Callaway Golf Company Case Analysis

1675 words 7 pages
Callaway Golf Company

1.) The defining business and economic characteristics of the golf equipment industry can be measured by looking at the makeup of the industry itself. The case states that there are approximately 26 million Americans who play golf. 5.4 million play at least twice a month. These numbers are expected to grow by 1 to 2 percent a year until at least 2010. Of the U.S. golfers, 25% are seniors, 5.7 are women, and 2.1 million are juniors. The typical golfer is a 39 year old man who earns about $66,000 annually. Golf has also started to expand globally with 16 million and 2 million golfers in Asia and Europe respectfully. In 1999, the golf equipment industry took in about $2.7 billion in wholesale sales (2nd only to
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Callaway can perform numerous tests and experiments in the club design all within a simulated environment. Once a simulated design is agreed upon, Callaway then will produce the club. Callaway has acquired and partnered with different production companies. Callaway also tests its products at its own testing center. Callaway will use feedback at each stage to make improvements. The final way Callaway adds worth to its value chain is through its customer service. Callaway has built up a reputation with its customers of always offering the best clubs on the market, that even when problems do occur, the customer always receives the best service. The case makes it appear that none of Callaway's competitors can match Callaway's value chain.

8.) Callaway has competitive strengths in all divisions of their golf clubs. Currently, Callaway is the leading choice of drivers, fairway woods, irons, and putters among professional golfers. Callaway is dominating in the fairway woods market with 52.1%. The closest competitor is Orlimar with 17.9%, then Taylor Made with 8.8%, and Titlest with 4.5%. In the drivers market, Callaway has 38.5%, Titleist has 24.2%, Ping has 13.4% and Taylor Made with 5.3%. Competitors in the drivers market are slowly gaining on Callaway, because in 1998 Callaway had 55.2% of the drivers market. In the irons market, Callaway has a slight advantage with 18.3%, Ping and Mizuno each have 15%, and

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