Essay Example: Options Analysis for Toronto Ultimate Club

Introduction

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This is a very important report which seeks to provide strategies in which Toronto Ultimate Club can improve its slow growth in membership. This is a company that involve in the growth of sports of ultimate Frisbee. It achieves this by providing leagues in Toronto city. Current rate of growth of membership is still slow and therefore the management of this company stills want to understand the best course of action that they can use to increase its membership. This report is therefore aimed at providing both financial and non financial analysis that ensures that the understanding of the growth of the company can be understood. The problem of this club is that it is losing its market shares to its competitors and therefore it is important to create marketing plan which is able to provide recommendation to directors on how to improve its membership above its competitors.

Description of Toronto Ultimate Club

This club was started in 1980 by Ultimate Frisbee players who had the desire to improve this sport activity in Toronto City. It is a non - profit making organization but aims at improving this sports activity in the region. The annual growth rate of membership has been at 30% which contradicts expectation of 1000 membership in 1997. Current milestone is 3000 membership annually and this club could not still able to meet this set standard. It therefore has to develop strategies which are able to increase its membership to gain higher competitive advantage than its competitors.

Financial Analysis of TUC

The decision criteria of this company are to increase the membership by 15% and also to increase summer league revenue by 10% on fiscal 2009. This will increase profitability of the company based on market share metrics, promotional profitability, and new product forecasting and income statement. All these options are used to evaluate the viability of TUC if it is able to provide appropriate returns to its members although it is a non –profit making organization.

Market Share Metrics

This option also contributed significantly in increasing TUC membership by 15% and revenues by 10%. This is because it increases awareness about the club by constantly updating the website of the club so that more people can be interested on the activities of the club which eventually attract them to join. The use of website also acted as a promotional tool where members could receive registration information and also enable the management to receive feedback about the club which they can use to improve the organization hence attract new members. Formation of partnerships with other organization also contributed significantly to the growth of this club. This is reduces the growth rate but increases membership beyond 3000.The only problem of this strategy was that it is very difficult to find appropriate partner which is able to finance the club to create public awareness. The use of viral marketing also worked for this club as it offered various demonstrations in different venues. This promotional strategy makes different people to observe the way this sport is played. Through this they develop the desire and interest in joining the club.

Product Change Options Analysis

Change of the product is also a very important strategy which is able to improve membership and club revenues by 10%. Since this club operated under standard competitive rules, change of this rule is also able to improve the success of this organization. The club also has the option of addition a beginner leagues. This is able to increase the number of membership because there will be a need to increase the number of members. Since this change is able to attract new membership, it is also able to increase the revenue of this organization by 10%. The introduction of both male and female leagues is also a very important option. It will therefore ensure that this sport captures people from all gender groups. Because of this, it will increase the market share of the organization which is essential in increasing the organization revenues at the end of each financial year. The only issue that can result from these changes is the increase in the cost of managing all these sports activities but when it is compared to the benefits, this organization will be able to get higher profit margin than before introducing the change.

Price Change

Price change is also a very important option that can improve the success of this club. The reduction of prices is able to attract more members and ensure that more people receive membership of this club. The increase in price is able to reduce the number of players joining the club but it is able to increase the overall revenues of the company when the membership remains constant.

Computation

Once the management had invested $20000 in facebook for advertisement purposes, it is important to use the balance in EDGE ratio ($20,000 *1.25) = $25000 CAD. This was meant for EDGE radio promotion contingencies. To evaluate this, it is important for this organization to invest $20000 so that it can know the reaction of facebook users on it. In case there is success, the whole amount should be invested in it so that the company can reap the whole benefit but when there is no benefit, this company should resort into contingency plan. The use of facebook for advertisement is able to attract almost 1538 members when it is done through CPM. This will generates (1538 x118.33) – 50000 =$131991. It is possible when a special facebook promotion is used as it may maintain temporary growth.

High quality service in GTA

Change into US dollars $50,000/1.25 = $40,000

The organization targets members between the 20-24 years of age. When we assume that 0.5% sign up

The budget of bus interior is $50,000 and there is only 465 million years ridership on TTC. The target market for this organization is young people between the ages of 20-24 years. Since 6.9% are in that age therefore x 6.9% will sign up. When it is assumed that 0.2% registered as new members, the prediction for new members will be

Our expectation for outdoor market is 20-25 ages with more than 800000 weekly viewers. 72% of the respondents believe that half of population is of the age between 20-25 years and this is only 36%

Operating budget for 2008 was $500,000 and the board accepted to remit between 5-10% of the operating budget. The promotional budget for the same period was also $50,000.

This will have an effect on this organization market shares and also its growth rate. This is because TUC will be able to start making a profit immediately it received a membership of 1978.

Competing system Rule
There are more than 300 other clubs in this city and the income of most people have gown down during summer season and this affected the revenue and growth rate of membership of this organization. This organization is also able to recruit 10000+ new players yearly and there are very many activities.

There are also only two seasons and the prices ranges from $333 - $476 per season.

Expected market segment target for this organization is 1000,000 * 22% * 20% = 44,000 readers

When 3% of the readers sign up the total number of people who will have participated in the prediction will be 44,000 * 3% = 1,320 members Toronto Star

When we assume that the management will commit only 8% of the budget and fixed cost = $500,000* 8%= $40,000. The only sources of finance which can be used included Recreational Sporting Club (RSC), Everyman Sports (Everyman) and West Side Sports (WSS)

Conclusion

It is important to select the option which is able to increase the membership of the club and also increase the sales revenues. For this one to be achieved, it is important to evaluate all the options provided so that the one which is cost effective and has more benefits will be selected.