Competition in the Golf Industry 2009

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  • Topic: Golf, Golf course, Callaway Golf Company
  • Pages : 4 (1062 words )
  • Download(s) : 162
  • Published : September 29, 2010
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Situation:
American Golfer Arnold Palmer once said, “Always make a total effort, even when the odds are against you” (Palmer, n.d.). The game of golf started in the United States (U.S.) primarily for the wealthy, but soon spread to the public in the 1950’s and 60’s due to televised tournaments. The industry continued to experience steady growth thanks to increased pubic awareness, rising household income, number of public golf courses, and technological innovations of golf club design. By 2008 the game of golf has matured into a 2.9 billion dollar industry (Gamble, 2010), completely eclipsing its European origins. Though the game of golf has seen some success, stagnant growth struck the golf industry in 2009 as total numbers of golfers decreased. Along with a number of other factors caused a decline in top line revenue for the golf equipment industry (Gamble, 2010).

Complication:
Due to the recession starting in 2007, Americans started to shift all disposable income from spending to savings, thus decreasing the sales of golf equipment by 5.7%. From the recession, the unemployment rate rose quickly as many Americans were laid off. In fact, between December 2007 and June 2009, more that 6.5 million Americans lost their jobs (Gamble, 2010). Other factors that greatly affected the revenue of golf equipment was the fact that gasoline prices nearly doubled from 2007 to 2008, urging everyone to cut back on unnecessary purchases and to focus on savings. IBISWorld reports that the “Golf Courses and Country Clubs industry is expected to lose more than $430 million in 2010 thanks to economic uncertainty (IBISWorld, 2009).”

Adding salt to the wound, counterfeiting in the golf equipment industry has grown staggeringly. Many recreational players could not pass up the extraordinarily low prices counterfeit clubs offers, especially when good counterfeits are nearly carbon copies, aesthetically speaking, to their legitimate counterparts (Gamble, 2010). For the casual...
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