Entrepreneurship in Business
We have laid the foundations for a theoretical model to describe the marketing process and entrepreneurial activity. This case study will provide you with an opportunity to apply these theories within a practical marketing situation.
PART A: SITUATION ANALYSIS (15%)
The External Environment (Macro/Micro)
Discuss the marketing environment for an event such as Tough Mudder. In particular, look at the changing environment and the changes that may have led to the popularity of an event such as this. What changes may occur in the next five years? What are the main opportunities and threats for an event such as this? Please complete a SWOT (Use the research literature in the area of the environment to justify your response). Use Michael Porters 5x Forces as a basis for this task. Market Segmentation and Consumer Behavior Building on the work that you have done in the previous section develop a segmentation analysis for the Tough Mudder events. Look at the profile of the people who are participating in the event and look at the people who may participate in the event in the future. Discuss the positioning of the Tough Mudder event in the Australian market. Choose one aspect of consumer behavior from the list below. Discuss how a competitor organization may use an understanding of the effect of this consumer behavior aspect on consumer decision-making. Discuss how the competitor organization could develop a product with greater appeal to the new target markets developed in Part B, or encourage greater participation in the event. For example, x learning x motivation x reference groups x personality x family x attitude x culture and subculture.
PART B: COMPETATIVE STRATEGIC EVALUATION (15%) In this part you are required to use the information in Part A and then develop and justify an alternative viable Blue Ocean strategy approach(s) to compete against Tough Mudder Events if it were to set up business in Australia. To successfully complete this component you must undertake research into the potential to set up a viable competitor to this event in the Australian market. What research would you undertake and how would you undertake this research? Indicate your projected budget for undertaking this research. Also you must be able to demonstrate at least a clear understanding of the application of competitive strategy and Blue Ocean principles and methods to this market. To achieve higher grades you must be able demonstrate a realistic and viable (both logically and financially) Blue Ocean opportunity which is consistent with the theory.
Assessment supporting guidelines. You will need to draw upon the research literature. Theory, rather than contextual factors should drive your response. Do not simply provide your opinion. Draw upon the material that you have learned in this unit, as well as research that you have conducted specifically for this assessment task. Students who simply use material supplied to them through this unit will receive low marks.
You will need to draw upon the research literature. Theory, rather than contextual factors should drive your response. Do not simply provide your opinion. Draw upon the material that you have learned in this unit, as well as research that you have conducted specifically for this assessment task. Students who simply use material supplied to them through this unit will receive low marks.
Assessment format Your assessment should be submitted as a Word document. There is a prescribed structure for your case study (i.e. cover page or table of contents required). 3000 +/- 10% words is the limit for this assessment task. Students will be penalized for non-compliance. The word limit includes all text that forms part of your answer to the case tasks, i.e., material that you wish the assessor to read. This includes tables, figures, and appendices. Note that the reference list is not included in the final word count for this assessment task. A complete citation of all work/research of others referenced in your report should be included in a list of references. Any reference to theory or to factual information must be cited (using the Harvard system).
TOUGH MUDDER – NOT FOR THE FAINT HEARTED (ADAPTED BY BRENTON PRICE FOR BUS827) Tough Mudder has a rather interesting and quite surprising genesis. As part of his Harvard MBA, co‐founder Will Dean entered the concept in the business school’s 2009 Business Plan Contest. While his idea made the final event, it did not win. Faculty feedback indicated that there would not be enough demand to run an event let alone find people willing to pay for the privilege of participating. Since 2009, the idea has definitely found traction and is now considered a global phenomenon. Along with business partner Guy Livingstone, and starting with $8000 worth of Facebook advertising the company has grown to nearly 70 planned events worldwide in 2014 and 50 planned events in 2015 (including events in Melbourne and Sydney) worldwide in 2014, having welcomed its one millionth Mudder in 2013, and celebrating 5 years running in 2015. More than 1.3 million people have participated in Tough Mudder events. The positioning of Tough Mudder is undertaken very carefully, and in fact it is not a race but a challenge. Dean had tired of the focus on the individual in endurance races and so decided to develop an endurance challenge that required teamwork to complete. Races have winners, but the challenge here is to finish the course, and so no times are recorded. Mudders are strongly encouraged to work together and help one another out, a spirit reaffirmed before each event when participants recite the Tough Mudder Pledge: x I understand that tough mudder is not a race a challenge x I put teamwork and camaraderie before my course time x I do not whine – kids whine x I help my fellow mudders complete the course x I overcome all fears Source: http://toughmudder.com.au/about/ A further interesting aspect of Tough Mudder is that participants sign “Death Waivers.” The experience of Tough Mudder lays in the event itself and the bonds that are formed between participants. When you risk your life to complete a 20km challenge for the fun of it, you tend to bond with your fellow participants. Great attention to detail is paid to create courses that foster teamwork. Each Mudder course is approximately 20 kilometers long, and each course layout varies by location. The exact design of the course is kept from participants until the day of the race; however, each course contains a series of approximately 25 obstacles that are designed by ex-British Special Forces soldiers. Some examples from the 2012 series include the Arctic Enema (swimming through a dumpster filled with icy water), Electric Eel (crawling through ice and mud, all the while trying to avoid live electrical wires overhead), Everest (scaling a mud and grease covered half‐pipe), and Mud Mile (traversing literally 1.6 km of waist‐deep thick mud). As can be seen from the following media description of the Scottish course, these events are not meant to be tackled alone. “Participants were challenged mentally and physically as they navigated their way over more than 20 obstacles including 12ft walls, across muddy trenches, through 4ft flames and into icy water. They also braved their way across about 100,000 gallons of mud and through pits of stinging nettles, waist-high swamps and claustrophobic tunnels, as well as receiving 10,000 volts of electroshock therapy before crossing the finish line.” Source: http://toughmudder.com.au/event-‐photos/tough-‐mudder-‐events/ Merely completing a Mudder challenge is an achievement in itself and so it is not surprising that the event has gone global with the aid of social media. Participants post photos to their social media profiles and share stories with friends and other Mudders. The vast majority of participants learn of the event through word of mouth, although this is now changing with the increased media profile of the event. The Mudder Facebook page has over 4 million fans, with the Tough Mudder Australia Facebook page noting over 380,000 fans as of June 2015. The event worldwide has 1.3 million participants (70% male). At the finish of each course participants may choose to have a permanent memorial tattooed onto their flesh in celebration, with tattoo artists standing by to help. Australian participants part with an average of $145 to compete, but if they finish the course, and only if they finish, they receive a Tough Mudder Headband and T‐shirt, a beer and bragging rights (all of these are priceless). The Melbourne event(s) planned for October 2015 will be held on the Philip Island GP track and will contain approximately 25 major obstacles for participants to negotiate http://toughmudder.com.au/obstacles. In addition, the death defying nature of Tough Mudder attracts both major print and broadcast media coverage, even gaining mainstream news coverage having featured in The Age, The Sydney Morning Herald, Sky News and ABC news services. With a large build up and a strong following, the event is a prime target for sponsors. The fact that the average participant is a 29‐year‐old male with an income of $80,000 only increases the attractiveness of the brands. Organisers have been careful to cultivate sponsors that align well with the event and its participants. One early sponsor was the Dos Equis beer company, which signed a two‐year deal in March 2011 to provide the free beer that every participant receives at the end of the race. The sponsorship leverages on the Dos Equis’ “The Most Interesting Man in the World” campaign. www.youtube.com/watch?v=U18VkI0uDxE Degree Men, an antiperspirant and part of the Unilever family of products, came on board in September 2011 and fits well with what is certainly a sweaty endeavor. www.thesportsbusinessexchange.com/2011/09/degree-‐men-‐tough-‐mudder This is a nice alignment as Tough Mudder state that they want their participants to stay fresh throughout the course. Additionally, the face of Degree deodorant is well known adventure junkie, Bear Grylls. As part of their sponsorship deal, Degree Men will have a branded obstacle at each event (currently named after the new Everest scent, it comprises a mountain of snow that must be scaled) and be given rights to distribute samples and connect with participants. Under Armour became Tough Mudder’s most recent new sponsor in December 2011, signing on as their official outfitter. The deal includes rights to all Tough Mudder clothing, their own branded obstacle, and creation of an Under Armour training regime. Tough Mudder also aims to align with causes that might resonate with their participants. In 2015, Tough Mudder Australia has linked with the charity ‘Soldier On’, a program that supports injured service men and women. The website promotes the brand alignment by way of stating: “We will be hosting a team of Soldier On members at every Tough Mudder event. They really show us what it means to overcome ALL obstacles. Look for participants wearing the Soldier On gear at our events” www.toughmudder.com.au/soldier-on The event continues to grow and more and more people continue to accept the challenge to see if they qualify as Tough Mudders. This company is an example of persistence and the entrepreneurial spirit, but also of understanding the latent demand in the market for a product.