Race Track Business Plan Harvard Case Solution & Analysis

Industry and Competitor Analysis

The National Hot Rod Association (NHRA) supervises the majority if drag racing events in North America. The next largest organization is the International Hot Rod Association (IHRA). All the race tracks are associated with any one sanctioning body or the other.

There are also small organizations for muscle cars and nostalgia vehicles such as Nostalgia Drag Racing League (NDRL).The National Electric Drag Racing Association (NEDRA) races electric vehicles against high performance gasoline-powered vehicles such as Dodge Vipers or classic muscle cars in 1/4 and 1/8 mile (400m   200m) races.

The Racing Industry has risenover the past five years in the United States of America. With a vast increase in media exposure to meet the demands of die hard sports fans, the industry has continually grown in popularity. The industry's continued resurgence is attributable not only to recovering levels of consumer spending, but also through the industry's recent attempts at expanding its event coverage(Racing & Individual Sports in the US: Market Research Report, n.d.).

The racing industry in the United States of America earns $19.5 billion in sales revenue. The share of Oval tracks, Motorsport Engineering, Drag Racing, Road Racing, Off Road, Karting and Auto cross accounts for 45%, 30%, 12%, 7%, 4%, 1%, and 1% respectively. The graph below shows the following: (Market Demographics, n.d.)

People who compete in auto races around the United States of America exceed 451,000 people in 1300 race tracks around the country. Most of the people compete in Drag Racing, which values up to 155,000.

(Market Demographics, n.d.)

Market Trends

The market for drag race has changed over the years. In the past, racers used to race two to three times per week but they have now become selective in the about the events they would compete. They consider factors such as fuel and payouts. Social media is playing a big role in attracting fans to the drag race tracks and companies are trying to capitalize this opportunity. National Hot Rod Association drag racing has surpassed 500,000 fans on Facebook and topped 50,000 followers on twitter(Drag Race Market Dialed in for 2014, n.d.).

It has now important in the market to convey the message appropriately. In this case, the market has moved towards social media to achieve the purpose. The biggest advantage of the social media is that fans sitting at their homes can watch the racing. Overall, the economy has picked up in the United States of America and fans want are returning to watch these races.

Competitor Analysis

As the drag race track, the company will get associated with NHRA. There are many competitors of NHRA which can pose threats for the revenue of this race track. The competitors include other associations such as NASCAR, Champ Car, Formula One, Indy Racing League, Sports Car Club of America, Grand American Road Racing Association, International Race of Champions, ARCA Racing Series, NHRA Drag Racing, National Auto Sport Association, NASA Pro Truck, U.S. Touring Car Championship, and NASA Formula TR Series. There are 1300 racing tracks in the United States and 30 race tracks in Washington alone where this new infrastructure would exist. The information related to some competitors is given below:(Racing “101”: Local & Global Racing Organizations Washington State / United States / International, n.d.)

NASCAR

It is an economic giant and races are held throughout the year. It is the most renowned organization in the racing industry. Attendance has doubled since 1990 and more than 6.5 million people watched individual Cup races there. According to a study, 64% of NASCAR fans have attended college while 70 percent uses the internet and 41% earns more than $ 50,000 annually.(Racing “101”: Local & Global Racing Organizations Washington State / United States / International, n.d.)

Race Track Business Plan Case Solution

Formula 1

            Formula One racing circuit has nearly 25 drivers and race contests are held around the world including the United States of America. The formula one car is low to the ground and it has a wing back. The sponsors of Formula One includes Honda, Marlboro, Mild Seven, BMW, Mercedes, Red Bull, Toyota, and others.It is also a famous brand of racing, with its unique venues, non-oval tracks, and worldwide involvement, providing enjoyable experience to the visitors(Racing “101”: Local & Global Racing Organizations Washington State / United States / International, n.d.).....................

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