Callaway Golf Case Study

It is unknown when the game of golf originated, but it is believed that people began playing in Europe during the middle ages. In the United States, golf was a sport primarily played by the wealthy individuals until tournaments began being televised. Since then, golf has grown to be a very lucrative industry with over 27 million golfers nationwide by the end of the 1990’s. “Competition in the Golf Equipment Industry,” a case study written by John E. Gamble of the University of South Alabama, is an overview of the problems currently facing major companies in the golf equipment industry: technological limitations (due to golf’s governing organizations), a decline in the number of golfers,

Looking at the market we can see that Golf Companies have suffered after the 2008 recession. However, in 2012 golf ball market was $483 million in retail sales from 17.6 million units which was 4.1% growth from 2011, showing that there has been improvement in the market performance from companies that had lower prices for golf equipment as people were willing to spend on their product. However Altius could not regain

Their target market is an average golfer, but they should also target good and experienced players, who are the

The overall commercial market is much smaller than the consumer market. Golf courses account for $950 million, and commercial housing $118 million for a total of $1.068 billion. Golf courses will have to be sold on the idea that a new product from a new company will be able to save the course money in irrigation and fertilizing fees, and that it performs as advertised. It can be costly to persuade golf course keepers to switch from conventional

OPPORTUNITIES * Locations allows them to easily attract mall customers * Research indicates local population would patronize a new mini golf course * Competitors do not promote effectively * Alliances with other family oriented businesses

According to the porter's typology of corporate strategy (Richard, 2009). Suggests that corporate strategies can be categorized on two dimensions, based on whether the firm is seeking to be the low-cost producer of standards products or whether it is attempting to differentiate itself by having unique products or services. And the multi product case is not a competitive environmental one cause it shows that people who want the product will generally be willing to pay what it takes to get it and it will have a fixed volume and fixed price and nobody else will be able to manufacture a similar club, due to the patent protection. So the

While it would theoretically improve their individual performance, it would also limit their access to cheap balls by driving up the price for used balls, requiring them to purchase more new balls and drive an overall increase in their annual golf ball expenditure. Purchase figures show that the vast majority of balls used (171 out of 220 million dozen) are either found or bought used, meaning that the majority of golfers do not buy new balls. Accordingly, this majority would likely view the reduction in access to cheap golf balls and increase costs as an affront.

The U.S. Golf Association (USGA) specified the characteristics of legal balls within tight parameters. These restrictions on size, weight, materials, texture, etc., seemingly left little room for product innovation. In fact, the USGA regulations specified not just what went into a ball, but how it could perform, stipulating to within 10-20 yards how far the ball could travel when hit by a certain type of club traveling at a certain speed, all verified under controlled conditions with robotic testing equipment. Nonetheless, new product introductions were rampant in the industry, with slight changes in surface coatings and dimple patterns, for example, being touted for their ability to add a handful of yards to a golfer’s shots, to give more accuracy, or to create greater control through faster spin on the ball. In addition, ball manufacturers spent millions of dollars on advertising campaigns for their balls. There were three basic types of balls, all conforming to the same general specifications. The oldest technology still in use was the three-piece ball, which consisted of a core, windings, and a cover; this ball was good for spin and overall control. The second, and most popular, type of ball was the twopiece ball, which eliminated the windings of the three-piece ball; this ball produced more distance. The newest technology was the “solid core, multi-layered ball,” which had taken the

New golfers increased from 1.5 million to 3 million between 1988 and 1998, but most of them quit due to increased cost of playing which went up by nearly 50%, unavailability of courses and time involved in playing. The global premium equipment market declined post 1998 due to various reasons like decreased demand, Asian economic turmoil and saturation of product in the market place. To CGC’s benefit the competition on golf equipment

Callaway Golf Company is considered a leader of the golf equipment industry through its development of technologically advanced golf clubs that compensated for the most amateur players with poor swings and helping them achieve a better golf game with the introduction of Big Bertha in 1990 and launched Callaway Golf Company forward at great speed into notoriety of the golfing community (Gamble, 2000). This analysis will thoroughly dive into the many parts of the case of the Callaway Golf Company.

With the professional endorsement by these golfers, the target market was able to see the product in action and also learn how to properly use them. With practice, these average

founder of Callaway Golf Company turned the most-feared club into the most-loved almost overnight. The driver became the fastest-selling club at retail. Many innovations have followed. From woods, irons, and putters to golf balls and golf accessories, Callaway Golf has consistently used ingenuity, quality construction, and technology to make the finest premium products in the industry.

The decision for an individual manufacturer to adopt PI’s technology will be determined by the potential increase in sales as golfers replace performance degraded balls with their brand. It is reasonable to assume that individual manufacturers are hesitant to pioneer this technology because there is no assurance that a performance degraded golf ball would be replaced with their own. The data indicate that golfers are comfortable using used balls, or value brands. By removing approximately 50% of the used balls from circulation, numerous golfers may utilize the lower cost alternatives to fulfill their required quantities.

Unfortunately, the golf industry is out of balance with the number of courses (supply) outweighing the number of golfers looking to play a round of golf (demand). Course owners struggle to attract rounds. In order to stay competitive in today’s market, you need to have differentiators that set you apart from your competitors. This module enhances the golfer’s experience at those courses that have it and they have a decided advantage over the competition with all other things being equal. If you are looking to attract more rounds, use the Golfer Experience Module to make the round more enjoyable resulting in more rounds and revenue.

We have carefully looked at our external and internal environments. The external analysis looked at the market and the competition, while the internal analysis examined Callaway’s performance, as well as its customers. We also performed a “SWOT” analysis, enabling us to identify our strengths, weaknesses, opportunities, and threats. This analysis lends to the view that it is imperative that we change our existing strategy and focus on other markets. It is not suggested that we ignore our existing markets, but rather that we expand our customers and potential customers access to custom club fitting. I firmly believe that by pursuing this avenue, and by implementing and controlling the proposed fundamental marketing strategies and marketing mix strategies, we will be able to achieve the stated objectives.