Golf market is very diverse with different equipment products
Golf market is very diverse with different equipment, products and accessories so there is a lot of potential in golf market.
Major part of revenue chunks come from various products like drives & woods, irons putters, wedges, golf balls, footwear, gloves and golf bags.
Callaway golf company:
2008
2007
2006
Net sales
$1,117,204
$1,124,59
$1,017,907
Operating income
$84000
$90000
$37000
Taylor made-adidas golf business unit:
2008
2007
2006
Net sales
812M
804M
856M
Operating profit
78M
65M
73M
Fortune golf:
2008
2007
2006
Net sales
$1,369M
$1400M
$1313M
Operating profit
$125M
$118M
$166M
According to the net sales and operating profit of the callaway increased slightly between 2006 and 2007 .
And in the year of 2008 sales decreased from $1,124M to $1,117M. In 2004 callaway sales went to -3% but after that upto 2008 its increased to 8%.
While seeing net sales and operating profit of Taylormade-adidas, In the year of 2006 sales of the Taylormade-adidas its approximately $955.44M and $897.40 in 2007 so it is decreased in sales between 2006 and 2007 Finally in 2008 sales rose to $906.33M.
Fortune golf sales decreased in 2008 when compared to 2007 and the year of 2007 sales is greater than the 2006 sales it rose from 13M to 00M.
While comparing all these industries callaway having the good financial results.
Best coping force:
In this case study Taylormade-adidas having a best coping force because They are having raised profit margin value in the year of 2008. Profit value of the Taylormade-adidas varying year by year even though profit margin of the taylormade-adidas more than the Callaway. Taylormade-adidas got increased profit in footwear and clothing. During 2007 The profit was 8.08% but In 2008 it increased to 9.61%. Even though metal equipment sales down they still dominating in the golf market.
To reduce the over expenses they are decided to outsource their production.
Effect of recession:
Not only USGA and R&A performance limitations and decline in number of golfers but also recession of 2008 & 2009 affected golf industry.
Many factors have triggered the recession which began in 2007. Recession inflated prices of all consumer goods and sports equipment. It all started with rises in prices of gasoline from $2.25 per gallon in 2007 to $4per gallon in 2008. The increase in prices forced consumers to cut back on discretionary.
The unemployment rate rose from 5% in 2008, 10% in 2009 due to loss of jobs.
All these led to force consumers to share money instead of spending it which directly hit the golf manufacturers on their sales and profits.
To improve their financial and market performance they should develop their brand outside of the US market. It will help to escape from recession. Approaching new country’s customers and encouraging women into the golf industry will help to improve their financial performance. For example Asia contains huge amount of customers compared to US and Europe so this all golf equipment manufacturers having good scope in Asia.
To become a best competitor, They all have an opportunity to develop their research and development section. By using golf players feedback they can develop their product design better than other products. Technologically improved product design will give better competition in the golf industry. Registering patent rights for their innovations will help to protect their products from the piracy.
Callaway should produce their products according to the customer needs If they did that they will influence the golf market. Making products with better durable than other companies will help to hold their customers and also it will help to attract customers.
Taylormade-adidas wants to develop their Marketing and branding aspects. For example If they develop their website and online sales they will become the best competitor in the golf equipment market.
Fortune should invest on their research and development to find innovations, Producing an innovative equipment under the rules and regulations will help to become a tough competitor. Reducing over expenses and avoiding unnecessary contracts recommended for for fortune golf equipment manufacturing industry.
