In 1998, Callaway, one of the most famous brands in the golf domain, has experienced its first loss of $ 27 million after 10 years of growth. To resolve this problem, Ely Callaway, the founder of this company, wondered if CGC (Callaway Golf Company) would have to revise the way it approached retailer relationships to raise more mutually beneficial. To address possible market confusion, should the communication strategy shift? In fall 1999, Callaway faced amount of questions; the answers would guide him in refocusing CGC’s retail channels, new-product development, and marketing strategies.
As Ely Callaway’s vision: “If we make a truly more satisfying product for the average golfer, not the professionals, and make it pleasingly different from the competition, the company would be successful.” Callaway was dedicated to popularize golf and try to help the average golfer achieve good grades so that they would not give up this sport too easily. “If you can make something sufficiently good, what it costs doesn’t matter.” The vice president of CGC, Helmstetter said. Without a doubt, 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. Callaway got the leading position mainly for the following three technologies: S2H2, Big Bertha, Titanium. Competitors could not catch up to the technology, enabling premium pricing and superior brand image.
The case also mentioned Callaway’s retail channels, such as the training for retail staff, Inventory, and retail challenges. To resolve the problem of dropped sales, Callaway regarded the following three questions as the challenges: What products should be developed? How should CGC approach its retail partner relationships? And, should CGC’s marketing campaign be refocused? Utilization of One Strategic Marketing Model (Porter’s 5 Forces):
Threat of New Entrants: