Case #3: "COMPETITION IN THE GOLF EQUIPMENT INDUSTRY”
From its earliest beginnings in the 1450’s, golf was a peculiar game that tested the individual skill of each person who played. It is a game that takes a player on a journey through a number of “greens.” The player must try to get the small, hard golf ball into the “green” or “putting green” which contains a hole in the ground. The player can only hit the ball with a golf club. Golf equipment, such as golf clubs, golf balls, and the like are the subject of this report.
There are five competitive forces: “competitive pressures stemming from buyer bargaining power and seller-buyer collaboration; competitive pressures coming from companies in other industries to win buyers over to substitute products; competitive pressures stemming from supplier bargaining power and supplier-seller collaboration; competitive pressures associated with the threat of new entrants into the market; and competitive pressures associated with rivalry among competing sellers to attract customers. This is usually the strongest force)” (Gamble & Thompson, 2011).
There are a handful of rival competitors in the golf equipment industry. The leading manufacturers and marketers of Golf Equipment were Callaway Golf Company, TaylorMade-Adidas Golf, Titleist/cobra Golf, Ping Golf and Nike Golf.
Innovation in regards to new technology “as allowed by the USGA and R&A, product performance, brand image, tour exposure, and price were the competitive forces that had the greatest effect on the industry. In 2009, most golf club manufacturers had met dimension, volume, CT, and MOI limits and were attempting to achieve differentiation in drivers by either lowering the center of gravity to increase launch angle or by offering clubs with adjustable features” (Gamble & Thompson, 2011). The pace of rivalry is not becoming more intense since the industry services a limited amount of players and must work within the industry’s guidelines...
References: Gamble, J.E. & Thompson, Jr., A.A. (2011). Essentials of Strategic Management: The Quest for Competitive Advantage: 2nd Edition. New York: McGraw-Hill Irwin.
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