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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
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?
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
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…


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
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

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

reasons for playing golf less
Reasons for Playing Golf Less
  • 2003 Survey from the National Golf Foundation
  • 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