...CASE 3: COMPETITION IN THE GOLF EQUIPMENT INDUSTRY 2009 Background There is no exact date as to when the game of Golf came into existence. The first known reference of golf was made in 1452. Golf has come into its own during the early 1950’s and 1960’s. The game was televised in America, which ultimately meant that more and more people would become exposed to the game. During the late 1990’s.it was estimated that more than 27 million Americans were playing golf. However, between 1998 and 2008, the number of people playing golf had declined from 27.5 million to 25.6 million players. The industry is currently in a state of decline. The recent recession and the onset of regulations from the USGA and the Royal and Ancient society have had a negative impact on the golf equipment industry. 1. The industry is defined by endorsements, branding, technological advances and regulation. - Endorsements – Leading golf brands have always struck endorsement deals with leading golf players. The value of the endorsements has increased significantly since 2000. During the 1990’s top players were receiving between $250 000 - $400 000. By 2007, the top golfers were earning at least $4 million. Tiger Woods has earned more than $80 Million in endorsements in 2009 alone. - Branding – Golf is characterized by brands such as Nike, Callaway, Titleist, TaylorMade, Cobra, Ping, and so forth. - Technological advances – Golf clubs today can hit a golf ball approximately 265m...
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...Discuss the trends in the golf equipment industry and how it may impact a company’s strategy. Ans: According to new the United States Golf Association (USGA), Golf equipment manufacturers are forced to launch the equipment within the limitation. Therefore, the product differentiation is not quite high while recreational golfers do not enjoy playing due to lack of innovational equipment. Also, the USGA states that there are various factors that result in the declining of golfers such as: - Game difficulty: Golf equipment manufacturers are forced to follow the new USGA rules, thus, recreational golfers are suffered from the limitation of golf equipments. They cannot enjoy playing golf as much as before while new golfers face the difficulty of playing. - Time consuming for practice: According to the limited innovation of golf equipment, golfers need lots of time to practice while they also have take responsibility to their job and spend time with their families. - High golf fee: Some golfers realize that golf fee is high, as a result, they cannot practice frequently. 2. Discuss the importance of innovation, brand, performance, and price in the golf equipment industry. Ans: Good reputation and image can lead to brand loyalty. That’s why many brands use lots of advertising expenditure to promote their brands. As the leading sports brand in the world, Nike has a clear marketing advantage over its competitors. Nike spends some of their annual revenues on advertising to...
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...Competition in the Golf Equipment Industry in 2009 Karina Diamond 2012 Strategic Management 3/14/2012 Competition in the Golf Equipment Industry in 2009 Karina Diamond 2012 Strategic Management 3/14/2012 Table of Contents Question One 2 * Details of the characteristics of the golf equipment industry Question Two 4 * Includes Michael Porter’s Five Forces Model Question Three 7 * Discussed the competitive weapons used by rivals Question Four 9 * Looks at the drivers of change within the industry Question Five 11 * Key success factors Question Six 13 * Financial Statement Analysis Question Seven 15 * Recommendations Conclusion 18 Appendices 19 * Includes a breakdown of Financial Analysis References 22 What are the defining characteristics of the golf equipment industry? How would you characterise the state of the industry? The sport of golf has a long and regal history. Televised tournaments in the fifties and sixties in America meant that more people became interested in the game. The golf equipment industry in 2009 is in the middle of a crisis with the number of players stalling and the sales of equipment declining since 2006. The industry is defined by endorsements, branding, technological advances and regulation. The industry is currently in a state of decline. The recent recession and the...
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...Executive Summary 3 Description of Business 3 Mission Statement 3 The Product 3 Market Analysis 3 Future Projections 4 Financial Overview 4 II. Market Analysis Summary 4 Industry Analysis 5 Market Trends 6 Barriers to Entry 6 Changing Forces 6 Customer Analysis 7 Competitor Analysis 7 Critical Success Factors 8 III. Business Implementation and Evaluation 8 Implementation Plan 9 Evaluation 9 I. Executive Summary Description of Business Increasing demand for accurate score keeping coupled with advances in golfing technologies and the ever expanding locations of golf courses have dramatically altered the golfing world by making golf courses more accessible and have leveled the playing field between novice and experienced golfers. However, unlike times past when scores were tallied based on personal integrity, there is now a way to keep a golfer honest about their score keeping. . This will be accomplished by partnering with local golf courses to promote this new technology during the initial roll out phase of the Integrity Glove (IG). The company will provide a select few North Texas golfers with an opportunity to try out the latest innovation in golf scoring equipment at their preferred course. Innovations that improve the accuracy of scoring will enhance the competition and enjoyment of the game for all parties involved. Scoring has traditionally been a function of human inputs. During a casual game a player would record their score on a traditional...
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...Summary The purpose of this marketing plan is to present a new category-brand extension product designed by DeWALT Power Tools and manufactured by Calloway Golf. The new DeWALT IronDrive Pro category line of golf clubs will embody the brand reputations of quality, power, top of the line features, superior technology and durability that have made both DeWALT and Calloway leaders within their perspective industries. This product is a specialty niche set of golf clubs packaged in a branded walking golf bag and also will include club head covers, a club towel, and balls to complete the perfect golfing experience. Consumers who purchase this product will enjoy the industry leading golf technology of Calloway and combined with the industry leading power tool features and benefits provided by DeWALT. The target market for this product consists of males 20-65 years old, college educated, makes an annual salary of $40,000 or more, and purchases high end products. The ideal customer lives all across the United States, but in particular resides in the industry’s largest regions of the Mid-Atlantic, New England, East North Central, South Central, and West North Central regions. The customer will have some knowledge of around the house DIY projects and tools to complete the task. The value proposition for the DeWALT IronDrive Pro is a golf club designed with the power, speed, accuracy, and durability of DeWALT Power Tools infused with Callaway technology and control to make even the novice...
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...Callaway Golf Clubs Term Paper Assignment Webster University Marketing 5000-02 Fall I 2010 Rashad A. Myers Executive Summary Callaway is a premium golf equipment company which focuses on increasing the overall experience of playing the game for those that use its products. The company will increase market share and profits by focusing on specific target markets over the next 12 months. Environmental Analysis Socio-Culturally, Callaway is affected by the fact that the majority of its customers are Caucasian and male. Further, this demographic is largely made up of male baby boomers, and this segment is aging rapidly, with many giving up the game due to health reasons. Also, children are not taking up the game with the numbers that they used to. Instead, they opt for video games and other sports. Politically, Callaway is not affected by legislation. Callaway is certainly impacted by what is going on economically. Golf is a relatively expensive sport to play with any regularity, when you take into consideration the equipment costs and green fees. One of the first activities that are limited is recreational spending in a down economy. The company will suffer if people’s discretionary spending is limited for extended periods of time. Callaway is affected by Legal and Regulatory forces because its governing body, the United States Golf Association (USGA) can make changes to equipment any time it wants to. Callaway incorporates technology heavily in their...
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...Alternative Strategies Healthy competition within the industry is apparent. The major issues lie with regulations, loss of consumers/interest, the recession, and the counterfeiting wars. All companies have strategies that are effective, but should be changed to adjust to the current environmental issues. Callaway currently has an effective strategy focusing on research and development and remains the industry leader. TaylorMade is focusing on out sourcing production in order to increase operating margin and is second in the industry. Titleist is focusing on their strong golf ball market. This is dangerous because if they were to start losing market share, the heavy reliance could negatively impact the company and they could lose millions. Ping currently focuses on its drivers and irons which are selling well, but because of their limited amount of product lines it remains fourth in the industry. Nike relies heavily on endorsements and is the younger company in the golfing industry. The following are three alternative strategies that can help the companies and industry as a whole live up to their full potential at this point in time. Blue Ocean Strategy All the golfing manufacturers could benefit from a blue ocean strategy. A blue ocean strategy is one in which “growth in profits or revenues is achieved by discovering or inventing new industry segments that create altogether new demand.” (Gamble, 2011) In the golfing industry competitors are constantly trying to beat each...
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...was established in Germany in 1949, by Adolf Dassler, Adidas has been synonymous with the sporting industry. Today, Adidas is a global public company and is one of the largest sports brands in the world. It is a household brand name with its three stripes logo recognized in markets across the world. The company’s product portfolio is vast, ranging from state-of-the-art sports footwear and clothing to accessories such as bags, watches, eyewear and other sports-related goods and equipment. Employing over 46,000 people worldwide, the Adidas Group consists of around 170 subsidiaries including Reebok, TaylorMade-adidas Golf, Rockport and CCM-Hockey. The Group's headquarters are in Herzogenaurach, Germany. In the second quarter of 2013 the Group’s revenue was €3.383 billion. Business objects Aims: Usually long term goals (and quite broad). They define who or what you want you or your company to be. Objectives: Usually medium-long term goals (and more of a sense of direction). These define the purpose and the aims of the organization. Strategies: Usually broader ways and means of achieving objectives. These say how you’re going to get to where you want to go. Tactics: Usually short term goals. These are strategies that are put in place on a day-to-day basis to help achieve the objectives. Objects | Strategies | Tactics | *To be the global leader in the sporting goods industry.* Maximize the operational and financial performance. | * Creating shareholder value.* Diverse brand...
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...Running head: GROWING THE GAME Growing the Game Callaway Golf (Marketing Plan) Abstract This proposal discusses the promotion of and the expanding of the Custom Club Fitting service to more markets. This proposal will also discuss and give a brief overview of the company’s history, overall philosophy, the current market condition, the competition, performance, customers, a SWOT analysis, marketing strategies, and marketing mix strategies. The objective of this proposal is to develop and implement an effective marketing plan to expand Custom Club Fitting to more markets to increase performance in the market. Growing the Game Contents Executive Summary……………………………………………………………………… 4 I Introduction 5 a. Background 5 b. Purpose and Objectives 6 II Analysis of the Environment 6 a. External Analysis 6 a.a. Market 7 a.b. Competition 7-8 b. Internal Analysis 8 b.a. Performance 8 b.b Customers 9 III SWOT Analysis 9 a. Opportunities 10-11 b. Threats 11-13 c. Strengths 13-14 d. Weaknesses 14-15 IV Fundamental Marketing Strategies 15 a. Positioning Strategies 16 b. Competition Strategies 16 V Marketing Mix Strategies 17 a. Product 17 b. Price 17 c. Place 17 d. Promotion 17 VI Implementation and Control 18 a. Implementation 18-19 b. Control 19 VII Conclusion 19 Executive Summary Every golfer's...
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...Callaway Golf Company — 2009 Case Analysis Peter Peter MGMT 637 Strategy Management Professor. Garcia, Edmundo, M.I.B.A Mitjans 1 From its initial existence R&D and innovative products had been the lifeline of CGC. When Callaway bought into the company his first initiative was to develop original products. Innovation and superior performing products are important in golf because equipment is thought to have a significant impact on player performance. Moreover, innovation was important because CGC had to be the technological leader to sell its products at premium price and continue to exceed customer expectations. The industry was also characterized as being driven by new product development because manufacturers were trying to bet each other to the next "best club" so CGC had to manufacture products that were differentiated from its own existing products as well as those of its competitors. The S2H2- introduced in 1988. This club redistributed weight to the striking area of the club head. The Big Bertha metal woods introduced in 1991. The innovative feature of Big Bertha was that it provided a larger "sweet spot". The oversized head made it easier to make contact with the ball so in turn made drivers more widely used by average golfers and revolutionized the way clubs were manufactured. The Great Big Bertha Titanium- launched in 1995. Titanium clubs increased the moment of inertia by moving material away from the club...
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...years after getting started, in 2000, Geox expanded internationally. Then in 2002 they entered into the apparel industry with breathable jackets. They were a private company until 2004 when they went public. It wasn’t until 2008 that the company entered into the sports shoe market. Geox took a risk launching its golf shoes because the industry was highly competitive but Mario believed in Geox. In 2009, just after 14 years of being a company Geox was known throughout the globe. After gaining knowledge of Geox during the time period of 2005-2009 and their competitors and markets I have developed recommendations that will help Geox grow even more in the world. My recommendations are as follows: Recommendation 1: Develop a new brand for the sporting industry Recommendation 2: Continue to globalize I have given my recommendations in the following section. Following the recommendations is an appendix, which includes an analysis break down of the industry, their competitors, and company. Recommendation 1: Develop a new product line Major issue: Geox manufactures only lifestyle footwear and golf shoes along with a jacket that has the breathable technology. Executions: Geox has over 50 patents covering their technology, equipment, material, and processes yet they are going manufacturing lifestyle shoes and just recently joined the sporting goods industry with...
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...Golf Participation in America, 2010-2020 B Y J O S E P H F. B E D I T Z , P H . D . A N D J A M E S R . K A S S NATIONAL GOLF FOUNDATION Introduction RECENT DECLINES IN THE NUMBER of golfers and golf Figure 1: Golfer Participation - year by year 35 30 25 Golfers (mm) 20 15 10 5 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 courses, coupled with a reduction in golf consumer spending, have many in the industry asking: “Where is the game headed?” And when we think of the game, we correctly think about amateurs, the people who play the game. NGF’s founder, Herb Graffis, said that it is these amateurs “from whom all blessings flow.” What Herb meant was that without the amateur golfer, there would be no business of golf, no tournament golf, no golf media … no golf! We have been told that American consumer spending accounts for 70% of the nation’s gross national product, or GNP. Well, it’s safe to say that American golfer spending accounts for 100% of the golf industry’s GNP. So to understand where the game and business of golf is headed, we need to understand where the number of amateur golfers is headed. From the mid 1980s to the turn of the century, the number of golfers grew by about 50% – from 20 million to 30 million golfers. That is very substantial growth – a compound annual growth rate of around 3%. But since the year 2000, the number of golfers plateaued and has been slowly declining, raising concerns about the future. Figure 2 on...
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...Case 1 Goodwill Impairment Testing Should management have performed an interim goodwill impairment test as of September 30, 2010? Galaxy Sports Inc. (Galaxy) is a U.S. based manufacturer of sports equipment. It is an SEC registrant with one operating segment with three separate reporting units: fitness, golf and hockey. The fitness is the largest division of Galaxy with allocated goodwill of $200 million. The golf division reports $130 million of goodwill and the hockey has $30 million of goodwill. Each division has been a reporting unit for a number of years. Due to the complexities involved with the calculation of goodwill and resource restraints in 2009, Galaxy decided to hire Big Time LLC (Big Time) to perform three annual ASC 350, Intangibles-Goodwill and Other, impairment analyses. In 2009, no goodwill impairment was found by Big Time. In 2010, Galaxy did not use Big Time or any external evaluation firm for the goodwill impairment analyses. The management determined that the prior year step 1 analysis of Big Time could be used based on the fact that assets and liabilities had not significantly changed, the most recent fair value determination had exceeded the carrying value amount by substantial margins, and that no events or circumstances would cause the fair value to go below the book value. The issues at hand are whether or not an interim impairment analysis should have been performed as opposed to carrying forward the prior year step 1 analysis. Management...
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...dksfhdlhldksfh TABLE OF CONTENTS ITEM 1 GENERAL/PRODUCTS/SALES AND MARKETING # UNITED STATES MARKET AND INTERNATIONAL MARKETS # COMPETITION, TRADEMARKS AND PATENTS, RISK FACTORS # ITEM 2 # SELECTED FINANCIAL DATA # FINANCIAL STATEMENTS # OPERATING SEGEMENTS DATA # ITEM 3 # Section 3.1 # Section 3.2 # Section 3.3 # GENERAL NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon- USA. A 176 acre facility of 18 buildings which functions as its world headquarters and is occupied by approximately 6,000 employees engaging in management, research, design, development, marketing, finance, and other administrative functions from nearly all of its divisions. The principal business activity is the design, development and worldwide marketing and selling of high quality footwear, apparel, equipment, and accessory products. NIKE is the largest seller of athletic footwear and athletic apparel in the world. It sells products to retail accounts, through NIKE owned retail stores and internet sales, which we refer to as our “Direct to Consumer” operations, and through a mix of independent distributors and licensees, in over 170 countries around the world. Independent contractors manufacture virtually all of its products. Virtually all footwear and apparel products are produced outside the United States, while equipment products are produced both in the United States and abroad. PRODUCTs NIKE’s athletic footwear products are designed primarily for...
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...Galaxy Sports Inc. is a manufacturer of sports equipment. It is a public company with three reporting units: Fitness Equipment, Golf Equipment, and Hockey Equipment. During our audit, certain accounting treatments by Galaxy regarding goodwill impairment were found to possibly contradict with the Accounting Standard Codification. Based on my research of the ASC, my recommendations are that management should perform an interim goodwill impairment test at the end of third quarter of fiscal year 2009; and that management should not carry forward the 09 goodwill impairment test for Fitness and Hockey in 2010. Galaxy is in a competitive industry in which growth and profitability are tied to market and consumer demand. During 2010, as discussed in a press release by the management, Galaxy faced strong competition from Chinese imports that are sold at a lower price. Reduced consumer spending resulted from a slowing economy also hurt Galaxy’s sales. These “unanticipated competition” coming from affordable Chinese imports, and “significant adverse changes in the business climate” represented by a weak economy and reduced consumer spending are circumstances under which the ASC 350-20-35-30 mandates a goodwill impairment test between annual tests3. Therefore, an impairment test shall be carried out as of Sep 30, 2010. Figure 1 I also tracked the changes in control premium to gauge the accuracy of the fair value estimates assuming the 2009 fair values were carried forward. Control premium...
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