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Introduction
Company Background
Callaway Golf Company was founded by Ely Callaway in late 1982. Ely Callaway’s creed was the concept of “providing a product that is demonstrably superior to what’s available in significant ways and, most importantly, pleasing different.”
Ely Callaway noticed that since the 1920s most golf equipment had changed very little and believed that many golfers would purchase technologically advanced golf equipment if it would improve their game. Putting together a team of aerospace and metallurgical engineers, they developed the most advanced golf clubs ever produced. In 1996 Callaway Golf had become the world’s largest manufacturer and marketer of golf clubs with sales of more then $678 million. ...
Graph 1 Callaway’s Product Sale
Callaway Golf led the golf equipment industry through the mid 1990s with new and innovative lines of clubs. In 1996 the company also introduced a line of golf apparel that was available through an exclusive licensing agreement with Nordstrom.
On September 4, 2003 Callaway acquired Top-Flite Golf Company. The acquisition brings to the company three new brands, Top-Flite, Strata and Ben Hogan, that will help the Callaway brand to diversify and gain market share.
Overall Callaway golf has good market share and have been profitable every year from 1993 to 2002 with exception of 1989. Graph 2 shows revenue and income for Callaway.
Graph 2 Callaway Revenue and Net Income
Competitors
The golf club market is highly competitive, and is served by a number of well-established and well-financed companies with recognized brand names, as well as several new companies with popular products. For example, in 2002, Nike began marketing and selling golf clubs that compete with the Callaway’s products and several golf club manufacturers in Japan have announced plans to expand their businesses in the United States. ... Callaway believes that it is the leader, or one of the leaders, in every golf club market in which it competes. ... com the following are the best clubs in 2003:
Top 10 New Drivers of 2003
1) Callaway ERC Fusion
2) TaylorMade R500 Series
3) Titleist 983E
4) Adams Redline
5) Callaway Great Big Bertha II
6) Photon Titanium Pro
7) Tour Edge Bazooka JMAX
8) Dr. Feel Titanium Series by Feel Golf
9) Nicklaus Airmax 430
10) MAC Powersphere by Burrows Golf
Top 5 New Irons of 2003
1)TaylorMade rac Series
2) Ben Hogan Edge CFT
3) Adams Idea a1 Hybrid
4) Wilson Deep Red Tour II
5) Precept Tour Premium EC603
Top 5 New Putters of 2003
1) Bobby Grace Amazing Grace MOI
2) Ben Hogan Big Ben by Bettinardi
3) Nike Oz
4) Odyssey White Hot 2-Ball Blade
5) Ping G2i
Top 5 New Fairway Woods of 2003
1) Sonartec SS-02
2) Adams Redline
3) TaylorMade V Steel
4) Wilson Deep Red II Distance
5) Callaway Great Big Bertha II
The premium golf ball market is also highly competitive. There are a number of competitors manufacturing golf balls, including Titleist, Nike, Spalding, Sumitomo Rubber Industries (Srixon), Bridgestone (Precept), MaxFli (now Taylor Made) and others. These competitors have established market share in the golf ball business, with Titleist having an estimated market share in excess of 50% of the premium golf ball business in the United States.
Top 5 New Golf Balls of 2003
1) Titleist Pro V1x
2) Precept U-Tri Tour
3) Nike TA2
4) Dunlop 65u
5) Precept Lady Diamond
Product Strategy
The purpose of this section of the paper is to demonstrate Callaway Golf Company’s strategy with each product. ...
Drivers
Callaway Golf’s driver strategy has been consistent since 1990. ... That strategy centered on utilizing technology to create golf clubs that are superior and have more utility for their target market. In 1990, Callaway introduced the Big Bertha driver. ... Its design gave the clubhead a larger sweet spot which allowed a player to miss-hit or strike the golf ball off-center of the clubhead and not suffer much loss of distance or accuracy. ... With the release of the Big Bertha, Callaway revolutionized the driver industry and propelled Callaway to the forefront of golf companies. The Big Bertha met the standard of Callaway by building a driver that “is demonstrably superior to what’s available in significant ways and, most importantly, pleasingly different. ...
Callaway continued to spend money in research and development after the advent of the Big Bertha. ... Callaway captured market share with innovative technology throughout the 1990’s.
Current Strategy
Since Callaway introduced the Big Bertha drivers they have had difficulty developing innovating products since. In 2001 Callaway introduced a carbon fiber club called the C4 that had great control and feel but terrible distance. ...
In 2003, Callaway released another carbon composite driver, the ERC Fusion Driver. The ERC Fusion is the most technically advanced golf club ever engineered. ...
Strategy Problems and Missed Opportunities
Since the Biggest Big Bertha hit the market, Callaway has yet to put out anything truly innovative like other Big Bertha Drivers. Callaway hopes that the ERC Fusion driver will again capture the imagination and market share of golfers.
There was an error in Callaway’s marketing strategy to call their last popular driver, the Biggest Big Bertha. ...
Competitors were able to leverage Callaway’s innovation to build clubs that competed for market share. Callaway truly underestimated the speed at which competitors copied Callaway technology and came out with competing drivers.
The Callaway drivers have traditionally been a premium golf club. When competitors came out with clubs that had the same look and feel as the Big Bertha drivers that were priced significantly less, Callaway lost market share.
Approximate Word count = 4666
Approximate Pages = 18.7
(250 words per page double spaced)
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