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Competition in the Golf Equipment Industry in 2008. By: Dan McLindon Kyle McDaniel Jeremy Smiley Tom Anderson Ray Moorman. Golf Equipment Industry Key Question.

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Competition in the Golf Equipment Industry in 2008

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Competition in the golf equipment industry in 2008

Competition in the Golf Equipment Industry in 2008

By: Dan McLindon

Kyle McDaniel

Jeremy Smiley

Tom Anderson

Ray Moorman

Golf equipment industry key question

Golf Equipment Industry Key Question

  • Can golf equipment manufacturers continue to be profitable while still conforming to the increasingly tightening rules developed by the USGA and R&A?

Golf equipment industry additional question

Golf Equipment Industry Additional Question

  • How can club manufactures produce equipment that makes the game fun and easier for the beginning golfer so they stick with the game and become a core golfer?

  • How do premium equipment manufactures create products that appeal to existing core golfers and how do they grow the market of core golfers?

  • What is each golf equipment company’s competitive advantage?

  • How do golf club manufactures plan for the future with the uncertainty of further new rules limiting club and ball technology?

  • Is the timing right to pursue international expansion? Will the popularity of golf rebound in the United States?

A very brief history of golf

A (very) Brief History of Golf

Evolution of the golf equipment industry

Evolution of the Golf Equipment Industry

  • First equipment manufactures began in Scotland during 1700’s

  • Over time building materials changed, but types and design of clubs did not

    • Wood to steel to graphite shafts but still same club head designs

    • More durable and consistent golf balls

  • Mid to late 1990’s a period of great innovation began by premium golf equipment manufactures

    • Ping, Callaway, TaylorMade, Fortune Brands (Cobra and Titleist)

    • Innovations centered around game improving features

      • Larger Driver heads (ex. – Callaway Great Big Bertha)

      • More forgiving oversized irons

      • Deeper grooves in irons and woods to promote spin

      • Putters with larger sweet spots, face inserts

      • Multi-piece golf balls allowing for both distance off tee and feel around greens

    • Resulted in record industry profits

Usga and r a step in

USGA and R&A Step In

  • In 2004 USGA and R&A begin regulating golf clubs and balls in an effort to preserve integrity of the game

What is changing in the external environment

What is changing in the external environment?

Pest analysis of the golf equipment industry

PEST Analysis of the Golf Equipment Industry

What are the changes in demand

What are the changes in demand?

Overview of the golf market

Overview of the Golf Market

Breakdown of us golf population

Breakdown of US Golf Population

  • Steady decline over last decade of number of golfers in USA

  • People who picked up the game with the boom in popularity in late 1990’s but did not stick with it

  • Too difficult to get good and did not become “Core” golfer

Units of products sold in millions

Golf Industry Sales Figures

Units of Products Sold (in millions)

Total units of products sold have remained fairly flat over last decade…

Competition in the golf equipment industry in 2008

Golf Industry Sales Figures


Sales price per unit has declined for large ticket items like drivers

Increased for putters

And remained relatively flat for other sectors

Conclusion – Equipment manufactures have moved to competing on price due to challenges with differentiation brought on by new USGA and R&A rules

Golf equipment industry product mix

Golf Equipment Industry Product Mix



  • Not many significant changes in size of each segment from 1997 to 2007

  • Size of overall pie is larger from $2.4 billion in 1997 to $2.9 billion in 2007

    • 20% increase in total industry sales in US despite decrease in overall number of golfers

Competition in the golf equipment industry in 2008

What are the internal factors affecting golf equipment manufacturers?

Internal analysis

Internal Analysis

  • Innovation of products drives growth

    • USGA rules discourage innovation and allow less technologically advanced manufacturers to catch up to industry leaders

    • Manufacturers struggle to differentiate their products when everyone has the same technological limitations

Internal analysis1

Internal Analysis

  • Outsourced Manufacturing

    • Lowered operational costs industry wide

    • Allowed counterfeiters to copy equipment

      • Led to Golf Manufacturing Industry alliance

Competition in the golf equipment industry in 2008

What are the strengths, weaknesses, opportunities, and threats of golf equipment manufacturers?

Swot analysis

SWOT Analysis

Reasons for playing golf less

Reasons for Playing Golf Less

  • 2003 Survey from the National Golf Foundation

Competition in the golf equipment industry in 2008

Recommendations for the golf equipment industry



  • Penetrate Foreign Markets

    • Income rising in India & China

  • Consolidation Strategy

    • Align Manufactures

    • Invest & innovate based on competitive advantage (drivers or putters, etc.)

  • Vertically Integrate & Purchase Suppliers

    • Grips, shafts, custom fittings

Recommendations cont

Recommendations cont.

  • Create Recreational Line of Equipment

    • Ignore regulations

      • use available technology on equipment for recreational golfers

      • Playing better, making the game easier will inspire more people to pick up the game and continue to play

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