Challenges That Steriline Racing Faces - Case Study Example

Executive Summary Steriline Racing has been able to grow their business by being able to target the correct customer and developing services which matches the requirements of customers. This report presents the manner in which Steriline Racing has been able to segment the market and target the upper middle class based on the market segmentation. Steriline Racing in this report also looks to expand its business overseas and looks towards exploring other countries. It has identified India, China and Brazil as the possible destination and out of the three India seems to be the best one due to the growing business opportunity. This has helped to identify the franchise model which Steriline Racing looks towards using so that they are able to grow and ensure growth in business. This report also presents the challenges that Steriline Racing faces and the manner in which it will be able to ensure growth in business by developing their business Table of Contents Introduction 3 About Steriline Racing 3 Market Segment 3 Target Market 4 PESTEL Analysis 5 Potential Destination for Steriline Racing 7 First Choice for International Business 7 Challenges in introducing the service 8 Strategy to Enter the Market 8 Recommendations 9 Conclusion 9 References 10 Introduction Businesses all around the world are looking towards increasing their reach by having businesses abroad so tha the business is able to have a route through which it can earn continuous revenues. Steriline Racing which performs in the service sector has looked towards ensuring that they develop their business through a process which helps them to earn regular income. This report looks into the market segment and target audience being eyed by Steriline Racing. The report also presents the manner in which the company looks to expand its market by having business overseas and identifying the potential market. The report also look to identify the mode of entry and the challenges that will face and the manner in which Steriline Racing will be able to deal with it to ensure effective results. About Steriline Racing Steriline Racing is one of the renowned and well known race courses in the world which has its establishment in Australia (Steriline Racing, 2011). Steriline Racing is an establishment of small regional clubs which looks to enhance the pleasure for people by having them provides an opportunity to bid on horses (Steriline Racing, 2011). Steriline Racing has a presence in over 47 countries and has been able to sustain its business by ensuring safety, and quality in service. Market Segment Steriline Racing has looked towards identifying the market segment based on various parameters that the company is eying at. Understanding the market segmentation helps to identify the target market better and the marketing strategy that the business intends to use so that they are able to ensure higher customer satisfaction. The market segmentation for Steriline Racing based on geographic, social economic status, demographic and psychographic is as follows (Fletcher & Crawford, 2011) Geographic Urban Demographics The rich business class having high social position in the society Social Economic Status Aimed at the upper segment of the society Psychographics Providing enhanced services which looks to enhance the pleasure for customers Steriline Racing thereby has been able to segment the market properly which will help to develop marketing strategies based on their target market. Target Market Steriline Racing looks towards eyeing people from all segment of the society but they mainly aim at people belonging to the upper class of the society. The prime reason for doing so is that it is considered as an activity of the rich and looking towards the upper segment as they have a higher purchasing power and are willing to spend more on leisure activities. This helps to identify the target market as Customer Aimed at Age Classification of purchaser Purchaser requirements Business Class 18-70 Both international and domestic business houses Having a high purchasing power and willingness to spend time and money on leisure activities Households 18 - 80 Married and single households Having a high purchasing power and willingness to spend time and money on leisure activities The above target market of Steriline Racing is thus aimed towards the higher section of the society and being able to target the correct market has helped Steriline Racing to ensure growth in its business. PESTEL Analysis The PESTEL Analysis will help to understand the manner in which the environmental factors have an effect on Steriline Racing and being able to deal with it effectively will ensure better achievement of the goals. Political The political instability especially after the September 11 terrorist attacks has made millions of dollars to be spent on security thereby increasing the pressure on the Steriline Racing to match with the set security standards (Mullins, 2009) as increasing customer base and more customers coming at the horse racing tracks makes it important to have appropriate strategies (Shostack, 2009). The manner in which the political situation and increase in security has transformed the way the Steriline Racing performs has ensured maximum advantage to the company from it (Mullins, 2009). Economic The number of customers visiting Steriline Racing has been affected by the present economic scenario faced by the entire world as the world is looking towards coming out of recession (Justin, 2011). Job losses have resulted in dwindling purchasing power which has made people postpone their luxury activities resulting in fewer people visiting the place (Justin, 2011). Thus, the recent economic conditions have affected the number of people visiting Steriline Racing. Social The growth in generation Y customers has increased the business for Steriline Racing as the generation prefers to spend money on leisure activities which matches the one being offered to the high section of the society (Mullins, 2009). This has resulted in changes in the taste and preference of customers as people are younger and look towards having the best alternative to spend their leisure activity (Wind & Robertson, 2003). This has helped Steriline Racing to take advantage of the social changes towards the growth of the business Technological The technological advancement has helped the industry to use different tools and techniques which has helped to enhance the pleasure for customers (Shostack, 2009). This has helped Steriline Racing to a certain extent but the influence of this factor has been limited to a large extent. Environmental This aspect of environmental factors has little relevance for Steriline Racing. Legal The legal external factors has also shaped the manner in which the Steriline Racing performs as drafting of rules by the government which allows foreign players has made widespread changes in the way the different players performs (Justin, 2011). Steriline Racing has been able to ensure that they obtain the required licenses and abide by the government regulations so that they are able to conduct their business without and legal problems. Potential Destination for Steriline Racing Steriline Racing can look towards increasing its business by looking towards developing their business overseas. For this Steriline Racing needs to identify the potential destinations that will help them to grow their business so that they are able to multiply their revenues and ensure proper growth of business. Steriline Racing can look towards growing their business by entering into India, China or Brazil. The prime reason for choosing these destinations is that they provide an opportunity for business and with the manner the Indian, Chinese and Brazilian economy is growing it provides an avenue of growth. First Choice for International Business Steriline Racing should look towards India as the most favorable destinations because of the varied opportunity being provided by the country. The growth in the purchasing power and the economy being able to generate positive growth rates despite all economies highlighting negative growth rates provides an opportunity which Steriline Racing can look towards for their future growth opportunity (Doole & Lowe, 2001). This will thereby help Steriline Racing to be able to ensure that they are able to target the correct customer base and able to grow their business effectively. Challenges in introducing the service Steriline Racing looking towards introducing the service will face the following challenges Convincing the customers regarding the quality of service and customer experience that people visiting the place will have Ability to mould themselves to the changed culture which will require a change in service and looking towards having an integration of the local typologies in their working culture Designing a marketing strategy which will help Steriline Racing to ensure that the customers are targeted correctly which helps to enhance their experience Strategy to Enter the Market Steriline Racing can look forward towards the franchisee model while entering India. Steriline Racing while entering the market can use the franchise model to ensure that the cost remains low and can look towards vertical integration which will ensure that Steriline Racing is able to provide services more effectively (Cateora & Graham, 2002). The franchise agreements will help Steriline Racing to understand the market conditions better and derive a mechanism which will ensure that Steriline Racing is able to utilize the franchise agreement in a manner that will yield maximum efficiency. Recommendations Steriline Racing can look forwards towards entering into India and need to develop the appropriate business model which will fetch them maximum efficiency. Steriline Racing needs to ensure that while entering the country they need to mould their services and need to look towards designing a mechanism which matches with the required culture so that customer experience gets enhanced. Along with it Steriline Racing should ensure proper marketing strategy and look towards targeting their customers correctly. This will help Steriline Racing and will ensure that they are able to generate the same business. Conclusion Steriline Racing should thereby look towards identifying a strategy which will help them to grow their business and ensure efficiency in operations. Steriline Racing has been able to ensure high service and being able to use the same model and develop their services will help Steriline Racing to ensure better return and growth in their business avenues. References Cateora, P. R., and Graham, J. L. (2002). International Marketing. 11th Edition, New York, McGraw-Hill Doole, I., and Lowe, R. (2001). International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson Fletcher, R. and Crawford, H. (2011). International Marketing: An Asia-Pacific Perspective, Pearson Australia. Justin, A. (2011). Service Industry, Service Sector Management, Business Week Mullins, K. (2009). Critically examine the main drivers for Steriline Racing growth. Free Press. New York. Shostack, G.L (2009). Designing services that deliver. Harvard Business Review 62 (1), 133–139. Steriline Racing. (2011). Steriline Racing. Retrieved on December 3, 2011 from http://www.sterilineracing.com/index.cfm?objectid=873C2F59-AE05-8882-A7EBDF2891238CC1 Wind, Y. and Robertson, T. (2003). Marketing Strategy: New Direction for Theory and Research, Journal of Marketing, 47 (2), pp. 47-89 Read More