Ownership and Management:

by:

Weijing Weng

BUSI 1703

Oct 26th, 2017

Contents

Problem Statement……………………………………………………………………………………………………………….3

Situation Analysis……………………… …………………………………………………………………………………….…..3

Presentation of Options………………………………………………………………………………………………………..6

Decision Criteria…………….……………………………………………………………………………………………………..7

Evaluation of Options & Application of Decision Criteria………………….…………………………….…8-12

Recommendation and Rationale……………………………………………………………………………….…………13

Implementation Plan…………………………………………………………………………………………………………..14

Exhibit……………..………………………………………………………………………………………………………………….15

Problem Statement

The Kitchener Rangers Hockey Club (Kitchener Rangers) is an extremely well known non-for-profit franchisee in the local community located in Ontario. Steve Bienkowski is the chief operating officer and governor of the Kitchener Rangers. The Kitchener Rangers was successful in the short term, but Bienkowski was concerned about the demographic of individuals attending Kitchener Rangers games was ageing. Therefore, he wanted new people to experience their games and regenerate the customer base. Bienkowski needs a plan that would consider either short-term and long-term options for the organization to be more successful going forward.

Situation Analysis

Ownership and Management:

The Kitchener Rangers is governed by 40 individuals elected from the season ticket holders. Steve Bienkowski acts in an advisory role and manager of the Kitchener Rangers. Bienkowski is responsible for the daily operations, such as led the business activities of the Kitchener Rangers.

Current Strategy:

The organization’s current strategy is to make the Kitchener Rangers a stronger club by giving fans more exciting experience during the Hockey match. The Kitchener Rangers also provides free service (Ranger Express) for individuals attending the game, the bus will transport the fans from restaurants to The Aud. The Kitchener Rangers also had strong leadership and passionate community support and fierce demand for tickets. The Kitchener Rangers uses their achievements to regenerate more customer base, such as winning the Memorial Cup tournament twice. The limited season tickets could also increase customers’ expectations to the Hockey match.

Mission:

The mission in this case is to revitalize the customer base for increasing the variety of the customers, because the customers were ageing. It is their job to provide even more exciting experience for the community and the fans.

Current Markets:

For a Hockey match, fans would be considered as the customer base. The fans base appeals to upper-income level customers, with 50% having a family income over $100,000 and 55% having post-secondary education. There are two main age groups of the Kitchener Ranger’s fans. More than 80% fans aged above 20 and 44% of fans were 35 to 59 years of age. There is also an increasing trend of women playing hockey, gender distribution of fans would grow equally in the future.

Competitions:

The Kitchener Rangers competes against with the overall entertainment business in Kitchener-Waterloo, this is to say competed for entertainment dollars. This business is somewhat seasonal which attendance was lower in fall due to the volume and local entertainment events. Ice Hockey is regarded as a winter sport, which means this is not a trend during spring, summer and fall. To ensure that The Kitchener Rangers still has the customer flow, Bienkowski must pay close attention to the activities or promotions to generate the customers. Another competition is The Kitchener Rangers has the second highest attendance right behind the London Knight, because the London Knight had a larger arena which could hold more people.

History:

The Kitchener Rangers was formed in 1963 and a ‘farm team’ for New York Rangers was facing bankruptcy. Entrepreneur Eugene George was about moving the team to Kitchener Rangers. On October 1st, 1963, 54 hopefuls to the Kitchener Rangers training camp begin the team’s first season operating in ‘A’ League. The ‘farm team’ are voted to dismiss after 5 years’ operations. The Kitchener Rangers have done many achievements to prove their strengths. For example, 136 team members in Kitchener Rangers are moving on to play in National Hockey League, and the team has set attendance records for 11 consecutive years with an excess huge population for 175 consecutive games covering over the five seasons. In November 2015, there were also 25 players on the Kitchener Rangers’ roster.

Financial Position:

The Kitchener Rangers played at the Kitchener Memorial Auditorium Complex (The Aud), but the Kitchener Rangers did not own the place . The Kitchener Rangers borrowed $9.6 million from the city and the Kitchener Rangers would have to paid back $12.2 million over 16 years, which means the organization must paid back $762,500 per year. Regular season revenues were $6,400,000 with a surplus of $50,000. The only revenue received from concessions, a food service provider was 10% of beer sales. More than 50% of the revenues primarily come from ticket sales for games. Corporate sponsorships also provided a large percentage of the revenue to Kitchener Rangers, including digital and print signage opportunities. And the organization might receive the first $350,000 from the executive suites created in 2003. There are two major expenses, rentals and bus service which costs 19% of the revenues per year compared to the average of 10% and $75,000 respectively.

Industry:

The Kitchener Rangers is part of the sports and entertainment industry. 90% of Canadians hockey was their cultural fabric. The economic activities related to the hockey was worth over CA$11 billion annually and expecting to increase in the following years. Approximately $2.6 million will affect the economy directly to the hockey industry, because hockey-related tourism is highest in small towns and villages according to the Exhibit 2.

Key Success Factors:

The most successful firms in the industry are providing an exciting experience for the community and fans during the games. The Kitchener Rangers often worked in the flavour of the local community and the fans. The Kitchener Randers’s competitive advantage is to provide free service for the individuals attending the games. Ranger Express is the free service that the Kitchener Rangers provided, but it will cost the Rangers $75,000 per year. This helps more customer flow to the Kitchener Rangers. Therefore, it brings a stronger community support.

SWOT Analysis:

Strengths

· The Kitchener Rangers is extremely well-known in the local community, which helps reducing the marketing, advertising expenses.

· The Kitchener Rangers had passionate support from local community and fierce demand for tickets.

· The Kitchener Rangers were doing successful in short-term.

· -The Kitchener Rangers located in an older neighborhood in Kitchener, it was only 5 minutes driven from downtown and 20 minutes driven from Laurier and Waterloo University.

· The Kitchener Rangers has the second highest attendance of 6,992 attendees on average.

· The Kitchener Rangers provided free service (Rangers Express) for individuals attending a game from a certain restaurant to The Aud.