Strategic and Financial Management Report: Silverstone Circuit

This report provides a detailed strategic and financial analysis of the Silverstone motor racing circuit. It begins with an overview of the circuit, its popularity, and its significance in the UK. The report utilizes SWOT analysis to evaluate the circuit's strengths, weaknesses, opportunities, and threats. The analysis delves into the circuit's brand recognition, experience, and the impact of the British Grand Prix. Weaknesses such as financial constraints, contract dependency, and internal decision-making processes are also examined. Opportunities like partnerships with training institutions and technological advancements are highlighted. Threats, including high ticket prices and climate-related issues, are also discussed. The report extends the SWOT analysis by using a TWOS matrix to formulate strategies and select the best tactics for Silverstone. Finally, it addresses the implementation phase, discussing issues related to effective strategy execution.

Strategic and Financial
Management for Events
Organizations

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
(1) Current analysis of Silverstone circuit..............................................................................2
(2) Strategic management.......................................................................................................6
(3) Implementation phase ......................................................................................................9
Conclusion.....................................................................................................................................13
REFERENCES..............................................................................................................................14
Appendix........................................................................................................................................16
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INTRODUCTION
Success and development of the organization depends upon the efficiency and
productivity of all the operations undertaken by it. Among the three fundamental pillar of the
operation pursued by the organization, strategic management is the most crucial with the other
two operational management and resource management. Report is prepared to elucidate the
different components of strategic formulation processed by selected organization Silver-stone
motor racing circuit. Solverstone is a large circuit in the UK where race related to bikes and cars
happens. Every year thousand of the people comes here in order view race live. Time to time
race of British grand prix conducted in this circuit and in order to view this race every year
thousand of people comes at Silverstone. In past years ticket prices also rises at the Silverstone.
But even though people visit its circuit in order to view live race. So, it can be said that
Silverstone circuit is very popular in the UK. It is one of the largest track in UK which has so
many years of experience of organizing such kind of events in UK. Due to this reason it is giving
stiff competition to its competitors. In the report SWOT analysis of the firm is also done and on
the basis of this analysis lots of information about the company strength, weakness, opportunity
and threat is collected. For this deep research is done on various websites, books and Journals.
On the basis of details provided by these sources of information SWOT analysis of the firm is
done. On the basis of these informations TWOS analysis is done. TWOS is extension of SWOT
an analysis because in SWOT analysis only strength, weakness, opportunity and threat is given.
But in a matrix strategy is not formulated. In order to remove this error in the report TWOS
matrix is included and four combination tactics are formulated. After preparation of strategy best
tactics is selected for the Silverstone. At the end of the report, the way in which the selected
tactic can be implemented is determined by the managers. In order to make sure that
implementation will happen in proper manner all issues related to the effective implementation
of the strategy are also discussed in the report. Hence, it can be said that in the report every effort
is made to make sure that best strategy will be selected for the firm and same will be
implemented in proper manner.
(1) Company overview an inroduction
In order to analyze Silverstone circuit business SWOT analysis is used which is in
appendix. On that basis situation analysis of Silverstone is done.
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Analysis on the basis of strength
If we analyze strong points of this track then it can be seen that it is a giant track and its
specialties are unique. The length of the one lap on the Silverstone track is 5.891 Km. Along
with this; total number of laps is 52 on the mentioned track. This indicates that track is very giant
in nature and it has good inbuilt capabilities that make racing experience better for racers and
viewers. Apart, from this, distance of move from the starting point is 420 m which makes
competition among racers too complex (Van der Wagen, 2010). They have to pay due attention
on their speed in order to make sure that their vehicle does not goes below track. Due to such a
short distance many times top racer loses control on his vehicle and go below track and lagged
behind in race. This is the reason due to which every year British grand pix is organized every
year on this track.
Silverstone has a good brand name and people in Europe and other continent nations are
familiar with its name. Every year many foreign people who like to view race visit this circuit in
order to view bike and car racing. Due to this reason with passage of time this circuit gets
popular among the people. Other factor that makes this track most popular among the people is
the British grand prix which is organized every year in the Silverstone circuit. People in order to
view race of British grand prix every year comes on this circuit (Masterman, 2014). Hence, it can
be said that Silverstone is time to time organizing such kind of big race and due to this reason it
earn a good name among the people.
Silverstone has large year of experience and it was established in 1947 after that it
conduct many races. These races were organized in proper manner if we compared on different
parameters. Hence, it can be said that Silverstone is making proper use of its experience and
continuously bring changes in its service quality (Bellmunt, et.al, 2011).
Analysis on the basis of weakness
The main weakness of the Silverstone is that despite of good brand name it is not able to
bring investment on its tracks. Currently, Silverstone is managed by a group of bikers association
which is also known as BRDC. It covers about 850 members and the main problem is that every
one of them has different views on investment and its proposals. Due to this reason a large delay
is causing on investment decisions and no fresh investment is coming on the mentioned circuit.
On other hand, there are high track maintenance charges and other expenses. As a result,
management of Silverstone is facing huge problem in covering its expenses parts by the earned
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revenue. So, lack of consensus is the major limitation of the Silverstone (Ravaud, 2011). The
other main weak point of the Silverstone is that its contract for organizing British grand pix will
comes to end in financial year 2016. Due to this reason, in future silverstone will entangle in a
big problem because this race is a major source of income for it. In the case it does not get this
contract for upcoming years then it faces serious problems. Hence, it can be said the Silverstone
is highly dependent on British grand prix race for earning revenue.
Currently, also financial condition of the Silverstone is not good and due to this reason it
is compelled to sale its land in order to pay its debt amount. On that land firm earn a rental
amount and now after sale of asset it will not receive such kind of income this thing will further
add problem for the Silverstone. Hence, lack of decisive decisions regarding future is not taken
by the management. This is also major weakness of Silverstone. With passage of time hosting
fee is also increased by the British grand prix and Silverstone is passing this enhancement of fee
through increased price of its tickets on general public. Due to this reason Silverstone is earning
low margin on its tickets and is not able to get letter of credit from banks easily (Emery, 2010).
It is not making any efforts to generate economies of scale by using which it can reduce its cost
and increase margin. Hence, it can be said that management passive role is another weak point of
the Silverstone. BRDC is managing this circuit and it is using voting rights system in order to
take decisions. Due to different opinions all members gives their votes in different direction
which is hindering decisions making process. This is another weak point of the Silverstone.
Analysis on the basis of opportunity
National college of motor sport is a newly opened organization that gives training for the
bike and care race. Students of this college will get an opportunity to participate on racing at the
Silverstone track. Hence, this will to some extent will help Silversotne in increasing its revenue
and reducing its dependency on the firm. So, it can be said that this is the big opportunity that the
mentioned circuit have in respect to revenue. Silverstone is using best technology for modifying
its tracks and giving good visualizations to the people on large screen (Pedersen and Thibault,
2014). Use of new technology in renovation of the track will create separate image of the circuit
in the eyes of the general public. Hence, this thing has a multiple advantages for the firm. On
other hand, firm is also going to establish new LED's on its circuit which will be very large in
size and its picture quality will be high. This will improve people experience at the Silverstone
and again will create different image from the competitors. This will also help in increasing
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gathering level. If same will happen then revenue level of the firm will also increase
(Tkaczynskiand Stokes, 2010). Hence, it can be said that use of advanced technology will make
people experience better in respect to race on the circuit. This experience will not be good only
for the people but will also be good for the racers.
It has been seen that with passage of time people interest is increase in racing games.
Country, like Indian in which people love to view cricket car racing is started in Buddha
international circuit. This trend is observed in almost all nations of the word. On the basis of this
fact it is assumed that in future revenue of the Silverstone will increase at a rapid rate. Hence,
wide opportunity of growth is observed in the car and bike race (Hall, 2012). In this year, some
of the popular racing groups similar to British grand prix contracts are coming to end and this is
best time for the Silverstone to increase its revenue earning capability. It can enter in to long
term contracts with these racing groups and can reduce dependency on the British grand prix for
earning revenue. Anyone would like to enter in to contract with the Silverstone because it has
long experience in this game and it has a long track which maintained in proper manner. It is
located in UK where inbound tourism is very high and people love to watch this racing game.
Hence, people will certainly come to watch this game. Secondly, more contracts Silverstone will
earn more its revenue will increase in multiple (Kim, Kim and Odio, 2010). So this is a very
huge opportunity which is waiting for the Silverstone. It must take immediate step in order win
as much contracts as possible.
Analysis on the basis of threat
There are huge threats that a firm is currently facing and high price on the ticket is one of
them. Silverstone is currently charging £ 170 on the people for viewing bike or car race on its
circuit. This rate is very high and it is maximum amount per ticket that Silverstone charge on the
people for enjoying a race vent on its circuit. This is a very high charge and this may negatively
affect people preference to visit Silverstone circuit. This will result in to low earning and failure
to pay bank debt. Hence, it is necessary for the Silverstone to identify ways in which it can face
this problem and soften same to some extent (Liaw and et.al, 2010). Climate change in another
problem that Silverstone is currently facing in its business. Due to fog bike and car riders face a
visibility problem and in case of fog racing event is not organized and Silverstone face a huge
loss. This is a natural problem and it is very difficult to handle that situation. Again due to rain
firm face a loss in its business. Silverstone needs to identify a way in which it can sort out this
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problem. For this it can cover tracks with plastics. So that riders do not face problem of rain and
firm does not face a loss in its business.
Competition is point where every business faces lots of problems and same thing is faced
by the Silversotne. There is large number of competitors of the Silverstone and it needs to do
something special in order to become stronger competitor. In early time period it follows a
passive strategy and gets a contract of only British grand prix (Burdenn and et.al, 2012). Due to
full dependency British grand prix Silverstone faced lots of problems. Hence, it needs to take
some of the steps in order to resolve this issue. Currently, government become very strict on the
environment rules and regulations and it is fully committed towards keeping a stiff control on the
sources from which noise and air pollution comes in existence. In bike and car race lots of sound
is produced because many bikes and cars are running together (Reid and Ritchie, 2011). Due to
these reasons government may take strict action against these bike and car racing events. Hence,
this will acts as a threat for Silverstone.
(2) Generation of strategic choice
Silver stone motor racing circuit is the organization engaged in the slew of operation,
consolidated large stream of customers and suppliers by providing quality services and products.
Organization possesses the profound management of strategy formulation with the optimum
utilization of resources. Strategies are formulated to optimize the available resources and seek
better opportunities to establish the prominent position in market. In that regard, it is imperative
to conduct overall analysis of external and internal environment that has direct and indirect
influence on the working and functioning of organization (Lasserre, 2012). For that purpose
SWOT analysis was done which has identified the current situation and degree of influence of
factors in four different dimensions. It analyzes the mentioned firm through its strengths,
weaknesses, possible opportunities and threats it encounters. On the basis of above analysis
strategies are formulated to derive benefits in economic and social terms. Growth opportunities
and possible developments prospects are seeked by using TWOS model. This model is a
structured and planned way to framing strategies by considering all the components prevailing in
the system. On the basis model following strategies are prepared.
Strengths-Opportunities strategies Market expansion: With the availability of the better infrastructure that is the tracks and
circuit designed and constructed by the efficient engineers has created the competitive
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advantage on the rivalries that are lagging far behind in providing good facilities. This
has created the opportunity for the cited organization to consolidate with larger number
of people such as collaboration with national college of motor sport for the students will
widen the customer base (Freeman, 2010). Facilitating the students for training and
providing opportunities for participation in events conducted at the circuit will benefit the
organization lucratively. Technological enhancement: There is always the scope of improvement to optimize the
resources to provide the quality services. On the grounds of providing sustainable sport
and games, encouraging research and development to make the racing pollution free both
noise and air will be the crucial step with respect to complying with environmental laws. Cost leadership: Silver-stone has the wide stream of people connected with it and has the
good brand image in the market it is operating hence, instead of polarizing the opinions
with respect to ticket pricing varied options can be adopted(Hitt, Ireland and Hoskisson,
2012).
Strengths-Threats strategies Mergers and acquisitions: So far the organization of events at the selected motor racing
circuit is limited to only few organizations such as British grand prix. Confining the
operations too few organizations hinders the growth and development. In order to expand
the functioning it is essential to collaborate with more events will escalate the customer
interactions and collaborations. Innovation: To widen the Gap with the competitors, it is essential to come up with the
innovative methods and options. Hence, in this regard organization caters to bring the
creative and Eco-friendly options for racing and the improvement of tracks(Hill, Jones
and Schilling, 2014). Management optimization: The central part of the organization is the efficiency and
productivity of organization. It is very imperative for organization to adopt the better
operational management strategies. In this respect adopting fragmentation and
segmentation strategy will accrue desired results. In this process, operations and working
is sectioned into several parts as per their functional areas and accordingly they are
processed.
Weakness-Opportunities strategies
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 Improving relational constructs between shareholders: Figuring out the existing
obstacles that hinders the development of organization infer that due to the lack of
consensus among the shareholder while taking crucial decisions limits the possibility of
taking beneficial decisions (Slack, 2015). Hence, by developing the internal environment
of better mutual consent, beneficial steps will be taken that will accrue lucrative results to
the company. Major conflicts occur at the time investment related issues hence in the
mentioned case by analyzing the entire pro and cons final decisions can be taken. Improving capital status: It is realized that organization lags behind in having better
collaboration with the financial institutions. Enhancing the financial status will benefit
the organization by attracting large number of investments. Relational constructs with the
finance providing organizations can be improved by narrating the possible growth
prospects and development chances by the organization and its nature to trickle down it
to all the links connected to it (Lasserre, 2012). Channelizing finances: It is very crucial for an organization to manage their finance in the
very optimum level which means that available finances liquidize to the productive
activities results the organization for the benefit of both organization and employees. On
the contrary, draining of it to the unproductive functions leads to the cost maximization.
Adopting of the cost minimizing strategy will help in managing the finances by
minimizing expenses and increment of positive results and outcomes
Weakness-Threat strategies Improvement of infrastructure: Advancement of technology in every field has escalated
the competition level in every field. Market place in becoming volatile in the very
considerable manner that led the organizations operating in it to improve their products
and services in every dimension. Customers seek optimum level of products as per the
degree of cost effectiveness (Ward, 2012). Hence, in this regard to hold the effective
position in market it is imperative for organization to make their products distinguished
from others. Tracks are the central part of motor racing circuits, frequent up-gradation of
the condition of tracks is essential as per the requirement. Its management to prevent it
from damage prevents accidents; provide better experience of driving to the customers is
the fundamental component of track maintenance.
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 Seeking frequent feedback from customers and employees: With the aim to provide the
quality services and products to the customers, adopting comprehensive review method
will be crucial (Ackermann and Eden, 2011). Comprehensive review method includes
seeking feedback from the two directly linked components with the services provided that
is customers and employees.
(3) Evaluation stage
PESTEL analysis of Silverstone is as follows. Political environment- It refers to the political parties and their ideologies. Their
ideologies directly affects firms growth in the nation. UK government if fully committed
towards growth of this sport. This is because there are number of people that like to view
this kind of sport. Hence, it can be said that political environment is favorable to
Silverstone. Economic environment- Economic conditions of the nation is not good but it is in
recovery stage. With passage of time unemployment rate is reduced and people income
level is increased. Due to this reason more and more people would like to visit
Silverstone circuit in order to view a game. Hence, economic environment will be in
favor of the firm. Social environment- It refers to the people attitude, behavior and belief. People attitude
and belief is positive towards car racing events. Hence, there is no problem on this front. Technology environment- Technology environment refers to the technology that is used
by the firm and competitor firms. Silverstone is using advanced technology for
renovation of its tracks. Malaysia tracks are also very advanced from technology point of
view. Hence, it can be said that Silverstone does not have any problem on this front. Environment- Lots of pollutants are released by the vehicles in bike and car race and
government can take strict action against these races. Hence, to some extent there is a
threat from this component of business environment to the firm Legal environment- It refers to the rules and regulations related to the business.
Silverstone needs to follow all relevant rules and regulations in order to avoid a strict
action from any regulatory authority. In case of violation of law authorities can charge
penalty on Silverswtone. Hence, it need to cautiously follow these rules and regulations.
Is strategy feasible
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This strategy is feasible because in this strategy Silverstone is expanding its market by
entering in to agreement with the national college of motor sport. It has good name and can win
contracts. Hence, from this point of view strategy seems feasible for the firm. Technology
enhancement that is proposed in this strategy is also possible to implement at the ground level.
Hence, from this side also strategy appear to be feasible. By issuing tickets at different prices
firm can satisfy needs of the different viewers. Hence, this will help in increasing customer base.
Thus, it can be said that this strategy is feasible for the firm.
(3) Implementation phase
Therefore, top level management should focus on company’s strengths and opportunities
strategy which is available to them through TWOS matrix and accordingly undertake different
tactics such as market expansion, technological advancement and cost leadership (Schulenkorf,
Thomson and Schlenker, 2011). This strategy is important because by applying this strategy firm
can focus on market expansion, technology advancement and cost leadership. If Silverstone will
pay attention on market expansion then it will be able to increase its business rapidly. On other
hand, cost leadership will make available sufficient amount of money to the firm which will be
used to pay debts on time. Technology advancement will also help in wining a contracts. Hence,
this strategy is feasible and can be implemented by the firm. Thus, this tactic will help firm in
market expansion and will be beneficial for itself (Chang and Yuan, 2011). Due to this reason
this tactic has a due importance to the firm.
Implementation plan Determining responsibility- This is the first stage of implementation plan under which
first of all employees are selected that will be responsible for the implementation of plan.
These employees are divided in to several teams and objectives of all these teams are
determined in proper manner in order to make sure that plan will be implemented in
proper manner. Develop metrics throughout the plan- In the second stage a metrics is prepared in which
parameters for different stages of implementation plan are determined in order to make
sure that plan will be implemented in proper manner. Identification and resolution of issues- In the third stage issues related to
implementation of plan are identified and resolved. In this regard deep roots of the
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problem is identified and cause and effect relationship is used to identify the solution of
the problem. Instruct and educate throughout the plan- In this stage work will be allocated to the
teams. One team will do work related to the cost leadership and second team will focused
on technology advancement. Whereas, third team will implement plan related to the
business expansion. The way in which these teams needs to work will be teaches to them
by the team leaders. In this entire plan will be implemented at the ground level in proper
manner.
GANTT chart
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Illustration 1: GANTT chart