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... 1 Evolution of the Golf Equipment Industry
• Popularity and Sales
• Technological Innovations
• Extent of competition
1.2 Callaway Golf Company
• Strategy and Success
• Challenges faced
2. Analysis of Golf Equipment Industry
2.1 Porter’s 5 Forces – Industry Competition
• Industry Structure
• Consolidated (non-price competition)
• Increase in Demand
• Increasing supply of technologically advanced golf equipment, hence little influence on rivalry. ...
• Callaway’s Competitors
• Direct competitors (Karsten Manufacturing’s perimeter-weighted Ping irons and TaylorMade’s Bubble shaft) due to their track record in product innovation and strong brand recognition.
• Indirect competitor (Cobra Golf Company) due to inferiority in terms of quality and technological advancements compared to the Callaway product line. ... 4 Porter’s Five Forces – Buyers
• Low volume per customer
Most golf players do not purchase large volumes relative to seller sales. ...
• Differentiation of Golf Equipment
Differentiation of technologically advanced golf equipment sets one apart from the others in terms of design and features. Golf players will thus face difficulty in finding alternative suppliers for a similar golf club, causing them to be susceptible to bargaining terms. ... Experienced players who are used to a certain brand of pro-line golf clubs will be reluctant to fork out time and possible disappointment in their games following a switch of brands. ...
• Switching Costs
Due to the complexity of pro-line equipment, golf players who got used to one brand of clubs would continue to stick to it. ... 6 Porter’s Five Forces – Complementors
• Golf Balls
Increase in sales of golf balls does not necessarily increase sales of golf clubs. Hence, effect on profits and golf clubs is insignificant.
• Golf Course
Following a reduction in club memberships and golf lessons, this might encourage more people to take up golf, driving up sales of golf clubs and consequently, profits.
• Golf Accessories
Golf accessories include of bags, grips and head covers. Due to their relatively low prices as compared to golf clubs, an increase in sales of accessories often does not lead to an increase in demand for golf clubs. ...
As shown, the only complementary product identified to have an effect on profits and sales of golf clubs is the golf course. ... 7 Summary of Golf Equipment Industry
The table shows a company’s ability to compete in the industry. ... Critical Success Factors of the Golf Equipment Industry Relative to the Other Sporting Equipment Industries
3.1 Ability to Charge Higher Prices
The golf industry came up with 4 key technological innovations, making the game easier for the beginners to learn and improving the experienced player’s game. The proportion of golf equipment sales out of the total equipment sales has been increasing throughout the years (Table A), which could be attributed to the higher prices commanded from the technological innovations. ... 2 Backward Vertical Integration by Callaway and Cobra Golf
By designing and producing the graphite shafts in-house, the two companies were able to gain significant cost savings, hence increasing the profit margins. ... 3 Great Marketing
The endorsements of these professional golfers increased awareness of the different brands of golf equipment available through watching golf tournaments on television. ... 1 Changes in the Number of Golfers and Golf Courses
There was a 24.
Approximate Word count = 2639
Approximate Pages = 10.6
(250 words per page double spaced)
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