Monday, April 14, 2008

Multiple Car Teams - When to Expand

Okay, this is going to be a topic that has been floating around in my head for a while now.

Here's the question; When does it make smart business sense to expand to multiple car teams? Given the fact that I'm an everyday spectator, and just happen to be pursuing my BSBA in sport management, I would have to say that it would have to be when the car(s) you have are consistently successful.

To me, it's common sense to make sure you have a successful formula before you franchise it. That brings up another question; Do some owners expand to multiple cars as some sort of status symbol?

It would seem to me that it would prove to be most counter-productive to field two, three, four or even more teams when the first one you have performs quite poorly. My stance is this; If you can't even afford to produce one successful team, spreading out the resources for more dilutes the effort. It's almost like a buckshot approach. Unfortunately, it doesn't always work out for the best.

But, to look at the other side of the issue, it's also quite possible that by fielding more cars, you provide a greater opportunity for more potential talent. Then, that raises the questions about the talent of the original team that was performing so poorly. So, what do you do then? If you fire the original talent, that may give them the opportunity to go to another team and prove the problem is with the hardware. If you keep the original talent, what does that do for the potential of growth for the teams? Then, the owner wouldn't realize it's the quality of the equipment that is holding them back.

Of course, this is assuming that the new cars are built new. There is also the possibility that the new cars, and teams, could be acquired from financially struggling, and individual, owners. In these instances, it would probably be more sound reasoning for the owner to expand to decently performing, if financially floundering, existing cars. For those cases, I could see the expansion as a good idea.

This brings me to the question of the post: When is it a good idea to expand your fleet?


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