Competition in the Golf Equipment Industry

1. 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. . 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 build strong brands by using celebrity endorsements aim to grow the market share in the golf segment. Golf product brand equity depends on the performance of its endorsed players.

The performances of the professional golfers sponsored by each brand strongly relates to sales. Innovation in the golf industry is an important part of equipment adoption. Because of the fleeting life p of golf clubs, adoption of new drivers and putters is critical to any golf equipment manufacturer’s strategy. Performance in golf equipment is closely tied to PGA professionals and well known amateurs who use certain clubs and brands to help promote the value of the equipment. Counterfeit golf equipment has continued to impact pricing of golf equipment by being sold worldwide which s a threat to the golf industry because the counterfeits can be sold much less than the originals. Callaway’s strength has been its line of Big Bertha drivers and the acquisition of the Top-Flite Golf company which allowed Callaway to manufacturer popular golf ball equipment. The weakness has been the golf club business which has lost money according to third quarter reporting. The financial report shows a 28% of net sales in the third quarter of 2010 as compared to 31% of net sales in 2009 third quarter.

TaylorMade’s strength has been its improvement to the drivers namely the r5 and r7 series which supplanted Callaway’s Big Bertha as the driver of choice for many golfers. The weakness of TaylorMade Golf has been in putters, irons and golf balls. Never really gaining in these fields over Callaway, much of this business was sold or minimized. Titleist’s strength is its golf ball market share. Its weakness has been its golf club line which has been targeted to elite golfers, though not adopted widely by many golfers. Ping Golf’s strength has been in the iron segment in 2008.

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Its weakness has been poor wedge sales (Strickland III, Thompson, & Gamble, 2010, pp. C-95 – C-96). Nike’s strength is the marketability of its primary endorsement, Tiger Woods, along with its popular golf ball line. Its weakness has been a quality issue with product that was sold at less than suggested retail due to this issue. 3. Identify the strengths and weakness of Callaway, TaylorMade, Titleist, Ping, and Nike. Determine which company has a competitive advantage in the marketplace and state why you believe this to be true.

Ans: Overall the best golf company in my opinion is definetly, Titleist. Also, below, I listed the best product for each category of golf equipment. Driver: Taylor Made super quad Irons: Titleist AP2 (leading irons on tour); Woods: 906F4's; Hybrid: adams hybrids (leading hybrid on tour) Wedges: Titleist Vokey spin milled or 200 series (leading wedge on tour) Putter: any Titleist Scotty Cameron that fits you (leading putter on tour) Balls: Titleist Pro V1 or Pro V1x (leading ball on tour and my personal favorites) Bag: Ping (they have outstanding long lasting quality bags! Glove: Titleist Yardage device: Bushnell Shoes: Footjoy (particularly Dry Joys) Grips: Lampkins or Golf Pride ( especially the dual density lamkin grips) 4. Based on the company selected in the previous discussion, recommend how the company can ensure that its competitive advantage is sustained. a. Strong research and Innovation: The technology industry is one of the leading industries with respect to strong research and innovation.

And when it comes to setting the pace using innovation as leverage; Apple and Sony are the two companies that have held their leadership position using innovation as a competitive advantage. b. Brand Popularity: Being recognized all over the world as a respected brand is a sustained competitive advantage that companies such as Virgin, Apple and Coca cola have used as leverage to hold the market sway for years. Virgin is a company that has used its brand name as leverage to break into new markets in completely new territories. . Corporate reputation: Corporate reputation is a form of sustained competitive advantage that companies such as Price Waterhouse and Berkshire Hathaway have leveraged to become world class entities. d. Strategic assets: Holding strategic assets such as patents is a strong source of sustained competitive advantage and General Electric has stood the test of time because of the several patents held. Mind you that possession of these strategic assets has made General Electric one of the most powerful companies in the world. e.

High volume production: Dangote Group of companies became one of the leading conglomerates in Africa because of its ability to produce goods on high volume and ensure a uniform price throughout Nigeria. f. Access to working Capital: Generally, public liability companies (quoted companies) have a sustained competitive advantage over private companies because of their infinite capacity to raise capital from the public. Take a look at how Oracle acquired 57 companies in a space of five years and Reliance Industries investing a billion dollars in a single swoop to open a chain of retail stores. . Superior Product or customer support: IKEA has become a market leader in the furniture industry because of its ability to provide superior product at an affordable rate; backed by a strong customer support system. h. Flexibility: The ability to change swiftly is a strength and source of sustained competitive advantage that Microsoft leveraged upon to become the largest software company in the world. i. Low pricing: Wal-Mart as at the time of this writing is the most capitalized company in the world. Thanks to its low pricing strategy that became its strong source of competitive advantage.

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