Callaway Golf Case Study

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

Callaway Golf Company (CGC) excelled in designing, development, manufacture and marketing of Golf clubs and accessories. Established in 1982, the publicly traded company recorded a steady growth in sales from $5million in 1988 to $800 million in 1997. This was possible due to clarity in vision of its CEO Ely Callaway, which was aimed at making a satisfying product which was uncommon and enjoyable for the average player rather than professionals. The revolutionary clubs were sold to professional as well as average players at premium prices driven by the high performance delivered by them.

Golf ball manufacturers would be looking to achieve several key strategic goals, such as increased sales, increased market share and / or increased profitability, to adopt and implement PI’s technology. Accordingly, manufacturers are mainly concerned with the cost and implications on manufacturing, competitor reactions (and customer perception), the forecast growth in the new balls market, the share they could capture and the financial details of agreement.

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.

Callaway Golf Company’s (CGC) had seven key success factors to include: the founder’s vision; product design; pricing; product development; sales; marketing and the media.

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

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

Ely Callaway founded Callaway Golf Company in 1982. In the early years, the company was named Callaway Hickory Stick USA, Inc. and specialized in hickory shafted putters and wedges. In 1988 the name of the company was changed to Callaway Golf Company. In the '90s, Ely Callaway and his company changed the golf industry in ways no one could have anticipated. Richard Helmstetter and his R&D department found a way to create a stainless steel driver that had a larger and more forgiving

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.

If this technology were universally adopted by all manufacturers, there may be benefit to the industry as a whole. However, value brand manufacturers feel that brand image might be tarnished by concern about consumer’s “infringement on their access to cheap used balls.” Additionally, high-end manufacturers’ sales, which represent 67% of total new balls market, will be reluctant to adopt the technology due the belief that the consumers may buy new value brand golf balls rather than their own premium brand golf balls.

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

Callaway's strategic success in 1988 to 1997 is highly credited to its R & D facilities. Their approach toward innovation and technology provided a cutting edge against the other competitors in the market. The way Callaway was able to continue their differentiation features was through their highly

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.

Companies currently operating within the golf industry, specifically Calloway Golf, must change their current marketing approaches and strategies to withstand the recession and threats facing the industry. Although Calloway has a strong R&D department that tends to remain competitive with products and technology, there have been little results in reference to scores. It is imperative that if companies are going to market a product that will help golfers drive further and straighter that the results depict this so that not to damage the brand name of a product. Secondly, due to the decline in equipment sales and the number of golfers, prices are dropping and companies are outsourcing to maintain the volume needed to remain competitive. Companies must be cautious and aware so that counterfeiting may be reduced. This reduction would also allow companies to reduce their pricing and have more sales without the competition of these cheaply priced knock-offs. In the instance of

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