Strategic Proposals To Enhance The Future Of Asia-sports - Essay Example

Five-Year Future Outlook of Asiasports: Introduction: Asiasports, based in Hong Kong, began its venture as a sports management company focusing its core activities around the objective of developing and officiating ice hockey. Asiasports was formally established on July 1st, 1996 with the aim to market and promote hockey as well as other properties such as slo-pitch softball and golf. As the company is still in the entrepreneurial stage, it faces the challenges of financial and human capital as it comes to crossroads of various strategic proposals to enhance the future of Asiasports as a pioneer marketer and organizer of hockey tournaments and development programs in Hong Kong. Industry Structure: Ice Hockey had been in existence since the 18th century, when it was first played on frozen lakes and ponds in Western Europe. During the 19th century, Hockey began to take shape and standardize rules in 1870s and was first formally played in Kingston, Ontario, Canada in 1885 as the first ice hockey league. From Eastern Canada, Hockey spread to Western Canada, Northern USA and across to Scandinavian and Northern European countries. The growth of hockey was due to two factors. Firstly, hockey was viewed as a spectator and team participation sport. The fast pace and exciting sport faced competition from a variety of other popular spectator sports. Company Structure: Asiasports is an established private company with the majority of shares and decision-making power held by Shane Weir and Bill Gribble, 30 percent each. A Hong Kong capital venture company holds 20 percent of shares whilst 10 percent of shares are awarded to the executive director, Tom Barnes. Thirty shareholders hold the remaining 20 percent of shares. However, the financial resources of the company are limited to the contributions of the two majority shareholders and executive director, Tom Barnes. Tom Barnes and his assistant, Keith Fong who contracts out secretarial support, handle day-to-day operations of the company. Volunteers of hockey league members and their families also support Asiasports. Figure 1 shows the exponential growth of the annual event over the past six years as the tournament. Throughout the past three years of operations, Asiasports has established a niche position as the only provider of organized ice hockey tournaments and development programs in Hong Kong. The most popular product of the company, World Ice Hockey 5’s has seen substantial growth since its introduction in 1990’s as Hockey 5’s. The tournament consisted of five players instead of six and a smaller rink. The tournament was launched as World Ice Hockey 5’s as a weekend event, beginning with six teams (three local and three international teams from Beijing, Bangkok and Bahrain). The growth of the tournament has attracted substantial local and international media coverage through 49 clippings and stories published in both Chinese and English in Hong Kong. ATV, a Hong Kong electronic media broadcaster also covered the final two days of the tournament. TVB Pearl featured a five-minute broadcast, in addition to coverage provided by CNN and the Asia Sports Show. The 1999 tournament also featured special guest star, Gordie Howe. The rapid increase in media coverage and coinage of World Ice Hockey 5’s was due to the market development of the sport. Asiasports captured the demand for new markets of its existing product by embracing international teams and introducing new divisions within the tournament over the years, including a Women’s and Kid’s Division. The breakdown of the 1999 tournament divisions and source of teams can be seen in figure 2. Figure 2: Kid’s Division (Introduced in 1998) Women’s Division (Introduced in 1997) Men’s Division 1 Men’s Division 2 (Introduced in 1998) Number of Teams Number of Teams Number of Teams Number of Teams 11 6 15 10 Sources of Teams Sources of Teams Sources of Teams Sources of Teams Hong Kong Canada Canada Hong Kong Philippines Hong Kong Bangkok Macao Singapore Japan Hong Kong Philippines Taiwan Philippines Japan Singapore Singapore Singapore United Arab Emirates Taiwan United States United Arab Emirates Figure 2 With increasing global presence and media coverage, World Ice Hockey 5’s in 1999 was announced as the largest ice hockey tournament in Asia and the largest Hockey 5’s tournament in the world. In addition to the World Ice Hockey 5’s, Asiasports is also invested in the development and organization of South China Ice Hockey League (SCIHL). The company organized hockey tournaments in 1997, in Macao, Bangkok, Thailand and Southeast Asia. Manila, Dubai, and Bangkok were active locations of hockey tournaments during 1998 and 1999. In addition to organizing tournaments, Asiasports also helped teams sign up for tournaments across borders, for example, in 1998 the company helped teams register in Ulaan Baatar, Mongolia for a tournament. Besides organizing tournaments, Asiasports is also involved in the development of hockey in Hong Kong, through programs for coaches and training programs for children that want to learn ice hockey or in-line hockey. Aside from involvement in hockey, Asiasports infrequently promotes non-hockey sports such as, softball or golf. Asiasports is considering a number of options in search of strategically identifying lucrative positions to strengthen its financials and solidify the current activities in Hong Kong before expanding. The options are briefly described below: a) Set up Hockey Leagues in Southeast Asia. As the only provider of such services, Asiasports stood ahead of an opportunity to establish itself and gain customer loyalty in Taipei, Taiwan, Bangkok and Manila among other cities. b) Development of an In-line Hockey: The In-line hockey was in need of promotions since it was still new in Hong-Kong. By promoting this option, there were high chances of Asiasports to have close connections with the NHL, for future promotions. c) Expand the existing tournaments: Asiasports organizes several tournaments every year in cities. More time committed to developing the sponsors of numerous events. By expanding these tournaments, the opportunity derived could foresee more success in the future. d) Promoting the Semi-pro league in Hong Kong: This pro-league would increase Asiasports’s profile; thereby, promoting the idea of players receiving salaries instead of them paying fees. PESTLE Analysis: There are numerous factors in the environment that can affect Asiasports as a business. The new laws in the Asian cities, government policy the demographic change among others are some of the examples that are likely to cause an impact on the business. To analyze such factors, the PESTLE model below will guide the business on the most viable options to be used. Political factors: These are factors such as government policies, which may have an impact on Asiasports. Asiasports is a private company; therefore, it has its own policies. Expanding in the Asian cities requires Asiasports to be flexible and accommodate services that the governments in these cities deem fit. The political decisions made by these governments may also impact Asiasports in different areas, such as the workforce, health and the participants. Economic factors: The economical factors include the tax changes and interest rates that can be charged when expanding in these cities. These factors range from exchange rates, economic growth. Increased interest rates in the new environment can affect the investment of Asiasports because the rates at which costs are borrowed are usually higher than those in investments. Strong currencies may spell out doom, as expanding in such states is difficult because the prices of the activities or services can increase. Inflation in the Asian states can result to increased demands on wages and costs that are raised for employees. However, the increased national income growth that is there in the Asian states is likely to promote Asiasports services. Social factors: The changes particularly the social changes or trends are likely to impact both negatively and positively to Asiasports. The impact may be that Asiasports services provided may entirely depend on the demand for the services and the willingness of the participants to participate in these sports. For example, a population that is aging is not likely to be participating fully in the sports events like the population where few people are aging. Technological factors: Use of advanced technology is likely to promote the activities and services that Asiasports is developing in the new market. Use of advanced technology is likely to reduce on the costs used in expanding Asiasports. Environmental factors: These include the climatic changes in the new market that Asiasports is likely to venture into. If there are diverse changes in temperature, this is likely to result to a negative effect on this firm. Asiasports is highly dependent on the fact cold and winter conditions. Ice Hockey is, therefore, an impossible sport when the climatic conditions change from cold to warm. Legal factors: These are the factors which relate to the legal environment, where Asiasports will make its operations. Introduction of disability and age discrimination has led to an increase in demand for greater requirements and rise in the minimum wage. Legal changes in a marketing environment are likely to affect the costs of operations for Asiasports. Strategic Analysis of Asiasports: The strategic analysis of Asiasports can be represented using a SWOT analysis, and Porter’s five forces Model of competitiveness. The analysis is strategically modeled for the purpose of focusing on prioritizing two things. This includes the increased prioritization opportunities and the buildup of competencies. If the opportunities in Asiasports are prioritized, Asiasports is likely to develop products which have high demand in the markets. As aforementioned, the buildup and opportunities of Asiasports promotes its competencies around the industry, therefore, there is a likelihood of getting more sponsors and participants. Strengths: a) Asiasports will have a sound global recognition after its expansion in the Asia cities. b) Asiasports will have a strategic tie-up with the NHL and as a result, get promoted. c) There will be excellent cost of management d) Asiasports is likely to have a world class accreditation from its sponsors. e) The work force is likely to be more experienced, be industrious and be a low cost work force. f) Sound presence for Asiasports in Asian markets Weaknesses: a) Asiasports has a range of services that are diversified. However, the income from the business is increasingly being dependent on other sports events that are not so common in Asian countries. This may cause Asiasports to be vulnerable in case the market they are promoting themselves in erodes. b) Asiasports is operating on a budget that is limited; therefore, expanding may turn out to be more difficult. c) It may be hard to convince the participants of the sport to adopt other forms of sports. Opportunities: a) The Asian market is growing at an increased rate; therefore, introducing new sports to the populations may bring back some returns for Asiasports. b) Asiasports has a chance of developing relationships with other firms on an international level. c) There is a chance of promoting a new sport in the cities which most people are not aware of, thus it can promote Asiasports’s image. Threats: a) There is a likelihood Asiasports will face competition from other firms. b) The local competitors in the Asian markets are likely to realize that the cities have a gap in sporting events or activities. c) A decline of sporting events in the future is likely to affect the future of Asiasports. Evaluation of Asiasports Alternatives: Making a presumption that the key issues in Asiasports are defined, the process of evaluating Asiasports’s effectiveness should, therefore, be easier as there will be alternative solutions. The main goal of evaluating the alternative in this business is for the purpose of identifying how the issue can be improved. By use of the recommendation provided for Asiasports, it will be easier to determine the success of Asiasports once it is established in the new environment. Various alternatives will need to be compared with other alternatives to achieve full success. Recommendations: Business and Industry Development: New strategies will be employed so as to ensure that Asiasports is competitive in the industry. An executive plan will be used when Asiasports involves itself with the Asian communities to promote the firm’s image and services. Management of Participants and Employees: The new environment that Asiasports will be located should correspond with the requirements of the participants and employees in Asiasports. If the firm directs more attention to supporting and motivating its participants and employees; thus, it becomes easier for Asiasports as a business to be successful in its operations. Management of Finances: All the operations that will take place in Asiasports have to be audited. All the operational costs and the budget that shows the trends in cots have to be indicated in the transaction history records. Management of the events: Asiasports has to maintain its image as it is operating on an international level. By managing the events ahead of time, there will be less time wasted and confusion in the future. A chronological plan of how the events will take place is likely to promote Asiasport’s image in the eyes of the sponsors. Conclusion: To succeed in venturing in the Asian market, Asiasports has to develop all its action plans and implement them if the future plans are to work. Asiasports has to succeed in its marketing plans, and in marketing its image as it expands in diverse cities, in the Asian market. There will be development of tactics and use of new technology for the future outlook plan to be successful. Read More