAR had no effective technique for business communication. If it took place off track, they do not know how to deal with concern. Inefficient business interaction results in that they don't have clear direction for their long term goals. They don't understand that where they want to see this sport in future.

Opportunities.

Opportunities in SWOT analysis are external elements which can be favourable to business or the external elements on which company is having competitive benefit. NASCAR normally used to count on traditional media sources like local newspaper for publicity of its sports. Usually these conventional media sources attempt to cover their house group and particular kind of events. NASCAR likewise came to know from these conventional media outlets that sport was challenging to cover. Media landscape likewise changed from conventional to digital landscape. Newspapers went out of business. NASCAR can deal with its capabilities to get optimal possible gain from this brand-new digital landscape. NASCAR have underinvestment in digital resources. So it can capitalize in social and digital media to get its benefits. Digital rights of NASCAR were also 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 offer. For example Hidden Costs Of It Outsourcing Case Study Analysis had to get approval from Turner Sport if it want to create its Facebook page, twitter account or perhaps mobile application. Turner Sport also had rights of every single video which is shoot throughout race at track. Then they are needed to pay licensing charges to Turner Sport, if media sources like newspapers, magazines and cable channels desire to publish videos of races on their respective pages. So NASCAR can work on terms and try to work out with Turner Sports to get maximum advantages of it. Star power plays extremely important role in generating incomes from every sport. However it was noted that Hidden Costs Of It Outsourcing Case Study Analysis is lagging in this location i.e. star power. For instance when sports fans were asked concerning popular stars and stars then NASCAR driver was not found even in top twenty actions. So NASCAR can put efforts in this area too for profits generation. They must guide their drivers that how they can become sport stars. 4 strategic focuses which are produced by research group can also be functioned as chance for NESCAR. These four strategic focuses compares and analysis Hidden Costs Of It Outsourcing Case Study Solution strategies.

Dangers

Dangers in SWOT analysis are defined as external aspects that can hazard to business's success. Economic down turn was experienced in late 2000 which can be danger for NASCAR since if there is financial down turn then people would be having less return on investment. Earning of people would be effected and they would be more mindful in spending their cash. Economic down turn likewise results in boost fuel costs which likewise affected NASCAR. Because fans of NASCAR utilized to attend its event from fars away. NESCAR had a rule of 65/25/10 for revenue circulation. 65 percent revenues from media rights would be dispersed to race tracks, 25 percent profits would be distributed to contending group and remaining 10 percent would be retained by NESCAR which is sanctioning body. Contending group wanted to increase their part of profits from 25 percent since of increase in running expense of a race team and also there is decrease in the number of full-season sponsorship. NESCAR also deals with dangers from other sponsors due to the fact that they are making enormous investments to enhance experience of fans. Which consists of updating existing opportunities, developing brand-new avenues, providing Wi-Fi center and likewise supplying other interactive mediums to connect sports on smart devices. Fan base of NASCAR consisted of married males with a typical age of 47, which passes their fandom to their children and develop generational loyalty. The difficulty is that the family system in America was altering resulting in decrease of impact of married male fan base over their children. Together with it understandings about automobile was also changing with viewing automobile a vehicle to reach at point B from point A, instead of as a fun job. Now if Hidden Costs Of It Outsourcing Case Study Solution make considerable investments in new segments which are based upon brand-new clients then it may deal with unfavorable comments from its core fan base.

Porter's 5 Forces Analysis

Porter's 5 forces is a design that is utilized to analyse market in which business is working. It helps in determining what are strengths and weak point of any specific industry. It recommend that every market is various from one another. It is important to comprehend industry in which business is working because NASCAR's bottom line i.e. net profit is heavily depends on this. There are 5 forces that are utilized to identify profitability, intensity and attractiveness of Hidden Costs Of It Outsourcing Case Study Analysis company.

Competitive Competition

These drivers can go versus NASCAR if they got much better chance in terms of rewards and tv direct exposure. If audiences enjoy other race cars and trucks and chauffeurs more than NASCAR then audiences can move to those other fascinating vehicles and chauffeurs. NASCAR could be having danger from its two direct rivals that is Solution 1 and Moto GP.

Supplier Power

If company shifts from one supplier to another, the provider power shows the number of suppliers are readily available in market and what is the expense associated with supplier. In this industry there is supply monopoly due to the fact that chauffeurs with required resources and skills are restricted.

Purchaser Power

In the case of NASCAR clients are its viewers. Audiences can change to other competitors quickly since audiences will having low switching cost.

Threat of Alternative

Replacements are referred as options. The replacements in this case can be other entertainment suggests like audiences can move to other sports. There are large range of replacements are available in this situation which suggests that danger of replacement is high.

Danger of New Entry

In the case of NASCAR hazard of new entry is low. They need to develop automobiles and racing tracks and likewise requires to pay substantial quantity to drivers for switching.

PESTEL Analysis

Political


As NASCAR is working in different markets so it needs to face various regulations. It is likewise kept in mind that NASCAR has actually faced increased analysis concerning regulative. Every government has various top priority so NASCAR has actually to be prepared for it as concern can be shifted to other sector.

Cost-effective

Economic factors includes taxation rate, exchange rate, financial performance of that particular business, conditions of labour market, inflation rate and so on. Fortunes of the NASCAR and its competitors can be impacted if there is government intervention in the marketing and sales sector. NASCAR can take advantage of abilities of employees to create new opportunities and improve existing chances.

Social

Each has different social worths and standards. It helps in comprehending relating to society and choice of customers.

Technical

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

Legal

Since every country has various legal terms and conditions, Legal plays an important function in every nation. Hidden Costs Of It Outsourcing Case Study Analysis needs to be make sure that they protect their legal rights in every county so any business does not harm to its legal rights.

Environmental

Environmental factors are also important for every business. NASCAR needs to make sure that its automobiles are not generating pollution more than acceptable level.

7 P's of Marketing

Product

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

Cost.

Rates technique of NASCAR for its race events tickets is based upon the location and significance of the racing events. In addition to race events tickets, NASCAR also charge numerous service charge to its stakeholders and earns earnings. For example it charged approving fees of $1-2 million per race usually in 2005.

Promo.

Marketing technique of Hidden Costs Of It Outsourcing Case Study Analysis is extremely based upon its fan base. A strong fan base share its fandom with others and increase the number of viewers for NASCAR races. The business is not totally relied upon its fan base for its promo and promote through local radio stations too. The company has actually likewise adopted the retailing media of promotion, in which the company offers products with its logo design.

Location.

NASCAR have its racing tracks in various cities in United States. The most important tracks of NASCAR includes Atlanta Motor Speedway in Georgia, Car 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 comprehend nationwide popularity.

Individuals.

Nestle individuals method is consisted of providing better experience to its viewers, its fan base and to all of its stakeholders. Individuals are an essential aspect of Hidden Costs Of It Outsourcing Case Study Analysis A marketing technique as its events are the source of home entertainment for crowd. Its people technique consists of efforts to provide much better experience to its Fans, Race Drivers, Crew, Event Organizers etc., all of which come under individuals method of NASCAR.

Procedures.

Numerous service procedures are required to conduct racing occasions in an efficient method. These processes consist of; proper schedule of time, arrangement for viewers, offering tickets, arrangement of space for sponsors, managing logistics etc. These all processes contribute I building NASCAR image, improving viewers experience and increasing fan base.

Physical Proof.

Most important physical proofs for the NASCAR consists of the presence of its racing tracks, stock vehicles and racing occasions. Together with it, its retailing brand names consisting of tee shirts, caps, goodies etc., also act as a physical proof for NASCAR.

Item Life Process Assessment.

The racing events by NASCAR was presented on June 19, 1949. At the first stage competition for NASCAR was low, as the competitors drove the cars similar to the cars driven by regular people.

Growth.

After conducting its first race effectively the business moved towards developing its own tracks. The very first Hidden Costs Of It Outsourcing Case Study Solution based track, namely the Darlington Raceway track, was started in 1950 in South Carolina. It was followed by establishment of more raceways including Daytona International Speedway, which was opened in 1959. After the growth of racing tracks the business moved towards transmitting its races on television in 1979. The very first event transmitted on television was flag-to-flag protection of Daytona.

In 1972, William France Jr., ended up being the president of NASCAR and n about 3 decades, he transformed NASCAR from a local Sport popular company into one with worldwide fan base. He started a new age of lucrative sponsorships and tv contracts for NASCAR.

Maturity.

The maturity period for NASCAR started with the efforts of William France Jr., with the company having vast array of revenue sources. The business has about 500 sponsors with transmitting its occasions in about 150 nations. The company has large number of tracks in most of the cities of United States.

Decline.

The major causes of decline consist of the financial crisis of 2008, which increased the cost of getting here at tracks for viewers due to increasing fuel rates, and the shifting of its fan base towards other sports.

Market Segmentation.

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

Geographical.

The geographical segmentation of Hidden Costs Of It Outsourcing Case Help is based upon the geographical presence of its tracks in different states and cities in United States, and the tv broadcasting of its occasions in different countries. The company has 23 tracks in about 20 states of America and has television broadcast through various Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This huge geographical segmentation supplies the business local in addition to global fan base.

Demographic.

The group division of Hidden Costs Of It Outsourcing Case Study Help is also highlydiverse based upon the gender, earnings and age of the consumer. To increase the group sector of its market NASCAR must modify its marketing techniques to draw in more age groups and lower its costs to enter in the market sector with a low average income.

Psychographic.

The mental characteristics of most of the fans are rather comparable. NASCAR has a fan base with a loyalty. When in a week, NASCAR fans view it compulsive to purchase tickets and see the races. 71% of them prefer to acquire items with a NASCAR brand name. They are quite extrovert and are willing to mingle with other fans while racing. They desire quality racing with low rate at convenient location. NASCAR has attempted to increase the quality of its racing by presenting stage racing, they likewise have actually attempted to lower rates and make the occasion more convenient by introducing live racing.

Behavioural.

Behavioural division of NASCAR is based upon the behaviour of fans in terms of enjoying the race live on the tv or by going in the occasions. Presently, the fans preference is towards watching the race at home on television rather than going, as the consumer experience at NASCAR tracks is not favourable as well as expensive.

Target audience.

Hispanics.

One of the potential target market of NASCAR was Hispanics; the young and growing population of United States. The market segment has great potential for NASCAR as the population was growing at a higher rate and it was expected to end up being thrice after forty years and the section has increasing wealth rate with about $1 trillion of wealth in 2014.

Kids.

Kids are likewise one of the potential target audience section for NASCAR, as they are more connected socially than other groups. Developing fan base amongst kids can offer a potential increase in the number of fans for racing due to their connection. Kids invest most of their times in using smartphones and playing computer game. Automobile racing video games established by Hidden Costs Of It Outsourcing Case Study Analysis can be a potential source of getting attention of kids towards NASCAR track racing. Nevertheless, NASCAR's digital features related to kids are not efficient in gaining the attention. NASCAR needs more attention towards customizing and enhancing its digital features to bring in the kids target market.

Generation Y.
Generation Y target market consists of those who invested 5 times more resources on discretionary expenditures i.e. acquiring tickets for racing occasions, than others. This substantial expense makes the sector capacity for NASCAR marketing technique of increasing its fan base. The market sector is also easy to technique as 81% of the Y Generation customer utilizes Facebook the use and every day is twice of using tv and radio. The market sector views sports as a social occasion, instead of adherence to sport. The marketplace sector thinks about NASCAR as an organization lacking in producing a multiculturalism atmosphere. Hidden Costs Of It Outsourcing Case Study Analysis should take various steps to enhance the experience of Generation Y customers in its events.

5 C's of Marketing

5 C's of marketing helps in taking choices relating to marketing.

Climate/Context.

It requires to make PESTLE analysis in order to understand environment or context in which NASCAR is working. PESTLE stands for political, financial, social, technical, ecological and legal and is stated above.

Company.

Hidden Costs Of It Outsourcing Case Study Analysis is a car racing company with having USP of high quality car racing with a global structure. Its sector is sports group and events.

Collaborations.

Collaborations includes distributors, suppliers and alliances of Hidden Costs Of It Outsourcing Case Study Solution. It is worked together with various racing groups which are taking part in racing. It also worked together with Turners Sport for digital rights. NASCAR utilized to earn money check of around $15 million annually from Turner Sports. There are number of cons behind this offer. 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.

Customers.

The client of Hidden Costs Of It Outsourcing Case Study Help are its audiences. They target consumers with having age of 15-60 years. Fan base of NASCAR consisted of married males with an average age of 47, which passes their fandom to their youngsters and develop generational commitment.

Rivals.

The direct competitors of NASCAR are Formula 1 and Moto GP. Groups typically represents sponsors in NASCAR and the medium of advertising is chauffeurs. It can be said that drivers and race vehicles are competitors. If they got better opportunity in terms of prizes and television direct exposure, these motorists can go versus NASCAR.

Marketing Strategies.

1. Establishing and Maintaining Facebook Page.
Among the prospective target audience sections for NASCAR is Hispanics which is the growing population section of USA but regrettably NASCAR had been unable to draw in the this targeted section. In order to attract the young growing generation the NASCAR should market by using social media like Facebook. It must establish a Facebook page containing the info concerning the races and the places of tracks to make the consumer useful about the core operations of Hidden Costs Of It Outsourcing Case Study Solution. It needs to likewise upgrade its Facebook page on everyday basis to supply details about its upcoming events. This would make the target market segment more helpful about the business and would lead to drawing in big fans base.
2. Developing and Upgrading Accounts of Key Drivers.
NASCAR chauffeurs has a low star power as compare to players of other sports. Its ranks 7th in terms of star power (see Case Display). The significant factor behind it is that, the racers mostly play in teams and are not able to build an essential account and preserve a close contact with fans. The poor contacts with fans lead to less tourist attraction of viewers towards the racers and a low star power. Star power is an important element for attracting viewers towards tracks and towards tv. The star power for the chauffeurs at NASCARA could be improved by producing and upgrading accounts of key drivers by NASCARA itself. This would get rid of the requirement of requiring motorists to keep their accounts and would result in increasing fans attention towards NASCARA chauffeurs.
3. Establishing New Games and enhancing existing video games for kids.
In order to bring in these kids, NASCARA should improve its current racing games by introducing modification in the cars and trucks i.e. altering colours, selection of speed, introducing group racing in the game, utilizing better graphics related to the racing tracks and introducing numerous levels in the game. All these modifications in the current video game would provide better experience to kids.
Together with it, NASCAR ought to also construct brand-new video games associated with racing like kids racing with kids characters as chauffeurs, cartoon racing with racing in between various animation characters with a choice of choosing the preferred cartoon character for the kids. These methods would enable the business to bring in among its prospective target sections.
4. Presenting multiculturalism at occasions.
NASCAR events are made up of fans with really couple of cultural variety, due to expense of arrival in events, making it unappealing for the consumers perceiving sport events as social celebrations i.e. Generation Y consumers. As the Generation Y customers are a possible target market for NASCAR, therefore the company needs to take particular procedures to attract this prospective target market.
5. Improving Customer Experience at Tracks.
Hidden Costs Of It Outsourcing Case Study Solution ought to work on infrastructure and amenities at tracks because on the race day viewers got dissatisfied. Audiences have many expectations from NASCAR since in exact same industry other business are offering much better services than NASCAR. Then its fans might moved to its rivals, if NASCAR do not work on this problem. According to fans there were not sufficient centers were readily available as compare to other sports companies. So NASCAR should make certain that it offer adequate facilities that includes cleaned restrooms, comfortable seating plan. They should also supply WIFI services and ease of access of charge card throughout that track. It ought to be also make sure that there suffice jumbo turns positioned at all needed places. There need to be also food stalls that offer quality food to audiences. In this method audiences will be having pleasant experience at the day of occasion. (See Appendix B).
Marketing Budget plan.
Marketing budget plan made on the basis of the above strategies for the period of 5 years from 2011 to 2015, shows the cost associated data for the marketing strategies. It can be seen that method 5 of enhancing client experience at tracks would need highest initial investment and cost and strategy 4 of presenting multiculturalism will need most affordable initial investment with least expensive even more per year expense.
KEEP IN MIND: The worths about expense are assumed on logical basis due the lack of figures and realities associated with cost in the event study. Inflation rate of United States is assumed to be 10%.

Recommendations.

On the basis of deep analysis of the external and internal aspects of Hidden Costs Of It Outsourcing Case Study Analysis triggering the decline of television viewership rate and attendance rate at tracks, the above marketing strategies are advised to NASCAR to increase its fan base in long run. These strategies would manage internal factors like bad consumer experience at tracks, insufficient social networks marketing, incapable digital medias like video games, absence of culturalisms at tracks and so on, along with with external factors like moving of fans towards other sports, demographical changes in America and changing family life designs.

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