SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong Overview of the Case

The Asiasport management wants to develop ice hockey in Hongkong and the decision to promote hockey outside the Hong Kong, its choice of sports property and the implementation of plan and strategies are the key issues or problems of this case. Tom Barnes, executive director of Asiasports Ltd was evaluating several options for growth for the sports management company. Determining the Future Business Strategy of Asia sports, the primary decision makers of Asia sports found themselves at a defining moment. Barnes, Weir, and Gribble had to make decisions about whether the company should promote hockey outside of Hong Kong and its choice of sports properties. An implementation plan also had to be developed for the chosen strategy. Although every one of their sports properties was profitable except for the World Ice Hockey 5s event, Asia sports still experienced a loss in 1998 operations. Therefore Barnes and the primary shareholders of Asia sports were faced with a difficult question regarding the direction of their future business strategy. Should they continue to focus on developing their existing sports properties and working towards Barnes goal of bringing hockey to Asia, or should they explore options related to geographic and product diversification. A firm Analysis Asia sport was started as a sports management company to develop the growth of hockey in Hong Kong. Asiasports managed leagues and events in relation to hockey, as well as other sports such as softball and golf. The company is privately held, and it was a young entrepreneurial company that had the financial and human resources constraints typically face by such companies

Issues in the case

Following are some of the issues involved in this case: Its choice of sports properties despite competition from other sports management companies An implementation plan also had to be developed for the chosen strategy. To make decisions about whether the company should promote hockey outside of Hong Kong and its choice of sports properties.

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SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong

Promote hockey inside Hong Kong and other parts of Southeast Asia despite of slow

growth/popularity in hockey Although every one of their sports properties was profitable except for the World Ice Hockey 5s event, Asiasports still experienced a loss in 1998 operations. Therefore Barnes and the primary shareholders of Asiasports were faced with a difficult question regarding the direction of their future business strategy. Should they continue to focus on developing their existing sports properties and working towards Barnes goal of bringing hockey to Asia, or should they explore options related to geographic and product diversification? Several options such as geographic and product diversifications, as well as increased focus on existing products existed for Asiasports. Barnes wanted to popularize hockey in Southeast Asia but he also wanted to seize opportunities, considering the options, to keep the company alive. But Asiasports cannot deny the fact that they have limited financial and human resources.

SWOT Analysis
Strengths Primary strengths are its sport properties and experience in running tournaments in Hong Kong. Asiasports was a sports management company where they carried out a variety of activities

as organization of fund raisers and sport event design and development. It helps in strengthens the financial foundation.
Experience in running tournaments in Hong Kong

Weakness Asia sports being new, faces numerous financial and human resources problem.
As stated in the case all of the hands on work for the company were done by Barnes and his

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SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong

assistant. Due to which there is more for mistake in day to day operations. The derivation of the revenue for Asiasports was primarily base on the player fees and sponsorship income, its more like a trial and error chances. Lack of human resources Low profitability Opportunities The strength of local consumers Expansion of existing ones Geographic and product diversification International growth Barnes had the autonomy to make day to day operating decisions, which makes to have a swift decision making to take hold of any time bound opportunities. Threats Competition from other sports management companies Competition in the arena/ sports ground of hockey The ice hockey had to develop at Grassroots level where without training at young age, gives threat to those who want to play at adult life. Whereby the interest in adult diminishing. Hockey itself did not have as high a profile in Hong Kong as other sports such as horse racing, soccer and tennis.

Resources competitive analysis

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SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong

The two primary source of the revenue is through the player fees and the other is from sponsorship. The 50% of revenue are from player fees and the remaining 50% is from the sponsorship. In return the Asia sport is able to contribute to the sponsoring companies at the time of tournament and league trough name placed on the players sweaters. The sponsors had increased to 50% from 1996 to 1999 with increase in players fee from 20% to 25%.This indicates the growth of the company. The company was still young and in the entrepreneurial stage. The company lacked both in terms of Financial and human resources. The company had to make use of volunteers comprising hockey league members and their families. All the hands-on work was done by Barnes, the executive director and his assistant Keith Fong. And its financial resources were limited to the pockets of Weir, Grabble and Branes, which were not exceptionally deep.

Financial Analysis
Asian sports had only two primary sources for generating revenue which are:
i.

Player fees: For the majority of Asiasports activities conducted in Hong Kong, player fees represented 50% of its income.

ii. Sponsorship income: The other 50% came from sponsorship income. The main sponsors

were Budweiser, the SUNDAY network, Nortel networks, the Hong Kong Yellow Pages, Caltex and Jack- in- the- Box. From my point of view I think that the income generated from sponsors and players fee plays a critical role in adding to the profit of the company. More over Asian sports gave the sponsoring companies exposure, so these techniques will definitely help in generating more sponsors for the company.

External Environment Analysis

The external environment consists of Opportunities and Threats, which are outside the organization and not typically within the short-run control of top management. Therefore the external environment analyses for Asiasports Company were as follows: Opportunities

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SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong

International growth Geographic and product diversification Partnering with prominent international hockey associations such as NHL and IIHL Increase in the number of potential participants with the introduction of new sports by the company.
Asiasports also have the opportunity to set up similar hockey leagues in Bangkok, Manila,

Taipei, Singapore and Ho Chi Minh City. Threats Competition from other sports such as horse racing, soccer and tennis Slow growth/popularity of hockey in Hong Kong and other parts of Southeast Asia No serious attention from international hockey associations such as IIHL about ice hockey in Hong Kong
The biggest threat of Asia sports is that, it has to compete with other sports management

companies in Hong Kong when Asiasports promote non-hockey sporting events such as softball or golf.

CAGE distance framework analysis

Cultural: Hockey is not a lifestyle of Hong Kong and other parts of Southeast Asia. Hong Kong is into other sports such as horse racing, soccer and tennis. Moreover hockey is played informally in Hong Kong, so it did not have as high profile as other major sports. But the popularity of hockey in these countries are picking up. From which we can say that playing hockey is the culture of the Hong Kong. Administrative: The government of Hong Kong and other Southeast Asian Countries are not doing much to promote the sport. Southeast Asian countries had seen slow growth in hockey compared to the more northerly Asian countries. No national bodies organized the sport of hockey in these countries.

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SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong

Geographic: The opportunity was setting hockey league in Bangkok, Manila, Taipei, Singapore and Ho Chi Minh City where they possessed a viable rink on which hockey can be played. Moreover Gribble had done background research on establishing hockey in Taipei. The ice hockey is mostly suitable for northerly countries compared to southern countries. In-line hockey was the only option for south. But in-line hockey was not suitable either in Hong Kong because of the danger caused by the crowded roads and steep inclines found on many roads.

Key success factors

Following are the key factors that contributed to the success of Asian sports. People have shown so much interest in the Asian sports which helped them to generate income for further growth and expansion. Another key success factor of the company is from its two primary sources of revenue that is player fees and sponsorship income. With the expansion of existing ones and addition of new facilities Asiasports Company has attracted lots of interested people which have contributed revenue for the company thereby becoming a successful company. SCHIL is another key factor that contributed to success of the Asian Sports. SCHIL helped in attracting large number of players which helped towards increment of the profit margin of Asia sports.
Most of the women are taking keen interest in hockey especially in china where they also

have taken the third position in the world events. Another factor that contributed to the success of Asian Sports is the growing number of audience. Many people came to watch the sporting events that helped in maintaining good financial position of the company.

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SM Case Study #02 ASIASPORTS: Hockey Night in Hong Kong

Recommendations/suggestions
As the case is all about the Asiasports Hockey night in Hong Kong, with detail information how it got started and the current situation. So I would like to recommend following points to Asiasports:
They need to come up with more tournaments to acquire more sponsorship.

For the betterment of the company they should have more number of decision makers.
The company should promote hockey outside Hong Kong when they are more financially

stable. If the company could give equal importance to those non hockey sports too then the company could generate more revenue. Asiasports should indulge in various promotional activities to infuse excitement, attraction and participation in hockey among both adult and children. Asiasports should tie-in with NHL and IIHL to promote the sport and sell their merchandise. Asiasports should encourage national bodies to organize the sport of hockey in Southeast Asian countries. The Asia sports management company was run by the fund from the sponsorship and players fees. It should have established as government Company, so it can be run by the government budgets.

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