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Callaway Golf Company. By: Seth Fraser, Megan Foreman, and Corey Daigle. Brief History of Callaway Golf Where we are now New Vision and Mission External Analysis CPM EFE Summary Internal Analysis IFE Financial ratio analysis Net Worth Analysis Summary. Strategic Analysis

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callaway golf company
Callaway Golf Company

By: Seth Fraser, Megan Foreman, and Corey Daigle

overview
Brief History of Callaway Golf

Where we are now

New Vision and Mission

External Analysis

CPM

EFE

Summary

Internal Analysis

IFE

Financial ratio analysis

Net Worth Analysis

Summary

Strategic Analysis

SWOT Matrix

SPACE

Grand Strategy Matrix

IE matrix

Possible strategies

QSPM

Recommendations

Strategic implementation and desired results

Annual objectives (goal) and polices

Evaluation Procedure

Overview
history of callaway golf
History of Callaway Golf
  • 1981 Ely Callaway sells wine vineyard for 14 million dollars
  • 83’ Ely renames the company Callaway Hickory Stick USA
  • 85’ Company moves to Carlsbad, CA
  • 86’ Callaway becomes first company to use computer controlled machines to insure flatness of the clubs, along with new and innovative designs
  • 88’ Company renames its self Callaway Golf Company
  • 89’ Introduce traditional sized steel clubs
history of callaway golf1
History of Callaway Golf
  • 90’ Callaway drivers are number one on senior PGA tour
  • 92’ Callaway become publicly traded on NYSE under symbol ELY
  • 95’ Callaway becomes number one manufacturer of sales in woods and irons
  • 96’ Callaway becomes worlds largest manufacturer of clubs
  • 97’ Callaway acquires Odyssey Sports
  • 99’ Titanium drivers are introduced in Asia and Europe
  • 02’ Callaway lunches HX Golf Balls
callaway golf today
Callaway Golf Today
  • Callaway uses cutting edge technology to manufacture the world’s longest driver (the Big Bertha)
  • Along with men's golf accessories and apparel they offer a large selection to women
  • Callaway also offers a Fantasy Golf Challenge via the internet which offers Callaway products as prizes
callaway golf today1
Callaway Golf Today
  • Callaway offers a golf magazine which has details on the number one players, courses and tips on golf
  • Callaway also offers free donations to the under privileged and to better health benefits such the under insured along with employee volunteering
  • As well Callaway offers great benefits and services to their employees
  • http://www.callawaygolf.com/en/customerservice.aspx?pid=sitemap
vision statement
Vision Statement

One good shot is not enough.

mission statement
Mission Statement

At Callaway Golf, we make golf equipment for players world wide who think that hitting just one great shot is not enough. We believe technology is a powerful tool for creating user-friendly equipment that can help golfers of all styles and skill levels enjoy the game- and maybe a few more great shots along the way.

external analysis
External Analysis

Opportunities1. Market in Europe expected to grow by 3-3.5%

2. 35% -43% Cheaper Labor in Eastern Europe and Asia 3. Euro-Zone, no currency fluctuations 4. More open to western culture in the Middle East 5. Attitude towards leisure time 6. Internet as distribution channel 7. High school sport, 2.8 mill Juniors, 2-3%

increase

external analysis1
External Analysis

Threats

1. Price decline in golf club equipment 1.3% 2. Less rounds played by 2.9%

3. Mergers make former competitors stronger

4. Patent/Trademark infringement, $ 2-4 mill/year

5. Increase coverage of Golf on TV

6. Short production life-cycle

7. Weather conditions

external analysis summary
External Analysis Summary
  • At what point does market saturation occur in domestic and foreign markets
  • Cheaper labor in Asia and Eastern Europe
  • Short production life-cycle
  • Mergers make former competitors stronger
  • Internet as distribution channel
  • Marketing channels
  • Attitude towards leisure time
  • Consumer interest is getting younger and younger (high school)
internal analysis
Internal Analysis

Strengths

1. Financial ratios

2. Strong management team

3. Profit margin of 50%, low cost production

4. High brand equity

5. Diverse product line (width)

6. Technology and innovative skills

7. Net working capital( 2.8% increase)

internal analysis1
Internal Analysis

Weaknesses

1. Customer service

2. Production process, golf ball company

3. Employment contracts

4. Distribution

5. Only view specified suppliers

6. Only production facility in USA

7. Marketing

internal analysis summary
Internal Analysis Summary
  • Strong Financials
  • New Working Capital Increasing
  • Profit Margin of 50%
  • Weak marketing campaign
  • Weak Distribution Channels
swot matrix
S-O Strategies

Expand production into Eastern Europe

2. Open selected Callaway shops around the world

W-O Strategies

Start Callaway Online shop

Callaway Golf Camps

SWOT Matrix
slide25
S-T Strategies

Improve Production

Callaway Golf Camps

3. Acquire competitors like Mizuno

W-T Strategies

Move Marketing Channels

Select personalities for endorsements

Buy golf ball manufacturer

Backward integration

slide27

Y axis

  • Financial strength 5 +1 worst to + 6 best Y axis: 5 + (-2) = 3
  • Environmental stability -2 +1 worst to +6 best
  • X axis
  • Industry strength 3 6 best to 1 worst X axis: 3+(-2)=1
  • Competitive advantage -2 -6 worst to –1 best
possible strategies
Possible Strategies
  • Expand into East Europe
      • Open Selected Callaway shops around the world
  • Start Callaway online shopping
      • Move marketing channels
      • Select personalities for endorsements
  • Improve Production
      • Acquire competitors like Mizuno
      • Callaway Golf camps
      • Backward integration
recommendations
Primary Strategies

Improve production

Acquire competitors

Secondary Strategy

Expand into Eastern Europe

Open worldwide stores

Online shop

Special Credit cards…

Special low air fair flights…

Offer younger customers (high school students) discounts on goods

Set up web site for local golf courses (offer arranged tee time)

Get in on Frisbee golf

Offer competitions for free weekend golf resort

Recommendations
strategic implementation and desired results
Strategic Implementation and desired results
  • Expand into European market and help increase the popular western culture on golf
    • Domestic & International sales
      • 81.4 to 82.4 (3% increase)
  • Decrease cost of manufacturing to keep up with cheaper countries
      • 30.2 (37%) to 29.3 (-3%)

Over the next 3-5 years

(Numbers in Millions)

slide38

EPS/EBIT Analysis

$Amount Needed $500 Million

Interest Rate 5%

Tax Rate 33%

Shares Outstanding 66 Million

Stock Price $15.00

evaluations
Evaluations
  • Qtr & Annual financial reports
  • Yearly examination by firms head analysts of the company
callaway in the news
Callaway in the News
  • http://biz.yahoo.com/fool/050425/111445675824.html?.v=1
  • http://us.rd.yahoo.com/finance/freex/smart/SIG=11iuhmkjh/*http://yahoo.smartmoney.com/stockwatch/index.cfm?story=20050420&afl=yahoo
  • http://us.rd.yahoo.com/finance/external/forbes/SIG=1299rdilp/*http://www.forbes.com/facesinthenews/2005/04/14/0414autofacescan01.html?partner=yahoo&referrer=
  • http://biz.yahoo.com/bw/050322/225702_1.html
  • http://biz.yahoo.com/bw/050321/215826_1.html