Group Case #2
Competition in Golf Equipment Industry in 2008
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The paper is partial fulfillment of
Strategic Management course (2602-650),
MBA English Program Batch 3
Industry Lift Cycle Analysis
Industry’s Driving Forces
Key Success Factors and Industry Matrix
Porter’s Five Forces Model
Competitor Environment Analysis
Market Environment Analysis
General environmental factors are the external factors that have several impacts on golf equipment industry. An analysis and summary of those impacts including opportunities and threats of the industry are listed below.
World economic today is still very weak and in the downturn. The world economic has declined since 2006 which was the result from the subprime mortgage crisis in the US. The percentage of the US disposable personal income and personal saving rate has continually declined in the recent years. Once they realized the difficult time in 2008, the US people tend to save their cash and reduce their leisure time as there is a rebound in the saving rate at 2Q and 4Q in year 2008. However, the US Government and also governments of the countries all over the world are not at ease in this crisis. They have to launch new initiative policies in order to restore and boost their economic system. Despite of capital injection, monetary and fiscal policies will play an important role and need to become more supportive of aggregate demand and sustain this stance over the foreseeable future. Also governments have to develop strategies to ensure the long-term fiscal sustainability.
Figure [ 1 ]: US Personal Saving Rate (Percent of disposable personal income)
With strong effort from the government, we believe that the economic will be recovered soon. After the hard time, people will need some more relaxation and it would be the time they return to play golf, which will become an opportunity for the golf equipment industry.
Baby Boomers are the majority golfers in the US. The Boomers are the 78 million American who born between 1946 and 1964. They are ages 44 to 62 in 2008. The retirees, both men and women, are a better golf customer because they are less likely to be working or raising children. In 2007, during the recession period, the number of Americans who played golf at least once a year was approximately 22.7 million, which was around 5 million less than the number of Americans playing golf in 1998. The decrease was due to increased job and family responsibilities. Moreover, health concern and/or injuries were a major reason that blocks the older golfers from the golf course. Those reasons are the threat for the industry. Even though the number of golfers composed of men, women, and junior was declined in 2007, however, there is a statistics from the National Golf Foundation (NGF) reported the fast growing segment of women golfers are those between the ages of 18 and 29. Young female golfers are golf “lite” and play golf average at about three rounds per year. Therefore, there would be an opportunity for golf industry to expand its market through women and junior golfers. Ethnic mix and Income distribution
There is slightly effect from ethnic in playing golf. Minority participation was relatively low in the US....
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