Case Study of Callaway Golf Company Essays

Callaway Golf (ELY) operates in the Sporting and Athletics Goods Manufacturing Industry Segment (NAICS Code 339920). ELY’s operations are split into five primary segments: drivers, irons, putters, golf balls and accessories.

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.

A customer will be satisfied when they use a product that perfectly suits them. The world of golf is not an exception to that. Golfers are aware that the distinct design of a golf club could help make the ball move farther, straighter, and faster. The skill of the golfer is truly important but excellent craftsmanship matters as well. For that reason, Taylormade golf items are some of the most popular golf products in the market today. They are meant to make golfers have a better performance. Taylormade has always been successful in providing golf lovers with exactly what they need. Whenever a new club comes out, it surely offers certain improvement in design.

Golf company Taylormade has used this approach, offering different products some view as gimmicks or over marketed to now be one of the highest selling golf club producing firms within the industry. The challenge they face is knowing when to cease this practice and not over invest when the industry wanders into the decline phase of its life.

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

Callaway Golf's success story begins with a small three-person golf company called Hickory Stick USA, which was founded in 1982 in Temecula, California. The company initially made wedges and putters that had unique shafts constructed of hickory with a steel core. These clubs caught the eye of Ely Callaway, who bought an interest in the company the following year. Mr. Callaway had already been a successful businessman in the fields of textiles

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.

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.

This new concept became essential after a meticulous work in gathering information about general consumer’s needs. Marketing team has reached out to a younger generation though different channels of social media and social network such as Facebook, be it Twitter, MySpace and then internationally, High Five and Orchid (Video Case 9) to understand what type of technological breakthrough will satisfy potential customers’ need. Prince Sports, Inc Marketing team work directly with R&D team to combine and collaborate marketing knowledge and technological ability. Together these two teams have created an evolutionary O3 technology with a 24 percent faster swing speed than traditional frames. The explanation of why their technology works better than other brands is pretty simple: “The secret is in the holes”. Like all world-changing innovations, O3 technology is based on an ingeniously simple idea. By replacing traditional pin sized string holes with massive O-ports, Prince Sports created a class of racquets that move through the air faster for increase power and greater control. (Tennis Express, Online Store, http://www.tennisexpress.com).

Our town is notable for having several interesting golf courses. For those residents whose interests lie in other pursuits, those courses are a waste of large quantities of otherwise useful space that could be better used to construct another mall or store. For the golf enthusiasts among us, however, the preponderance of courses is a delightful benefit of living in this otherwise uninteresting locale, where the only saving grace is the plentiful supply of interesting people.