Nascar Case
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Problem Statement
In recent years auto racing has emerged as a growing industry with many sponsors and loyal fans. There are four main types of auto racing including CART, IRL, Formula 1, and NASCAR. Created in the late 1970’s CART (Championship Auto Racing Teams) busted on the scene and quickly became a dominant force in the auto racing industry. Cart acquired many famous drivers as well as established well known sponsors such as Honda and Toyota. Recently CART has run into financial problems due to its lack of focus and they have become near extinction in the eyes of racing fans. Their problem stems from low television exposure, NASCAR’s recent popularity, loss of owners, and the departure of key partners.
Key Drivers of Change in the Industry
In the beginning many fans enjoyed auto racing for its speed and professional driving abilities. Here in recent years auto racing has become a billion dollar industry providing entertainment for people all over the country through cable television. One of the main reasons for this change in the auto racing industry’s notoriety is the popularity of NASCAR. Fans of NASCAR enjoy the predominantly oval tracks, as oppose to road tracks, and the many famous personalities of NASCAR’s premier drivers. NASCAR has changed the industry by locking in big sponsor deals with many fortune 500 companies and also receiving muti-billion dollar contracts with television networks. By getting plenty of exposure on television channels auto racing has become a well noticeable entity that continues to grow and show no signs of stopping.
Competitor Strength Assessment
There are three competitor’s to the CART open-wheel racing, the major one being the Indy Racing League (IRL). Tony George, President of Indianapolis Motor Speedway, thought that CART was getting away from its American fan base and took manners into his own hands by separating itself from CART. IRL split from CART in 1994 taking some highly recognizable drivers, sponsors, exposure, and fans with them. With IRL’s strong brand name of “Indy Cars” and it’s sponsorships through the Indy 500 they have gained a huge strength advantage. Formula 1 racing is another key competitor in the auto racing industry. It’s main strength is in its global appeal whereby the winner of its Formula 1 series wears the title of ”World F1 Driving Champion”. NASCAR’s strength lies in its huge fan base as well as sponsorships and familiar race car drivers.
Key Factors of Competitor Success in the Industry
To be successful in this industry one must be able to reach their audience. NASCAR gained its dominance by focusing on television to give them exposure to many racing fans across the country. By successfully getting television networks to broadcast their racing events they have climbed to the top of fans awareness of auto racing. Having sponsors to promote your league is also a key driver of success. Companies realized that putting their brand name on race cars aids their advertising efforts. Other sponsors of engine parts to race cars helps to cut cost and increase revenue for all racing leagues involved.
Recommended Strategy and Justification
If I was on the marketing team for CART I would advise them to differentiate themselves from their competitors. Being that NASCAR has a sizable market share of the oval tracks in the auto racing industry it would be best for CART to put emphasis on its road courses. Road courses involves high speed and excellent driving capabilities.