Monthly Archives: September 2008

NASCAR and Wal-Mart

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Can the business of NASCAR be compared to that of Wal-Mart? Perhaps I am going to the extreme here, but the two enterprises have a great deal in common.

I am a business student and confess that I do not have a lot of knowledge about NASCAR, having only been to one race and almost a second (but a hurricane changed that opportunity). As we discuss the different aspects of NASCAR in our “Business of NASCAR” class, I hear so many Wal-Mart similarities woven into our class discussions.

As many of us know, Wal-Mart leads a secretive life in business. There is not much known about how the company operates. Its employees’ and suppliers’ conversations are held in strictest confidence. If word gets out that a supplier has talked, whether good or bad, the business relationship could be severed. NASCAR runs the same way. Contracts with drivers are kept extremely confidential as are the terms of sponsorships. Perhaps not to the severity of relinquishing the contract but you rarely hear about the terms of a contract, unless a case goes to court and the contract is available to the public eyes.
Wal-Mart and NASCAR are similar in their clientele. You have Wal-Mart lovers and Wal-Mart haters, as you do with NASCAR. Wal-Mart and NASCAR are parallel in that their followers are very loyal to the company.

NASCAR and Wal-Mart hold a great deal of power in negotiating with their suppliers. They both hold the upper hand. If you do not do business their way, then others are waiting in line to take your place. With Wal-Mart if you cannot supply your merchandise in a timely manner following its shipping provisions, then Wal-Mart can easily pull its business and forward it to a company who can, often without warning. In the NASCAR world, if you are late with your entry form, NASCAR holds the option to accept or deny entry into the race.

While the companies are different in so many ways, their likenesses are uncanny. They both are a business that has the reputation of having the upper hand, and they know it. They call the terms, they call how they want things done, and you must adhere to their rules.

And that’s my view from here.

AV

Red Bull Gives NASCAR wings.

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The statement that NASCAR does not glean international attention may no longer be true. About ten years ago NASCAR tried exhibition races at Twin Ring Motegei and Suzuka Japan with little success. Fast forward ten years and NASCAR now has points-paying races for the Nationwide Series in Montreal, Canada and formerly Mexico City, Mexico. True, these sites are still in the Western Hemisphere and just north and south of the United States, but it is a start.
If you take a look at the drivers, many of their backgrounds are much different than the drivers of a few years ago. Sponsors have changed as well. The sport has moved from Winston and Goodwrench to M&M’s and Red Bull energy drinks. This is where the future of NASCAR lies.
Team Red Bull Racing is a new form of NASCAR team in the series. This team is not owned by a single owner or small group; it is owned by Red Bull. This is new to the sport because never before has a sponsor owned the whole team. From top to bottom, executives at Red Bull Racing make the personnel decisions, which brings us to the topic of Scott Speed.
Speed broke into the world of big-time racing when he got a ride with the Red Bull Formula One team after winning a driver-talent competition put on by Red Bull. After a couple of poor seasons in Formula One, Red Bull dropped Speed and put him in the stock car ranks. He came up through the ARCA ranks and is now poised to take the seat vacated by A.J. Allmendinger on the Sprint Cup Series team.
The interesting thing about this driver switch is that the decision was not made by the NASCAR team; it was made by Red Bull executives in Austria, the company’s home country. In my opinion, I believe this is what is on the horizon for NASCAR: powerful international companies owning teams from top to bottom and making driver changes in the board room far away from the race shops.
With Scott Speed on the scene, even though he is an American, Red Bull and companies like it may look to buy into NASCAR along with international drivers to make a statement in an American sport. The money is definitely there and the coverage is plentiful, enough to pull the likes of Jacques Villeneuve, Dario Franchitti and Juan Montoya over. Maybe in ten years the next Justin Wilson will be in a Vodafone Chevy and not a McLaren.
And that’s the view from here.
AT

“Luck Drives Again”

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Luck! The word itself is not that impressive, but in NASCAR it can make or break a driver. Luck is defined by dictionary.com as a series of events which affect one’s interest or happiness regarded as occurring by chance. It is a mystical force that can bring about a winning streak or instantly throw you to the bottom of the elite twelve when it runs out (sorry, Kyle Busch.).
Every sport has its superstitions regarding luck. Basketball players dribble the ball before a free throw for good luck. Bowlers won’t change their clothes when they are on a winning streak. Bull riders always put their right foot in the stirrup first. That is probably the reason that sportscasters and sportswriters alike focus so much on a driver’s “luck”.
Please don’t get me wrong. NASCAR has many factors that contribute to a win each week. You have to have a good team, you have to have a good car, you have to have a good driver and you have to have an incredible pit crew. But, if all of those other factors are in place, and you are still not winning then it is time to break out the rabbit’s foot. Greg Biffle fans have certainly been rubbing theirs.
And for all those fans out there supporting drivers like Junior and Hard luck Hamlin, keep the faith, keep rubbing the rabbit’s foot, and start searching the fields for four leaf clovers. Their luck is bound to improve (at some point).
And that’s the view from here.
DH

Does NASCAR need to consider alternate fuels?

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While surfing around the internet for something to write about for this blog entry, I stumbled across an article entitled: “NASCAR needs to look into alternate fuels.”
Being a fan of NASCAR and the loud engines that go along with the sport, I had to read what it was all about. According to Mike Mulhern of the Winston-Salem Journal, NASCAR needs to jump on the “green” bandwagon. Mulhern believes that NASCAR could attract more fans by re-evaluating what runs these cars. He states that “NASCAR can do {more} to appear more in step with the real world.”
However, NASCAR is not the real world. Races are where fans go to watch people battle it out for the checkered flag. Races are where people can race legally at 200 MPH speeds and not get ticketed for going that fast. Mulhern believes that NASCAR could improve its PR and marketing by putting more fuel-efficient cars on the track. Maybe it’s just me, but I feel that NASCAR would lose its die-hard fans if this were to happen.
These cars could be engineered to have more power, but would there still be the glorious roar as the drivers start their engines, or when they pass; would it make the fans cheer for their favorite driver? I, personally, would be terribly bored if the track was quiet with all the hydrogen-cell cars going around the track for three to four hours.
Mulhern also states that maybe NASCAR should use a more fuel-efficient car as the pace car. Aren’t most of the cars now more fuel-efficient than they used to be anyway? Maybe for Dodge, Toyota, Ford or Chevrolet to introduce hydrogen-cell cars to the NASCAR nation, NASCAR should use the manufacturers’ new cars as pace cars, as long as the new car can keep pace with the line of 43 behind it.
I feel NASCAR could do more to keep its fans interested in the sport, like keeping the rules to a minimum or trying to incorporate fans more during races, other than putting more fuel-efficient cars on the track.
But that’s my view from here.
CB

Melted M&Ms

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Now that the chase has “officially” begun, fans like me can’t take their eyes off of the battle between top drivers such as Carl Edwards and Kyle Busch (and quietly Jimmie Johnson). The competitive battle, all year long, between Edwards and Busch has given the Chase an added reason to watch the races. This competition is slowly becoming a great battle between the two, and hopefully will be for years to come. Although it’s not an “Ali versus Frazier” battle, who’s to say it isn’t as big as some NFL head-to-head battles?

And while the head-to-head battle adds fuel to the fire, let’s not forget Jimmie Johnson quietly making his way to another championship.
And that’s my view from here. AD

Melted M&M’s

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Yeah. I’ll say it…I like Kyle Busch. So if you want to throw something at me, then throw M&M’s (like them too!)

So while playoff season for both the top spot and the 35th spot (money even back there) has begun, it has not begun well for some. NASCAR has to hope that ‘bad boys’ (hmm…who can that be?) stay competitive as it gives the fans a bit more ‘spark’ regarding interest levels.

While Dover will most likely be a ‘chew-em-up’ race , NH showed me a bit more about risk and how much a team has accounted for the same in their ‘strategies’.(After all it’s what I teach).

So I would like to ask the reader—who rolled the dice and who has the best strategy for winning the ‘chase’ (or and spot # 35 as well)?

Remember, it isn’t over until…well at least until someone sings.

And what’s up in Argentina?

That’s the (calculated) view from here.

Mike

NEW TWIST TO OUR BLOG

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As some of you who read our blog know, my colleague Mike Pitts and I have been teaching a five-week Honors module on the Business of NASCAR for the past five years. This semester, we started a full-semester class for School of Business majors on this topic as well. As part of their course requirement, all students will write one blog entry to be posted here. We hope you enjoy their comments and insights into the greatest racing series in the U.S.

On another note, it will be interesting to see what fall-out, if any, will occur in NASCAR due to the troubles on Wall Street (and elsewhere). Attendance at New Hampshire looked good on TV yesterday. The race at RIR last week was pretty well attended, given the rain-out on Saturday. However, the Nationwide race attendance was dismal. At least, that’s the view from here. Jon