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Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution & Analysis


Introduction

NASCAR (National Association for Stock Vehicle Automobile Racing) is a company performing series of Stock Cars and truck racing in United States and acting as an approving body for driving the guidelines for Stock Car Racing. 2) Stock Car Racing by NASCAR is the second largest viewer sport, with greatest number of sponsors. 1) The other sources of revenue for Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Help includes; 10% of the overall revenue 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 technique. The structure of Automobile of Tomorrow by NASCAR, with an intention of security for the motorists, brought numerous tensions among the stakeholders of the sport.
Executive Summary
The communication audit, carried out in 2010, exposed that in spite of the truth that the business extremely count on the interactions in between its stakeholders, there was no identifiable organisation interaction strategy. The market's target customers, instructions and goals were all unknown.

The audit mentioned different doing not have of NASCAR in terms of absence of internal integration, absence of fan management technique and absence of social and digital media of marketing. The company has complicated ecosystem with independent tracks, chauffeurs and teams. This structure with closed business culture bring various challenges in accelerating a change. Other partners in ecosystem consists of the media networks i.e. tv and radio, and corporate marketers.

Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Help audiences was highly loyal to the sport and the brand names related to the NASCAR, making it appealing for sponsors and corporate online marketers.

Issue Statement.

The company is currently facing the issue of declining rates of presence at racing tracks and rates of tv viewers. This can put a considerable effect on its profits from sponsors, media rights, and from other sources of profits.

Situational Analysis.

The company was quite effective till 2005 with its traditional marketing strategies, however quickly after 2005 the company starts dealing with different problems consisting of decrease of its fan base. Numerous external as well as internal aspects are accountable for the decrease. Internal factors consist of; insufficient investment in social networks and other digital medias of.

Fan base of NASCAR consisted of married males with a typical age of 47, which passes their fandom to their youngsters and create generational loyalty. The household system in America was changing resulting in decrease of impact of married male fan base over their children. Along with it understandings about car was likewise altering with viewing cars and truck a lorry to reach at point B from point A, rather than as a fun project. Other challenges for Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis 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 homes through jumbo turns, Wi-Fi access, etc. These all obstacles were tending the business to revise its marketing techniques.

SWOT Analysis.

Strengths.


In SWOT analysis, strengths defined as business's qualities which are different from its rivals. These are company's core competencies on which company performance or company success based on. Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution core proficiencies includes it has rights of determining guidelines as sanctioning body. Rules and regulations regarding professional stock vehicle racing are dictated by NASCAR like if any group with required abilities and resources can participate in 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 United States. Its races were used to transmit in more than 150 countries around the world with more than $56 million revenues. The main sources of their profits come from tv rights, approving costs, sponsorship and licensing. It has longest season of 10 months and having ownership of three nationwide series i.e. Outdoor camping World Truck Series, the Sprint Cup Series and the Nationwide Series. It has likewise big resource of fans and business sponsors. All the events of NASCAR are sponsored by corporates due to the fact that of biggest brand commitment of fans towards brands promoted by Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution. (See Appendix A).

Weak points.

Weaknesses in SWOT Analysis are thought about as external elements. Weaknesses includes the elements that stops company to carry out at required level of performance. Weaknesses of NASCAR includes its close culture which is non collective. They have non-interventionist approach. They normally used to form guidelines and other needed processes without intervention of others which leads to poor collaboration. For example NASCAR develops Automobile of Tomorrow without cooperation so result is that drivers did not like that principle. As this is racing sport so covering of sports by media is also challenging. It was likewise found that NASCAR had no efficient strategy for service interaction. If it occurred off track, they don't know how to manage issue. Inefficient organisation interaction leads to that they do not have clear instructions for their long term objectives. They don't understand that where they want to see this sport in future.
Porter's 5 Forces Analysis
Opportunities.

NASCAR usually used to rely on conventional media sources like local newspaper for promotion of its sports. NASCAR likewise came to understand from these standard media outlets that sport was tough to cover. When sports fans were asked relating to popular celebrities and stars then NASCAR motorist was not discovered even in leading twenty responses.

Dangers

Economic down turn was experienced in late 2000 which can be risk for NASCAR due to the fact that if there is financial down turn then individuals would be having less return on financial investment. Economic down turn also results in increase fuel prices which also impacted NASCAR. Now if NASCAR make substantial investments in brand-new sectors which are based on new clients then it may face unfavorable remarks from its core fan base.

Porter's 5 Forces Analysis

It is essential to understand market in which business is working since NASCAR's bottom line i.e. net revenue is heavily depends on this. There are 5 forces that are utilized to recognize success, strength and attractiveness of NASCAR company.

Competitive Rivalry

This force shows capability of competitors. Groups usually represents sponsors in NASCAR and the medium of marketing is drivers. It can be stated that drivers and race cars and trucks are competitors. If they got better opportunity in terms of rewards and television direct exposure, these drivers can go against Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis. Then viewers can shift to those other interesting cars and trucks and chauffeurs, if audiences take pleasure in other race cars and trucks and motorists more than NASCAR. NASCAR could be having hazard from its two direct competitors that is Solution 1 and Moto GP. They require to create competitive advantages for motorists so they don't move to other competitors.
Swot Analysis
Provider Power

The provider power shows the variety of providers are available in market and what is the expense related to provider if business shifts from one supplier to another. Since chauffeurs with required skills and resources are restricted, in this industry there is supply monopoly.

Buyer Power

In the case of NASCAR clients are its audiences. Viewers can change to other competitors easily because audiences will having low changing expense.

Risk of Replacement

Substitutes are referred as alternatives. The replacements in this case can be other entertainment means like viewers can shift to other sports. So there are wide range of replacements are available in this scenario which recommends that threat of replacement is high.

Danger of New Entry

In the case of NASCAR danger of new entry is low. They need to construct automobiles and racing tracks and also requires to pay significant quantity to chauffeurs for changing.

PESTEL Analysis

Political


As NASCAR is working in various markets so it needs to face various regulations. It is likewise kept in mind that NASCAR has faced increased examination relating to regulative. Every federal government has various priority so NASCAR has to be prepared for it as priority can be moved to other sector.

Cost-effective

Financial elements includes tax rate, currency exchange rate, financial performance of that particular company, conditions of labour market, inflation rate and so on. If there is federal government intervention in the marketing and sales sector, fortunes of the NASCAR and its rivals can be impacted. NASCAR can take advantage of abilities of workers to produce brand-new chances and improve existing opportunities.

Social

Every society is various from each other. Each has various social worths and norms. It helps in comprehending relating to society and preference of customers. Social aspects consists of traditions, culture, mindsets towards specific product and services, demographics, standards, interests etc. It can be concluded that marketing through other methods rather than traditional (i.e. paper) can be chosen in this society.

Technical

Innovation has impact on almost every organisation. It consists of development in organisation strategy. In this case of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution it can be kept in mind that companies are greatly investing for research and advancement. NASCAR must also deal with its media rights policy with Turner Broadcasting System.

Legal
Vrio Analysis
Legal plays an essential function in every country due to the fact that every nation has different legal terms. Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution needs to be make certain that they safeguard their legal rights in every county so any business does not harm to its legal rights.

Environmental

Environmental elements are also essential for every service. NASCAR needs to make sure that its vehicles are not producing pollution more than acceptable level.

7 P's of Marketing

Product

The items of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution in its item portfolio are; racing occasions tickets, racing tracks, sponsor's marketing, media rights, licencing NASCAR brand name, sanctioning guidelines for races and ad-space to business online marketers throughout broadcast of NASCAR races. (Hanlon, 2018).

Price.

Prices technique of NASCAR for its race occasions tickets is based upon the location and value of the racing events. Together with race events tickets, NASCAR also charge numerous service fees to its stakeholders and earns income. It charged approving fees of $1-2 million per race on average in 2005.

Promo.

Promotional technique of NASCAR is extremely based upon its fan base. A strong fan base share its fandom with others and increase the number of audiences for NASCAR races.

Place.

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 tries to perform its races in the majority of the cities in United States to understand nationwide appeal.

People.

Nestle people technique is comprised of providing better experience to its viewers, its fan base and to all of its stakeholders. People are an important element of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis A marketing strategy as its occasions are the source of entertainment for crowd. Its individuals strategy consists of efforts to offer better experience to its Fans, Race Drivers, Team, Event Organizers and so on, all of which come under individuals method of NASCAR.

Procedures.

Several company processes are needed to carry out racing events in an effective method. These processes consist of; correct schedule of time, arrangement for spectators, offering tickets, arrangement of area for sponsors, handling logistics etc. These all procedures contribute I constructing NASCAR image, improving spectators experience and increasing fan base.

Physical Proof.

Crucial physical proofs for the NASCAR consists of the presence of its racing tracks, stock vehicles and racing events. Together with it, its merchandising brand names including tee shirts, caps, goodies etc., also serve as a physical proof for NASCAR.

Item Life Process Assessment.

The racing events by NASCAR was introduced on June 19, 1949. At the very first phase competitors for NASCAR was low, as the competitors drove the cars similar to the cars driven by normal people.

Growth.

The first NASCAR based track, namely the Darlington Raceway track, was started in 1950 in South Carolina. After the development of racing tracks the business moved towards broadcasting its races on television in 1979.

In 1972, William France Jr., became the president of NASCAR and n about 3 decades, he changed NASCAR from a local Sport popular organization into one with worldwide fan base. He initiated a brand-new era of financially rewarding sponsorships and television agreements for NASCAR.

Maturity.

The maturity duration for NASCAR began with the efforts of William France Jr., with the company having large range of profits sources. The business has about 500 sponsors with transmitting its occasions in about 150 countries. The company has large number of tracks in the majority of the cities of United States.

Decrease.

The significant causes of decrease include the monetary crisis of 2008, which increased the cost of showing up at tracks for audiences due to increasing fuel costs, and the moving of its fan base towards other sports.

Market Division.

The marketplace segmentation of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Help can be divided into 4 segments; Geographic, Demographic, Psychographic and Behavioural. (Dutta, 2018).

Geographical.

The geographical division of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Help is based upon the geographical presence of its tracks in numerous states and cities in United States, and the television broadcasting of its occasions in various nations. The business 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 large geographical division supplies the business local in addition to global fan base.

Market.

The demographic segmentation of NASCAR is also highlydiverse based upon the gender, earnings and age of the consumer. Its current fan base is majorly comprised of male married fans with an average age of 47 years and an income around $30-50 thousands. Currently NASCAR is trying to increase its target market to the young growing population and kinds. To increase the demographic segment of its market NASCAR ought to revise its marketing methods to attract more age and lower its costs to go into in the market segment with a low typical income.( htt1).

Psychographic.

NASCAR has a fan base with a commitment. NASCAR fans view it compulsive to buy tickets and see the races once in a week. NASCAR has attempted to increase the quality of its racing by introducing phase racing, they also have actually tried to lower rates and make the occasion more convenient by introducing live racing.

Behavioural.

Behavioural segmentation of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Help is based upon the behaviour of fans in terms of seeing the race reside on the tv or by entering the events. Currently, the fans preference is towards seeing the race at home on tv instead of going, as the consumer experience at NASCAR tracks is not beneficial along with costly. This preference makes the rates for presence lower than the rates for television audiences. NASCAR has to alter the behaviour of its fan base by introducing qualitative services at its tracks.

Target audience.

Hispanics.

Among the possible target audience of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution was Hispanics; the young and growing population of United States. The marketplace sector has fantastic potential for NASCAR as the population was growing at a greater 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. Although, the section shows affinity with vehicle culture, but need a more concentrated marketing towards inviting the section towards racing.

Kids.

Kids are likewise among the possible target market segment for NASCAR, as they are more connected socially than other groups. Producing fan base amongst kids can offer a potential increase in the variety of fans for racing due to their connection. Kids spend most of their times in playing and utilizing smartphones video games. Automobile racing games established by Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Help can be a prospective source of getting attention of kids towards NASCAR track racing. NASCAR's digital features related to kids are not capable of gaining the attention. NASCAR requires more attention towards tailoring and improving its digital features to attract the kids target market.

Generation Y.
Generation Y target market includes those who invested 5 times more resources on discretionary expenses i.e. buying tickets for racing occasions, than others. This huge expense makes the segment potential for NASCAR marketing strategy of increasing its fan base. The market segment is also easy to approach as 81% of the Y Generation customer uses Facebook the use and every day is two times of using tv and radio. The marketplace sector views sports as a social occasion, instead of adherence to sport. The marketplace section thinks about NASCAR as an organization lacking in producing a multiculturalism atmosphere. Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis should take different steps to enhance the experience of Generation Y consumers in its occasions.

5 C's of Marketing

5 C's of marketing helps 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, ecological and legal and is mentioned above.

Business.

NASCAR is a car racing company with having USP of high quality car racing with an international structure. Its sector is sports group and events. Its target market is males in the age of 15-60 years. Company has closed business culture and having non-interventionist technique.

Cooperations.

Collaborations consists of distributors, providers and alliances of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis. It is teamed up with various racing groups which are participating in racing. It likewise collaborated with Turners Sport for digital rights. NASCAR used to earn money check of around $15 million yearly from Turner Sports. There are number of cons behind this offer. For instance NASCAR needed to get approval from Turner Sport if it want to produce its Facebook page, twitter account or even mobile application. Turner Sport likewise had rights of every single video which is shoot during race at track.

Customers.

The client of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis are its audiences. They target clients 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 children and develop generational commitment.

Competitors.

The direct rivals of NASCAR are Formula 1 and Moto GP. Teams usually represents sponsors in NASCAR and the medium of marketing is chauffeurs. It can be said that chauffeurs and race cars are competitors. These drivers can go against Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution if they got better chance in terms of rewards and tv direct exposure.

Marketing Techniques.

1. Developing and Maintaining Facebook Page.
One of the prospective target markets sections for NASCAR is Hispanics which is the growing population section of USA however unfortunately NASCAR had been unable to attract the this targeted section. In order to attract the young growing generation the NASCAR should market by utilizing social networks like Facebook. It needs to develop a Facebook page containing the information relating to the races and the areas of tracks to make the customer informative about the core operations of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Solution. It ought to likewise update its Facebook page on daily basis to offer info about its upcoming events. This would make the target market segment more helpful about the business and would result in drawing in big fans base.
2. Developing and Updating Accounts of Secret Drivers.
NASCAR chauffeurs has a low star power as compare to gamers of other sports. Its ranks 7th in terms of star power (see Case Display). The major reason behind it is that, the racers mainly play in teams and are not able to build a key account and preserve a close contact with fans. 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 element for drawing in viewers towards tracks and towards tv. The star power for the chauffeurs at NASCARA could be improved by developing and updating accounts of essential motorists by NASCARA itself. This would remove the requirement of forcing chauffeurs to preserve their accounts and would lead to increasing fans attention towards NASCARA chauffeurs.
3. Developing New Games and improving current games for kids.
Kids spent the majority of their time on playing video games and utilizing smartphones. Sadly, kids playing NASCARA have a worst experience of playing its games. As a result, they are less attracted towards the sport. In order to attract these kids, NASCARA should improve its existing racing games by introducing customization in the cars and trucks i.e. altering colours, choice of speed, introducing group racing in the game, utilizing better graphics associated with the racing tracks and presenting different levels in the video game. All these adjustments in the current game would offer much better experience to kids.
Along with it, NASCAR should likewise build new video games connected to racing like kids racing with kids characters as drivers, cartoon racing with racing between numerous cartoon characters with a choice of choosing the favourite animation character for the kids. These strategies would make it possible for the company to attract among its possible target segments.
4. Presenting multiculturalism at occasions.
NASCAR occasions are made up of fans with very few cultural diversity, due to cost of arrival in events, making it unattractive for the consumers viewing sport events as social events i.e. Generation Y customers. As the Generation Y clients are a potential target market for NASCAR, therefore the company must take particular measures to attract this possible target market.
5. Improving Customer Experience at Tracks.
Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Analysis must work on facilities and amenities at tracks since on the race day audiences got dissatisfied. Audiences have lots of expectations from NASCAR since in exact same market other business are providing much better services than NASCAR. IF NASCAR don't work on this problem then its fans might shifted to its competitors. According to fans there were not adequate centers were available as compare to other sports companies. NASCAR ought to make sure that it provide adequate centers that consists of cleaned washrooms, comfortable seating arrangement. They need to likewise provide WIFI services and ease of access of credit cards throughout that track. It needs to be likewise make certain that there are enough jumbo turns placed at all required locations. There need to be also food stalls that provide quality food to audiences. In this way viewers 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 duration of 5 years from 2011 to 2015, shows the expense related data for the marketing strategies. It can be seen that method 5 of enhancing customer experience at tracks would need highest initial investment and expense and method 4 of presenting multiculturalism will require most affordable preliminary investment with most affordable even more per year cost.
KEEP IN MIND: The worths about expense are presumed on rational basis due the lack of realities and figures related to cost in the case research study. Inflation rate of United States is presumed to be 10%.

Suggestions.
Recommendations
On the basis of deep analysis of the external and internal elements of Valuing The Option Component Of Debt And Its Relevance To Dcf Based Valuation Methods Case Study Help causing the decrease of tv viewership rate and attendance rate at tracks, the above marketing techniques are advised to NASCAR to increase its fan base in long run. These methods would handle internal factors like poor customer experience at tracks, inadequate social media marketing, incapable digital medias like 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 domesticity designs.