Note On Valuation Of Venture Capital Deals Case Study Solution & Analysis
Intro
NASCAR (National Association for Stock Vehicle Car Racing) is an organization conducting series of Stock Car racing in United States and acting as an approving body for driving the rules for Stock Automobile Racing. 2) Stock Car Racing by NASCAR is the 2nd biggest viewer sport, with highest number of sponsors. 1) The other sources of income for Note On Valuation Of Venture Capital Deals Case Study Analysis includes; 10% of the total earnings from tv rights, sanctioning fees i.e. $1-2 million per race, and licencing NASCAR brand to business.
NASCAR has a closed business culture with the non-interventionist approach. The building of Car of Tomorrow by NASCAR, with an objective of safety for the drivers, brought various stress among the stakeholders of the sport.
The communication audit, carried out in 2010, revealed that regardless of the truth that the business extremely rely on the interactions between its stakeholders, there was no recognizable business interaction method. The industry's target customers, direction and objectives were all unknown.
The audit mentioned various doing not have of NASCAR in regards to lack of internal combination, absence of fan management strategy and lack of digital and social media of marketing. The business has complex ecosystem with independent tracks, groups and drivers. This structure with closed business culture bring various challenges in speeding up a modification. Other partners in ecosystem consists of the media networks i.e. tv and radio, and business marketers.
Note On Valuation Of Venture Capital Deals Case Study Analysis audiences was extremely faithful to the sport and the brands connected with the NASCAR, making it appealing for sponsors and business marketers.
Issue Declaration.
The company is presently facing the issue of declining rates of attendance at racing tracks and rates of tv audiences. This can put a substantial effect on its earnings from sponsors, media rights, and from other sources of profits.
Situational Analysis.
Although the company was rather effective till 2005 with its standard marketing strategies, but soon after 2005 the company starts facing different problems including decrease of its fan base. A number of external in addition to internal factors are accountable for the decrease. Internal aspects consist of; insufficient investment in social media and other digital medias of.
Fan base of NASCAR made up of married males with an average age of 47, which passes their fandom to their children and produce generational commitment. Other difficulties for NASCAR includes 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.
SWOT Analysis.
Strengths.
In SWOT analysis, strengths specified as business's qualities which are various from its competitors. These are company's core competencies on which business efficiency or business success based on. Note On Valuation Of Venture Capital Deals Case Study Solution core proficiencies includes it has rights of determining guidelines as approving body. Rules and regulations relating to professional stock automobile racing are dictated by NASCAR like if any group with required abilities and resources can enter into races by following rules and regulations determined by NASCAR. NASCAR has monopoly it this aspect. 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 used to transmit in more than 150 nations worldwide with more than $56 million profits. The primary sources of their earnings come from television rights, sanctioning fees, sponsorship and licensing. It has longest season of 10 months and having ownership of 3 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. All the occasions of NASCAR are sponsored by corporates because of biggest brand name loyalty of fans toward brand names marketed by Note On Valuation Of Venture Capital Deals Case Study Solution. (See Appendix A).
Weak points.
Weaknesses in SWOT Analysis are considered as external aspects. Weak points includes the elements that stops company to perform at required level of efficiency. Weaknesses of NASCAR includes its close culture which is non collective. They have non-interventionist technique. They generally utilized to form guidelines and other required procedures without intervention of others which leads to bad collaboration. For example NASCAR develops Automobile of Tomorrow without partnership so result is that motorists did not like that principle. As this is racing sport so covering of sports by media is likewise difficult. It was likewise discovered that NASCAR had no reliable technique for business communication. They do not understand how to handle issue if it took place off track. Ineffective company interaction leads to that they don't have clear direction for their long term goals. They don't know that where they wish to see this sport in future.
Opportunities.
NASCAR usually utilized to rely on traditional media sources like regional paper for promotion of its sports. NASCAR also came to understand from these traditional media outlets that sport was challenging to cover. When sports fans were asked concerning popular celebs and stars then NASCAR chauffeur was not discovered even in leading twenty actions.
Hazards
Economic down turn was experienced in late 2000 which can be hazard for NASCAR due to the fact that if there is economic down turn then individuals would be having less return on investment. Economic down turn also results in increase fuel costs which also impacted NASCAR. Now if NASCAR make considerable investments in new segments which are based on new customers then it might face negative remarks from its core fan base.
Porter's Five Forces Analysis
Porter's 5 forces is a model that is used to evaluate industry in which company is working. It helps in identifying what are strengths and weak point of any particular market. It suggest that every market is different from one another. It is necessary to understand market in which business is working because NASCAR's bottom line i.e. net profit is heavily depends upon this. There are 5 forces that are used to determine profitability, strength and attractiveness of Note On Valuation Of Venture Capital Deals Case Study Help business.
Competitive Competition
This force shows ability of competitors. Groups generally represents sponsors in NASCAR and the medium of advertising is motorists. For that reason it can be stated that drivers and race cars and trucks are rivals. These motorists can break NASCAR if they improved opportunity in terms of prizes and television exposure. If viewers take pleasure in other race cars and trucks and chauffeurs more than NASCAR then audiences can move to those other fascinating vehicles and drivers. NASCAR could be having threat from its 2 direct competitors that is Formula 1 and Moto GP. They require to develop competitive benefits for chauffeurs so they don't shift to other competitors.
Supplier Power
If company shifts from one provider to another, the provider power indicates the number of suppliers are offered in market and what is the cost associated with supplier. In this industry there is supply monopoly since motorists with required resources and skills are limited.
Purchaser Power
In the case of NASCAR clients are its viewers. Viewers can switch to other rivals quickly because audiences will having low switching cost.
Danger of Substitution
Replacements are referred as options. The alternatives in this case can be other home entertainment suggests like viewers can move to other sports. There are broad variety of alternatives are available in this scenario which recommends that hazard of alternative is high.
Threat of New Entry
It is specified as how it is easy for any business to enter in that particular market. When it comes to Note On Valuation Of Venture Capital Deals Case Study Help threat of new entry is low. If any business needs to go into in this company than they have to make heavy investments, due to the fact that. They need to construct vehicles and racing tracks and also needs to pay significant amount to motorists for switching.
PESTEL Analysis
Political
As NASCAR is working in various markets so it requires to face different guidelines. It is likewise noted that NASCAR has dealt with increased scrutiny relating to regulatory. Every government has different priority so NASCAR has actually to be prepared for it as concern can be shifted to other sector.
Cost-effective
Economic aspects includes tax rate, currency exchange rate, financial performance of that specific business, 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 rivals can be impacted. NASCAR can take advantage of abilities of workers to create brand-new opportunities and enhance existing opportunities.
Social
Each has different social worths and standards. It helps in comprehending relating to society and choice of clients.
Technical
In this case of NASCAR it can be noted that business are heavily spending for research study and advancement. NASCAR ought to also work on its media rights policy with Turner Broadcasting System.
Legal
Because every country has various legal terms and conditions, Legal plays a crucial role in every nation. Note On Valuation Of Venture Capital Deals Case Study Help needs to be make sure that they protect their legal rights in every county so any company does not hurt to its legal rights.
Environmental
Ecological factors are also important for every service. Because usually governments don't permit those company which can harm to environment. These environmental elements includes laws concerning contamination, climate change, safe waste disposal, policies relating to insurance coverage etc. NASCAR requires to make certain that its cars and trucks are not generating contamination more than acceptable level.
7 P's of Marketing
Product
The products of Note On Valuation Of Venture Capital Deals Case Study Solution in its item portfolio are; racing occasions tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand name, approving guidelines for races and ad-space to business marketers during broadcast of NASCAR races. (Hanlon, 2018).
Price.
Rates strategy of NASCAR for its race events tickets is based upon the venue and importance of the racing events. Together with race occasions tickets, NASCAR likewise charge various service charge to its stakeholders and earns profits. For instance it charged sanctioning fees of $1-2 million per race usually in 2005.
Promo.
Marketing technique of Note On Valuation Of Venture Capital Deals Case Study Help is highly based upon its fan base. A strong fan base share its fandom with others and increase the variety of audiences for NASCAR races. The company is not totally relied upon its fan base for its promo and promote through regional radio stations too. The business has actually also adopted the merchandising media of promo, in which the business offers merchandises with its logo.
Location.
NASCAR have its racing tracks in various cities in United States. The most crucial tracks of NASCAR consists of Atlanta Motor Speedway in Georgia, Auto Club Speedway in California and Darlington Raceway in South Carolina. It tries to perform its races in the majority of the cities in United States to grasp nationwide appeal.
People.
Nestle people strategy is consisted of providing much better experience to its viewers, its fan base and to all of its stakeholders. Individuals are a crucial element of Note On Valuation Of Venture Capital Deals Case Study Analysis A marketing technique as its events are the source of home entertainment for crowd. Its people method consists of efforts to offer better experience to its Fans, Race Drivers, Team, Event Organizers etc., all of which come under individuals technique of NASCAR.
Procedures.
Numerous company procedures are needed to carry out racing events in an effective way. These procedures consist of; proper schedule of time, arrangement for spectators, offering tickets, arrangement of area for sponsors, handling logistics and so on. These all procedures contribute I building NASCAR image, improving viewers experience and increasing fan base.
Physical Evidence.
Crucial physical evidences for the NASCAR consists of the presence of its racing tracks, stock automobiles and racing occasions. Along with it, its retailing brands including tee shirts, caps, goodies and so on, likewise function as a physical proof for NASCAR.
Product Life Process Evaluation.
The racing events by NASCAR was introduced on June 19, 1949. At the first phase competitors for NASCAR was low, as the competitors drove the automobiles similar to the automobiles driven by normal people.
Development.
The first NASCAR based track, namely the Darlington Raceway track, was started in 1950 in South Carolina. After the growth of racing tracks the business moved towards broadcasting its races on television in 1979.
In 1972, William France Jr., ended up being the president of NASCAR and n about 3 decades, he changed NASCAR from a local Sport popular organization into one with global fan base. He started a new period of financially rewarding sponsorships and television agreements for NASCAR.
Maturity.
The maturity period for NASCAR started with the efforts of William France Jr., with the company having wide variety of revenue sources. The business has about 500 sponsors with broadcasting its occasions in about 150 nations. The business has large number of tracks in most of the cities of United States.
Decline.
The decrease in the business's offerings began after 2005 with average attendance rate per race declined by 22% from 2005 to 2010 and tv viewership rate decreased by 30% from 2005 to 2010. The major reasons for decrease consist of the monetary crisis of 2008, which increased the cost of reaching tracks for audiences due to increasing fuel costs, and the moving of its fan base towards other sports.
Market Segmentation.
The marketplace division of Note On Valuation Of Venture Capital Deals Case Study Solution can be divided into four segments; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).
Geographical.
The geographical division of Note On Valuation Of Venture Capital Deals Case Help is based upon the geographical existence of its tracks in various states and cities in United States, and the tv broadcasting of its events in numerous countries. The business 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 huge geographical division supplies the business local along with international fan base.
Demographic.
The demographic segmentation of Note On Valuation Of Venture Capital Deals Case Study Analysis is likewise highlydiverse based upon the gender, income and age of the customer. To increase the group section of its market NASCAR must revise its marketing techniques to draw in more age groups and lower its costs to go into in the market sector with a low typical earnings.
Psychographic.
The mental characteristics of the majority of the fans are quite comparable. NASCAR has a fan base with a commitment. As soon as in a week, NASCAR fans view it compulsive to buy tickets and see the races. 71% of them choose to buy products with a NASCAR brand name. They are rather extrovert and want to join other fans while racing. They desire quality racing with low cost at convenient area. Although Note On Valuation Of Venture Capital Deals Case Study Help has actually attempted to increase the quality of its racing by introducing stage racing, they also have tried to lower rates and make the event more convenient by introducing live racing.
Behavioural.
Behavioural segmentation of Note On Valuation Of Venture Capital Deals Case Study Solution is based upon the behaviour of fans in regards to viewing the race live on the television or by entering the events. Currently, the fans choice is towards viewing the race at home on television instead of going, as the client experience at NASCAR tracks is not favourable in addition to pricey. This preference makes the rates for participation lower than the rates for television audiences. NASCAR has to alter the behaviour of its fan base by presenting qualitative services at its tracks.
Target Market.
Hispanics.
One of the prospective target audience of Note On Valuation Of Venture Capital Deals Case Study Solution was Hispanics; the young and growing population of United States. The marketplace section has great potential for NASCAR as the population was growing at a greater rate and it was anticipated to end up being thrice after forty years and the segment has increasing wealth rate with about $1 trillion of wealth in 2014. The segment reveals affinity with automobile culture, but need a more concentrated marketing towards welcoming the section towards racing.
Kids.
Kids are likewise among the possible target market section for NASCAR, as they are more connected socially than other groups. Developing fan base among kids can supply a prospective increase in the number of fans for racing due to their connection. Kids spend the majority of their times in playing and utilizing smart devices video games. Automobile racing video games established by Note On Valuation Of Venture Capital Deals Case Study Analysis can be a possible source of getting attention of kids towards NASCAR track racing. NASCAR's digital functions related to kids are not capable of getting the attention. NASCAR needs more attention towards customizing and improving its digital features to bring in the kids target market.
This huge expenditure makes the section potential for NASCAR marketing technique of increasing its fan base. The market section considers NASCAR as an organization doing not have in developing a multiculturalism atmosphere. NASCAR ought 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 helps in taking choices regarding marketing.
Climate/Context.
It needs to make PESTLE analysis in order to comprehend climate or context in which NASCAR is working. PESTLE represents political, economic, social, technical, legal and environmental and is specified above.
Company.
Note On Valuation Of Venture Capital Deals Case Study Help is an automobile racing company with having USP of high quality vehicle racing with a worldwide structure. Its sector is sports group and events.
Cooperations.
Collaborations consists of distributors, suppliers and alliances of NASCAR. NASCAR utilized to get pay check of around $15 million yearly from Turner Sports. NASCAR had to get approval from Turner Sport if it want to produce its Facebook page, twitter account or even mobile application.
Customers.
The consumer of Note On Valuation Of Venture Capital Deals Case Study Help are its audiences. They target clients 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. Groups typically represents sponsors in NASCAR and the medium of advertising is motorists. It can be said that drivers and race cars are rivals. If they got better chance in terms of prizes and television direct exposure, these drivers can go against NASCAR.
Marketing Techniques.
1. Preserving and developing Facebook Page.
One of the possible target audience sectors for NASCAR is Hispanics which is the growing population sector of USA but regrettably NASCAR had been not able to bring in the this targeted sector. In order to attract the young growing generation the NASCAR should market by using social networks like Facebook. It needs to establish a Facebook page including the details regarding the races and the areas of tracks to make the customer useful about the core operations of Note On Valuation Of Venture Capital Deals Case Study Solution. It needs to likewise upgrade its Facebook page on day-to-day basis to provide info about its upcoming events. This would make the target market section more helpful about business and would lead to attracting large fans base.
2. Establishing and Upgrading Accounts of Secret Drivers.
Note On Valuation Of Venture Capital Deals Case Study Analysis motorists has a low star power as compare to gamers of other sports. The bad contacts with fans result in less tourist attraction of audiences towards the racers and a low star power. Star power is an important factor for bring in viewers towards tracks and towards tv.
3. Developing New Games and improving current games for kids.
Kids spent most of their time on playing games and utilizing mobile phones. Unfortunately, kids playing NASCARA have a worst experience of playing its video games. As a result, they are less drawn in towards the sport. In order to bring in these kids, NASCARA needs to enhance its present racing games by presenting modification in the automobiles i.e. altering colours, selection of speed, presenting group racing in the game, utilizing better graphics associated with the racing tracks and introducing various levels in the video game. All these modifications in the existing video game would offer much better experience to kids.
In addition to it, NASCAR ought to likewise build brand-new video games related to racing like kids racing with kids characters as drivers, cartoon racing with racing in between different cartoon characters with an option of choosing the favourite cartoon character for the kids. These techniques would make it possible for the business to draw in one of its prospective target sectors.
4. Introducing multiculturalism at occasions.
NASCAR events are comprised of fans with very few cultural variety, due to expense of arrival in occasions, making it unattractive for the consumers viewing sport events as social celebrations i.e. Generation Y clients. As the Generation Y clients are a potential target market for NASCAR, therefore the company needs to take specific steps to attract this potential target market.
5. Improving Consumer Experience at Tracks.
Since on the race day audiences got dissatisfied, NASCAR must work on facilities and amenities at tracks. Viewers have many expectations from NASCAR since in very same market other business are supplying much better services than NASCAR. IF NASCAR do not deal with this problem then its fans may shifted to its competitors. According to fans there were not adequate centers were readily available as compare to other sports service providers. So NASCAR must make certain that it offer sufficient centers that consists of cleaned up restrooms, comfortable seating arrangement. They ought to also offer WIFI services and ease of access of charge card throughout that track. It ought to be likewise make certain that there suffice jumbo turns placed at all required locations. There should be likewise food stalls that provide quality food to viewers. In this way audiences will be having pleasant experience at the day of event. (See Appendix B).
Marketing Budget plan
Marketing spending plan made on the basis of the above techniques for the period of 5 years from 2011 to 2015, reveals the expense associated information for the marketing strategies. It can be seen that strategy 5 of enhancing consumer experience at tracks would require highest preliminary investment and expense and method 4 of introducing multiculturalism will need most affordable initial investment with least expensive further per year cost.
KEEP IN MIND: The worths about cost are assumed on rational basis due the absence of figures and facts related to cost in the event study. Inflation rate of United States is presumed to be 10%.
Recommendations.
On the basis of deep analysis of the internal and external factors of Note On Valuation Of Venture Capital Deals Case Study Solution triggering the decline of tv viewership rate and participation rate at tracks, the above marketing methods are advised to NASCAR to increase its fan base in long run. These techniques would deal with internal factors like poor customer experience at tracks, inadequate social media marketing, incapable digital medias like games, lack of culturalisms at tracks etc., along with with external elements like moving of fans towards other sports, demographical changes in America and changing family life styles.
