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Callaway Golf Company

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Callaway Golf Company
Rajiv lal Edith D. Prescott

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Ely Callaway, Callaway Golf Company 's (CGC) 80-year:old founder, chairman, and chief executive officer, sat in the conference room one sunny day in fall 1999 contemplating his company 's remarkable story. He wondered how that story might continue in light of some recent internal and external challenges. In the span of a decade, Callaway had built CGC into the dominant player in the golf equipment business, despite charging premium prices. CGC sales had increased steadily from $5 million in 1988 to over $800 million by 1997 (see Exhibit 1 for income statements). He accomplished this with the clarity of his vision: "If we make a truly more satisfying product for the average …show more content…

Company History
CGC was led by Ely Callaway (pronounced E-lee), a powerful motivator who defined the company 's culture. People described the LaGrange, Georgia, native as charming, feisty, optimistic, energetic, and inspirational. A distant cousin of golf legend Bobby Jones, Callaway was a golf club champion at 20 and a three-handicap golfer at 40. In recent years he found that he did not have much time to play golf. He said, "I spend my time trying to put myself in the place of the average hacker and see how they will react to our new woods and irons."1

The Start of CGC
The day after he sold his winery in 1982, Callaway received a cold-call from the cashstrapped founders of a small golf manufacturing company named Hickory Stick USA, Inc. Callaway saw potential in the antique-looking, yet modern clubs, and decided to invest $435,000. He changed the name of the company to Callaway Hickory Stick, Inc. and focused on expanding the product mix. The designs were essentially knock-offs of existing companies ' clubs (the only difference lay in the hickory shafts); thus, Callaway 's first priority was to develop original products. Callaway put in $2 million of his own money over the first three years, thinking it would take the company eight to ten years to break even.
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Glenn Sheeley, "Callaway led golf 's charge out of the woods,"

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