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Market, Golf

An Analysis of “Competition in the Golf Industry” It is unknown when the video game of golfing originated, nonetheless it is believed that people started out playing in Europe throughout the middle ages. In the United States, golf was a sport mostly played by wealthy individuals until competitions began being televised. After that, golf has exploded to be a very lucrative sector with above 27 mil golfers across the country by the end with the 1990’s.

“Competition in the Golf Equipment Industry, ” a case study written by David E.

Bet of the University or college of Southern region Alabama, is definitely an overview of the problems presently facing main companies in the golf equipment sector: technological limits (due to golf’s governing organizations), a decline inside the number of golf players, and the states, and the danger of counterfeit products. These limitations will be causing leading competitors inside the golf sector, namely Calloway Golf, to rethink their particular strategies completely. PLAC Research for Calloway Golf Ely Reeves Calloway Jr., Calloway’s original owner, CEO and President, bought a manufacturing company of hickory shaft wedges and putters in 1983.

Calloway, originally restricted to reproducing antique golf sets, has prolonged its merchandise breadth through the golf equipment market. Calloway Golf now encompasses drivers (with the introduction of Big Bertha), putters (with the acquisition of Odyssey), irons (designed to be competitive against Titleist), golf balls (with the acquisition of Top-Flite), footwear and garments branding, and GPS units (with the acquisition of UPlay). See Schedule in Appendix 1 . Calloway has differentiated itself from the competitors by its development, beginning with the success of their driver, Big Bertha, which initiated the technology race amongst firms.

Calloway and its’ competitors present more progressive products just about every 12-18 a few months to remain competitive. Furthermore, Calloway has acquired several organizations since its origin in 1983 in order to increase its item breadth. Even though in 2009, Calloway Golf Business was the “second largest vendor of motorists and fairway woods, ” revenues include declined by 17% in 2009 compared to the first six months of 2008. Difficulties facing this firm will probably be assessed in the SWOT examination. SWOT Analysis for the golf market, Calloway Golfing , Suggestions See Appendix 2 for Matrix Strengths:

Calloway’s technology in making a driver that pushed the limits of USGA standards reveals motivation for being the best. Promoting to recreational golfers so that they can help them take advantage of the game even more by offering an opportunity to drive 6-10 yards further was a standard and forced Calloway’s merchandise to the best golf merchandise of the century by a two-to-one margin. Calloway’s recognizable term also gives them a competitive advantage. Weaknesses: Although these scientific advances may possibly have increased sales, there may be still tiny evidence that these advances help golfers reduce their scores.

Another weak spot of the industry is durability. With the development of new products just about every 12-18 several weeks, it is crucial that companies industry their products and still have strong product sales shortly after introduction. Also, a weakness with Calloway’s baseballs was their particular brand photo with the purchase of Top-Flite baseballs, which quickly coined the overall game “Rock-Flight. ” Opportunities: Even though sales have got declined five. 7% during 2008, continued marketing attempts and outstanding a household identity could prove beneficial to all businesses after the economic depression has subsided.

Due to the economic downturn, discretionary spending has declined and savings has risen, but this might quickly alter after a submit the economy. Furthermore, Calloway has cut their particular endorsements of PGA specialists to only involve 10 in a number of PGA specialists and a few women. In the event they expanded these amounts, it would let them have more company exposure and perhaps higher profits since many fun golfers bottom their decisions on the type of equipment powerful, professional golf players are using. Dangers:

There are a number of threats impacting on the golfing industry as a whole: effects of technical limitations by simply USGA, a decline inside the number of players due to the overall economy and insufficient leisure time, and the rise of counterfeiting. Your the current economic climate paired with the decline inside the number of golf players, has induced companies to concentrate more upon price and volume. Counterfeiting is largely attributable to the decisions by business owners to outsource for less expensive labor to manufacturers in China, that can produce a club for less than $3 per team. Recommendations

Companies currently working within the golfing industry, particularly Calloway The game of golf, must transform their current marketing methods and ways to withstand the recession and threats facing the sector. Although Calloway has a strong R, G department that tends to remain competitive with products and technology, there have been tiny results in reference to scores. It really is imperative that if companies are going to industry a product that can help golfers travel further and straighter that the results show this so that not to harm the brand term of a item.

Secondly, due to the decline in equipment sales and the range of golfers, prices are dropping and businesses are outsourcing to keep the volume had to remain competitive. Companies must be cautious and aware in order that counterfeiting can be reduced. This reduction would also let companies to reduce their pricing and still have more sales without the competition of these inexpensively priced knock-offs. In the example of Calloway, an increase in advertising endorsements could boost their very own sales as a result of brand identification. Calloway has recently fallen to second put in place the amount of sales of drivers.

In helping in cutting down on counterfeiting, cutting down prices, and increasing advertising endorsements, Calloway may have the opportunity to reposition themselves as number 1 in the marketplace. Appendix 1 Calloway Timeline 1983- Ely Reeves Calloway, Jr. purchased a 50% desire for a Temecula, California manufacturer and marketer of hickory shafted wedges and putters for $400, 000. 1985-Ely Reeves Calloway, Jr., chosen aerospace and metallurgical technical engineers to design the most technologically advanced golf sets. 1991- Intro of Big Bertha 1996- Purchase of Odyssey (leading brand of putters)