Performance Indicator

926 words 4 pages
Performance Indicator Memo

Executive Summary
The aim of Performance Indicator is to increase golf ball manufacturers’ value by increasing revenue from new ball sales as a result of eliminating older, used balls through its color change coating technology. Although there appears to be a possible financial benefit based on the future perceived demand for new golf balls, PI’s new technology does not appear to have any transparent benefit or value creation for the end consumer (golfer). Consequently, no manufacturer has yet to adopt this technology.
Inconsistency Between Sales-Pitch and Willingness to Pay
Performance Indicator (PI) has developed a technology that will enable the golf industry to reduce the number of used golf balls in
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In fact, there may be a shift towards value brands based on the technology. Exhibit 5 Estimation of Profit Impact | | | | Per Dozen | Titleist | | Dunlap Maxfli | | Retail Price | 35.00 | | 17.00 | | Retail Profit | 10.50 | | 5.10 | | Wholesale Price | 24.50 | | 11.90 | | Wholesale Cost | 9.06 | | 4.40 | | Wholesales GP | 15.44 | | 7.50 | | | | | | | Profit per Million Dozen incremental Sales | 15,440,000.00 | | 7,500,000.00 | | | | | | | Total Potential % of 50M Doz | 31% | | 33% | | Total Potential $ Opportunity | 239,320,000.00 | | 123,750,000.00 | | | | | |
By insufficiently presenting a business case, it fails to convince a potential customer to action. A manufacturer would be more interested in their total manufacturing cost and revised profit utilizing the new technology. A revised approach to presenting this data is offered below. Based on the lack of value added to the golfer from this technology, it is unlikely that a fundamental market shift will occur. However, in this revised exhibit, the data more clearly displays the potential range of profits a manufacturer could achieve from the shift in the market. By translating the quantities of golf balls into amounts of profits, the case for

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