Golf Industry Case

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  • Topic: Golf, Golf club, Golf ball
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  • Published : November 27, 2011
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Golf Industry 2009 Case Analysis
Michael George
Central Michigan University
MGT 495 Section #2216221

Table of Content
1.Introduction page 1
2.Five Forces of Competition pages 1-4
3.Driving Forces page 4
4.Strategic Map page 5
5.Conclusion page 5
6.Biography page 6

In this case study we look at the golf equipment industry in 2009 and its driving forces that affect the competition amongst its leaders. The companies examined in the study are Callaway Golf, TaylorMade-Adidas Golf, Titleist/Cobra Golf, Ping Golf, and Nike Golf. We will examine the competitive forces being dealt with by these companies, the driving forces that are affecting the industry, and the attractiveness of the industry to these existing companies and other potential entrants. Five Forces Analysis of Competition

-Rivalry Among Competing Sellers(Gamble 2011 pp.53-57)
The rivalry among the 5 competitors in the golf equipment industry detailed in the case study is based primarily upon technological innovation, product performance, brand image, tour exposure, and price(Gamble 2011, p.288). The opportunities to create competitive differentiations by innovations in golf club head design have been capped and limited by initiatives put in place by the USGA through the 1990’s and 2000’s that restricted continued improvement in “spring-like” effects and larger “sweet spots” that enabled golfers to hit better driver shots more often(Gamble 2011, pp283-286). There were also limitations put in place by the USGA that capped innovations in golf ball design and wedge grinding that restricted the spin of the ball(Gamble 2011, pp285-286). These restrictions worked to cap the technological innovations that allowed companies such as

Calloway and TaylorMade-Adidas to gain market share and brand recognition by continuously updating the equipment used by the Tour pros and sold in pro shops. The product performance that affects the competitive dynamic of the companies is primarily dictated by the restrictions put in place by the USGA. Further performance differentiations have been gained by manufacturers offering a more customized piece of equipment to suit specific swings and situations. This has been achieved by Callaway’s weighted irons(Gamble 2011, p.292), TaylorMade’s interchangeable shafts(Gamble 2011, p.294), and Ping’s multi-material irons(Gamble 2011, p.299). Brand image and Tour exposure tend to go hand in hand in this particular competitive rivalry. All of the competing brands are very reliant upon their exposure with professional golfers on the Tour. This is most evident with Nike Golf recognizing early on that Tiger Woods was going to be a game changer in professional golf and endorsements(Gamble 2011, pp.299-300). Their signing of Tiger spearheaded their entry into the competitive rivalry in footwear, golf balls, apparel, and to a lesser degree clubs. TaylorMade, Titleist, and Ping are also heavily represented on the professional Tours contributing to their brand awareness and image with the recreational shoppers. Price is perhaps the single biggest remaining competitive factor in the dynamic of the equipment industry. Callaway, in an effort to appeal to all golfers from professional to recreational has an extensive offering of both drivers and irons at various pricing points and performance requirements(Gamble 2011, pp.290-292) to suit the differing needs of golfers. TaylorMade has taken control of the hybrid club market(Gamble 2011, pp.294-295)by their wide 3

offerings while still having a strong presence at the upper price points of the driver market. Titleist has remained in control of the golf ball market with its higher end ProV1 and its lesser priced NXT and DT models(Gamble 2011, p.296) garnering them a 40% market share. In order to remain relevant in the golf equipment industry, manufacturer’s must continue to innovate and offer the high end equipment...
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