Linking Actions To Profits In Strategic Decision Making Case Study Solution & Analysis
Introduction
NASCAR (National Association for Stock Car Vehicle Racing) is a company performing series of Stock Cars and truck racing in United States and acting as an approving body for driving the rules for Stock Vehicle Racing. 2) Stock Car Racing by NASCAR is the 2nd largest spectator sport, with greatest number of sponsors. 1) The other sources of revenue for Linking Actions To Profits In Strategic Decision Making Case Study Analysis consists of; 10% of the total revenue from television rights, approving charges i.e. $1-2 million per race, and licencing NASCAR brand to companies.
NASCAR has a closed business culture with the non-interventionist approach. This non collaborative approach brings tensions in the sport. The building of Vehicle of Tomorrow by Linking Actions To Profits In Strategic Decision Making Case Study Analysis, with an intention of safety for the chauffeurs, brought different tensions among the stakeholders of the sport.
The interaction audit, carried out in 2010, exposed that in spite of the truth that the business highly rely on the interactions in between its stakeholders, there was no identifiable company interaction technique. The market's target consumers, instructions and goals were all unidentified.
The audit explained different doing not have of NASCAR in regards to absence of internal combination, lack of fan management technique and lack of digital and social media of marketing. The company has complicated community with independent tracks, groups and chauffeurs. This structure with closed business culture bring numerous obstacles in speeding up a modification. Other partners in environment includes the media networks i.e. television and radio, and corporate marketers.
Linking Actions To Profits In Strategic Decision Making Case Study Analysis viewers was extremely faithful to the sport and the brand names connected with the NASCAR, making it appealing for sponsors and business marketers.
Issue Declaration.
The company is presently facing the problem of decreasing rates of participation at racing tracks and rates of television audiences. This can put a significant impact on its incomes from sponsors, media rights, and from other sources of income.
Situational Analysis.
Although the business was rather effective till 2005 with its conventional marketing strategies, however right after 2005 the company begins facing various problems consisting of decline of its fan base. Several external along with internal elements are responsible for the decrease. Internal aspects include; insufficient investment in social media 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 youngsters and create generational loyalty. However the family system in America was changing resulting in reduction of influence of married male fan base over their youngsters. Along with it understandings about cars and truck was likewise changing with perceiving vehicle an automobile to reach at point B from point A, instead of as a fun task. Other difficulties for Linking Actions To Profits In Strategic Decision Making Case Study Analysis consists of the shift of its fans to other sports as they were enhancing their fan's experience permitting access to their broadcasts out of the houses through jumbo turns, Wi-Fi access, etc. These all challenges were tending the company to modify its marketing techniques.
SWOT Analysis.
Strengths.
In SWOT analysis, strengths specified as company's qualities which are different from its rivals. These are company's core proficiencies on which company efficiency or company success based upon. Linking Actions To Profits In Strategic Decision Making Case Study Help core competencies includes it has rights of dictating rules as sanctioning body. Guidelines and guidelines relating to professional stock vehicle racing are determined by NASCAR like if any group with required abilities and resources can participate in races by following rules and policies determined by NASCAR. So NASCAR has monopoly it this element. Its strengths likewise consists of that it has title of second biggest spectator sport in the United States with having more fortune 500 sponsors based in US. Its races were used to relay in more than 150 countries around the globe with more than $56 million incomes. The main sources of their revenues originate from tv rights, approving fees, 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 also big resource of fans and business sponsors. Because of greatest brand loyalty of fans towards brands promoted by NASCAR, all the occasions of NASCAR are sponsored by corporates. (See Appendix A).
Weaknesses.
Weaknesses of NASCAR includes its close culture which is non collaborative. Linking Actions To Profits In Strategic Decision Making Case Study Analysis establishes Automobile of Tomorrow without collaboration so result is that chauffeurs did not like that concept. It was likewise found that NASCAR had no reliable strategy for service communication.
Opportunities.
Opportunities in SWOT analysis are external aspects which can be favourable to business or the external factors on which company is having competitive advantage. NASCAR normally utilized to rely on conventional media sources like local paper for promotion of its sports. Usually these traditional media sources attempt to cover their home group and particular kind of occasions. NASCAR also familiarized from these standard media outlets that sport was tough to cover. Media landscape also changed from traditional to digital landscape. Newspapers failed. NASCAR can deal with its capabilities to get maximum possible take advantage of this new digital landscape. NASCAR have underinvestment in digital resources. So it can capitalize in social and digital media to get its advantages. Digital rights of NASCAR were likewise offered to Turner Sports. NASCAR utilized to make money check of around $15 million each year from Turner Sports. There are variety of cons behind this deal. For example Linking Actions To Profits In Strategic Decision Making Case Study Solution had to get approval from Turner Sport if it wish to produce 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 required to pay licensing charges to Turner Sport, if media sources like newspapers, publications and cable channels desire to publish videos of races on their particular pages. NASCAR can work on conditions and terms and attempt to negotiate with Turner Sports to get maximum advantages of it. Star power plays really important function in producing profits from every sport. It was kept in mind that NASCAR is lagging in this location i.e. star power. For instance when sports fans were asked regarding popular celebs and stars then NASCAR motorist was not discovered even in top twenty responses. So NASCAR can put efforts in this area too for income generation. They need to guide their chauffeurs that how they can end up being sport stars. Four tactical focuses which are created by research team can likewise be worked as chance for NESCAR. These four tactical focuses compares and analysis Linking Actions To Profits In Strategic Decision Making Case Study Analysis techniques.
Dangers
Economic down turn was experienced in late 2000 which can be threat for NASCAR because if there is financial down turn then people would be having less return on financial investment. Economic down turn also results in boost fuel prices which likewise impacted NASCAR. Now if NASCAR make significant financial investments in new sections which are based on brand-new consumers then it might deal with unfavorable comments from its core fan base.
Porter's Five Forces Analysis
Porter's 5 forces is a model that is utilized to analyse industry in which business is working. It helps in determining what are strengths and weakness of any particular industry. It recommend that every industry is various from one another. Because NASCAR's bottom line i.e. net profit is greatly depends on this, it is essential to comprehend market in which company is working. There are 5 forces that are used to determine profitability, strength and attractiveness of Linking Actions To Profits In Strategic Decision Making Case Study Analysis organisation.
Competitive Competition
These motorists can go against NASCAR if they got better chance in terms of rewards and television exposure. If viewers delight in other race cars and chauffeurs more than NASCAR then viewers can shift to those other fascinating automobiles and drivers. NASCAR might be having hazard from its 2 direct competitors that is Solution 1 and Moto GP.
Provider Power
The supplier power suggests the number of providers are readily available in industry and what is the cost connected with provider if company shifts from one provider to another. Because chauffeurs with required resources and abilities are limited, in this industry there is supply monopoly.
Purchaser Power
This force is regarding to clients that is it simple for consumers to move to other items. Then clients are less most likely to change, if there is more changing cost is associated. When it comes to NASCAR customers are its audiences. Audiences can switch to other competitors quickly since viewers will having low changing cost.
Threat of Replacement
Alternatives are referred as alternatives. The substitutes in this case can be other home entertainment implies like audiences can move to other sports. So there are wide range of substitutes are available in this scenario which suggests that risk of alternative is high.
Threat of New Entry
In the case of NASCAR hazard of new entry is low. They require to develop automobiles and racing tracks and also needs to pay large amount to drivers for changing.
PESTEL Analysis
Political
As NASCAR is working in numerous markets so it requires to face various policies. It is likewise kept in mind that NASCAR has actually dealt with increased scrutiny concerning regulative. Every federal government has different priority so NASCAR has to be prepared for it as priority can be shifted to other sector.
Cost-effective
Economic factors includes taxation rate, exchange rate, economic efficiency of that specific business, conditions of labour market, inflation rate and so on. Fortunes of the NASCAR and its rivals can be affected if there is federal government intervention in the marketing and sales sector. NASCAR can leverage abilities of staff members to develop new opportunities and improve existing chances.
Social
Every society is different from each other. Each has different social values and standards. It assists in comprehending relating to society and preference of consumers. Social elements consists of traditions, culture, mindsets towards particular services and products, demographics, norms, interests etc. It can be concluded that advertising through other means instead of conventional (i.e. paper) can be preferred in this society.
Technical
In this case of NASCAR it can be kept in mind that companies are greatly investing for research study and development. NASCAR should also work on its media rights policy with Turner Broadcasting System.
Legal
Legal plays an essential function in every country because every nation has various legal terms and conditions. Linking Actions To Profits In Strategic Decision Making Case Study Help requires to be make certain that they secure their legal rights in every county so any company does not hurt to its legal rights.
Environmental
Environmental elements are also important for each business. Due to the fact that generally governments don't enable those organisation which can damage to environment. These ecological factors includes laws concerning contamination, climate modification, safe waste disposal, policies relating to insurance and so on. NASCAR needs to make sure that its cars are not generating contamination more than appropriate level.
7 P's of Marketing
Product
The products of Linking Actions To Profits In Strategic Decision Making Case Study Analysis in its item portfolio are; racing events tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand name, sanctioning rules for races and ad-space to business marketers during broadcast of NASCAR races. (Hanlon, 2018).
Price.
Pricing method of NASCAR for its race occasions tickets is based upon the venue and importance of the racing events. Along with race occasions tickets, NASCAR likewise charge various service fees to its stakeholders and earns profits. It charged sanctioning charges of $1-2 million per race on average in 2005.
Promotion.
Marketing strategy of NASCAR 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.
Location.
NASCAR have its racing tracks in numerous cities in United States. The most essential tracks of NASCAR consists of Atlanta Motor Speedway in Georgia, Auto Club Speedway in California and Darlington Raceway in South Carolina. It tries to conduct its races in the majority of the cities in United States to comprehend nationwide popularity.
People.
Nestle individuals strategy is comprised of supplying much better experience to its viewers, its fan base and to all of its stakeholders. People are a crucial aspect of Linking Actions To Profits In Strategic Decision Making Case Study Analysis A marketing strategy as its occasions are the source of home entertainment for crowd. Its people strategy consists of efforts to offer much better experience to its Fans, Race Drivers, Team, Occasion Organizers etc., all of which come under individuals method of NASCAR.
Processes.
Numerous organisation processes are required to carry out racing events in an efficient method. These procedures include; correct schedule of time, arrangement for spectators, selling tickets, plan of area for sponsors, managing logistics and so on. These all procedures contribute I developing NASCAR image, improving spectators experience and increasing fan base.
Physical Evidence.
Essential physical proofs for the NASCAR includes the existence of its racing tracks, stock automobiles and racing occasions. Along with it, its merchandising brands consisting of tee shirts, caps, goodies and so on, also function as a physical proof for NASCAR.
Item Life Cycle Evaluation.
The racing occasions by NASCAR was presented on June 19, 1949. At the first stage competition for NASCAR was low, as the competitors drove the cars and trucks similar to the vehicles driven by common individuals.
Development.
The first NASCAR based track, particularly the Darlington Raceway track, was started in 1950 in South Carolina. After the development of racing tracks the company moved towards transmitting its races on television in 1979.
In 1972, William France Jr., became the president of NASCAR and n about 3 years, he changed NASCAR from a regional Sport popular organization into one with worldwide fan base. He started a brand-new age of lucrative sponsorships and tv contracts for NASCAR.
Maturity.
The maturity duration for NASCAR started with the efforts of William France Jr., with the company having wide range of profits sources. The company has about 500 sponsors with broadcasting its events in about 150 nations. The company has large number of tracks in the majority of the cities of United States.
Decrease.
The decrease in the company's offerings began after 2005 with average attendance rate per race decreased by 22% from 2005 to 2010 and television viewership rate declined by 30% from 2005 to 2010. The significant causes of decline include the monetary crisis of 2008, which increased the cost of reaching tracks for audiences due to increasing fuel rates, and the moving of its fan base towards other sports.
Market Division.
The market segmentation of Linking Actions To Profits In Strategic Decision Making Case Study Solution can be divided into 4 segments; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).
Geographical.
The geographical segmentation of Linking Actions To Profits In Strategic Decision Making Case Solution is based upon the geographical existence of its tracks in numerous states and cities in United States, and the television broadcasting of its events in various nations. The business has 23 tracks in about 20 states of America and has television broadcast through numerous Medias i.e. TNT, ESPN, ABC and Fox, in about 150 countries.This vast geographical division supplies the company regional along with global fan base.
Market.
The demographic segmentation of Linking Actions To Profits In Strategic Decision Making Case Study Analysis is also highlydiverse based upon the gender, income and age of the consumer. To increase the market sector of its market NASCAR should modify its marketing strategies to bring in more age groups and lower its costs to go into in the market section with a low average earnings.
Psychographic.
NASCAR has a fan base with a commitment. NASCAR fans perceive it compulsive to purchase tickets and see the races as soon as in a week. NASCAR has attempted to increase the quality of its racing by introducing stage racing, they also have tried to lower prices and make the event more hassle-free by presenting live racing.
Behavioural.
Behavioural division of NASCAR is based upon the behaviour of fans in terms of watching the race live on the tv or by going in the events. Presently, the fans choice is towards watching the race at house on television rather than going, as the consumer experience at NASCAR tracks is not beneficial as well as expensive.
Target Market.
Hispanics.
Among the possible target audience of Linking Actions To Profits In Strategic Decision Making Case Study Analysis was Hispanics; the young and growing population of United States. The market section has terrific possible for NASCAR as the population was growing at a higher rate and it was anticipated to become thrice after forty years and the sector has increasing wealth rate with about $1 trillion of wealth in 2014. The segment reveals affinity with vehicle culture, however need a more focused marketing towards inviting the section towards racing.
Kids.
Kids are likewise one of the prospective target market section for NASCAR, as they are more linked socially than other groups. Cars and truck racing video games developed by Linking Actions To Profits In Strategic Decision Making Case Study Help can be a possible source of gaining attention of kids towards NASCAR track racing. NASCAR needs more attention towards personalizing and improving its digital functions to draw in the kids target market.
Generation Y.
Generation Y target market consists of those who spent five times more resources on discretionary expenditures i.e. purchasing tickets for racing occasions, than others. This huge expense makes the segment potential for NASCAR marketing method of increasing its fan base. The market segment is also easy to method as 81% of the Y Generation customer utilizes Facebook the use and every day is two times of utilizing television and radio. The market sector views sports as a social occasion, rather than adherence to sport. The marketplace section thinks about NASCAR as an organization doing not have in producing a multiculturalism atmosphere. Linking Actions To Profits In Strategic Decision Making Case Study Solution should take different 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 regarding marketing.
Climate/Context.
It requires to make PESTLE analysis in order to comprehend environment or context in which NASCAR is working. PESTLE stands for political, financial, social, technical, environmental and legal and is specified above.
Company.
NASCAR is an auto racing company with having USP of high quality automobile racing with a global structure. Its sector is sports group and events. Its target market is males in the age group of 15-60 years. Business has actually closed business culture and having non-interventionist method.
Partnerships.
Collaborations includes suppliers, suppliers and alliances of NASCAR. NASCAR utilized to get pay check of around $15 million annually from Turner Sports. NASCAR had to get approval from Turner Sport if it want to develop its Facebook page, twitter account or even mobile application.
Customers.
The consumer of Linking Actions To Profits In Strategic Decision Making Case Study Solution 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 produce generational loyalty.
Rivals.
The direct rivals of NASCAR are Formula 1 and Moto GP. Teams typically represents sponsors in NASCAR and the medium of advertising is chauffeurs. Therefore it can be stated that drivers and race automobiles are competitors. If they got better opportunity in terms of prizes and television exposure, these motorists can go against NASCAR.
Marketing Strategies.
1. Keeping and establishing Facebook Page.
One of the potential target markets segments for NASCAR is Hispanics which is the growing population sector of U.S.A. however unfortunately NASCAR had actually been unable to draw in the this targeted segment. It must develop a Facebook page consisting of the information regarding the races and the areas of tracks to make the consumer useful about the core operations of NASCAR.
2. Establishing and Upgrading Accounts of Secret Drivers.
Linking Actions To Profits In Strategic Decision Making Case Study Analysis chauffeurs has a low star power as compare to gamers of other sports. The poor contacts with fans result in less attraction of audiences towards the racers and a low star power. Star power is an important element for drawing in viewers towards tracks and towards television.
3. Developing New Games and improving existing games for kids.
Kids spent the majority of their time on playing video games and utilizing smartphones. Unfortunately, kids playing NASCARA have a worst experience of playing its games. As an outcome, they are less brought in towards the sport. In order to bring in these kids, NASCARA must enhance its current racing video games by presenting modification in the automobiles i.e. changing colours, selection of speed, introducing group racing in the video game, utilizing much better graphics connected to the racing tracks and presenting numerous levels in the game. All these modifications in the existing game would offer better experience to kids.
Along with it, NASCAR must also build new video games associated with racing like kids racing with kids characters as motorists, cartoon racing with racing in between numerous animation characters with an option of selecting the favourite cartoon character for the kids. These methods would make it possible for the business to attract among its potential target segments.
4. Presenting multiculturalism at occasions.
NASCAR events are made up of fans with very few cultural variety, due to expense of arrival in occasions, making it unsightly for the customers perceiving sport events as social events i.e. Generation Y customers. As the Generation Y consumers are a prospective target market for NASCAR, therefore the business should take certain measures to attract this prospective target market.
5. Improving Client Experience at Tracks.
NASCAR should work on facilities and amenities at tracks since on the race day viewers got disappointed. Audiences have numerous expectations from Linking Actions To Profits In Strategic Decision Making Case Study Help due to the fact that in same market other business are offering much better services than NASCAR. IF NASCAR do not work on this concern then its fans may shifted to its rivals.
Marketing Budget plan
Marketing spending plan made on the basis of the above strategies for the duration of 5 years from 2011 to 2015, reveals the expense associated data for the marketing techniques. It can be seen that method 5 of enhancing client experience at tracks would need highest preliminary investment and expense and method 4 of introducing multiculturalism will require most affordable preliminary financial investment with lowest even more per year expense.
NOTE: The worths about expense are presumed on rational basis due the lack of realities and figures associated with cost in the case study. Inflation rate of United States is presumed to be 10%.
Recommendations.
On the basis of deep analysis of the internal and external elements of Linking Actions To Profits In Strategic Decision Making Case Study Analysis causing the decline of television viewership rate and participation rate at tracks, the above marketing methods are advised to NASCAR to increase its fan base in long run. These methods would deal with internal elements like poor consumer experience at tracks, insufficient social networks marketing, incapable digital medias like games, absence of culturalisms at tracks and so on, in addition to with external factors like shifting of fans towards other sports, demographical changes in America and changing family life designs.
