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Competition in the golf Equipment Industry
in 2005
Question 1 :What are the industry’s
dominant traits ?
Market size and growth rate
PRODUCT innovation along with
celebrity endorsements are the key
factors for the growth of the
industry
Product Innovation
Callaway golf company 1991 launch of
oversized big bertha drivers
The manufactures of golf equipment
introduced new products at intervals of
12-18 months
Technology
Competitive rivalry in the industry
centered on technology innovation in
club head and shaft design product
performance company image and tour
exposure ,New comers are more inclined
to add new techniques in the game for
which they like to experiment with the
different.
Question 2.
What kind of competitive
forces are industry
member facing
Threat of New Entrants/Entry BarriersFactors HUF MU Neutral MFA HF Comment
Economies
of scale
Capital
required
Access to
distribution
channels
Even small size
companies can compete
at low cost
A new entrant can
easily locally produce
and market its product.
product were available
in the market or direct
sales
Threat of New Entrants/Entry BarriersFactors HUF MUF Neutral MF HF Comment
Differentiati
on
Brand
Loyalty
Govt. Action
Little differentiation
among most competing
products.
Brand loyalty is for big
players
USGA, PGA
Exit Barriers
Factors HUF MUF Neutral MF HF Comment
Specialized
Assets
Government Barriers
Assets are not easily
convertible to other related
products
As such no government barriers
The bargaining power of suppliers
Factors HUFA MUFA N MFA HFA Comments
No. of important Suppliers
Switching cost
Threat of forward integration
Fixed suppliers
Less differentiation
Stagnant Market
The bargaining power of Buyer
Factors HUFA MUFA N MFA HFA Comments
Number of
Important
buyers
Threat of
Backward
Integration
Switching
cost
Few buyers, Stagnant Mkt
No such issue reported again
Many product are available by
the different companies and
they have Low differentiation
so there is no such switching
cost
Factors HUFA MUFA N MFA HFA Comments
Profit
earned by
buyer
Quality of
Product
Stagnant Mkt
Product Innovation
The intensity of competitive rivalry
Factors HU MU N MFA HFA Comments
Composition
of
Competitors
Mkt. Growth
rate
Scope of
competition
5 big competitors
Stagnant Market
Presence of
callaway,adidas,cobra,titleist,
ping,nike enhanced the scope
of competition to global level
Factors HU MUF Neu MF HF Comments
Capacity
Increase
Degree of
differentia
tion
Strategic
Stake
Callaway and other
companies increase there
capacity as per demand to
compete in the market and
also less golfers
Degree of differentiation
was little in spite of various
major players competing
Strategic Stake is high for
global competitors
Overall Industry Attractiveness
Factors Unfavorable Neutral Favorable
Entry Barriers
Exit Barriers
Rivalry among
existing firms
Power of buyers
Power of
Suppliers
QUESTION 3: forces exerted
greatest influence over next 1-3
year
Product innovation
Entry or exit barriers
Increasing globalization
Marketing innovation
a.
Are driving forces acting to cause
market demand for product to
increase or decrease
These 4 drivers of change will increase or decrease the
demand for the product
Are driving forces acting to make
competition more or less intense
Yes these forces make the competition between rivals
more intense
Will driving forces lead higher
or lower industry profitability
As the demand for the products increased the
profitability of the industry will be higher
Strategic Map of the
Industry
PRODUCT INNOVATION
P
E
R
F
O
R
M
A
N
C
E
Callaway
TaylorMade
Titleist/Cob
ra
Ping Golf
Nike
Key Success Factors: CPM
Key Success Factors
Technological Innovation
Customization
Direct Sales Distribution
CPMStrategic Factor Weight Callaway Rating
Callaway
Weighted Score
TaylorMade
Rating
TaylorMade
Weighted Score
Technological
Innovation0.4 7 2.8 6 2.4
Customization 0.3 6 1.8 6 1.8
Sales 0.3 9 2.7 8 2.4
Total 1 7.3 6.8
Strategic Factor WeightTitleist/Cobra
Rating
Titleist/Cobra
Weighted Score
Ping Golf
Rating
Ping Golf
Weighted Score
Technological
Innovation0.4 5 2.0 6 2.4
Customization 0.3 6 1.8 5 1.5
Sales 0.3 5 1.5 6 1.8
Total 1 5.3 5.7
CPM
Strategic Factor Weight Nike RatingNike Weighted
Score
Technological
Innovation0.4 5 2.0
Customization 0.3 8 2.4
Sales 0.3 7 2.1
Total 6.5
