BA401 case 3-4 GolfLogix

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BA401 case 3-4 GolfLogix

  1. 1. GolfLogix : Measuring the Game of Golf
  2. 2. GolfLogix : Measuring the Game of Golf <ul><li>GolfLogix was founded in May 1999 </li></ul><ul><li>Using GPS to aid golfers in playing golf </li></ul><ul><li>GolfLogix product consisted of a customized, handheld GPS receiver, called an “xCaddie” </li></ul>
  3. 3. <ul><li>GolfLogix’s system can indicate distance and record a golfer’s progress around the course. </li></ul><ul><li>At the end of the round, he could download this data and receive printout mapping his progress </li></ul>GolfLogix : Measuring the Game of Golf
  4. 4. The GolfLogix Distance Only xCaddie
  5. 5. The Game of Golf <ul><li>Invented in Scotland in the 15 th century and brought to the United States in the late 19 th century. </li></ul><ul><li>Use wooden or metal clubs to hit a small, hard ball into a cup on each of 18 different holes on a golf course. </li></ul><ul><li>Each swing a golfer took was called a stroke and counted toward his or her total score. </li></ul><ul><li>The number of strokes a player took through an entire round was the player’s score, with the lowest score winning. </li></ul><ul><li>The typical golfer used as many as 14 different clubs during a single round, including several woods, a series of irons, several wedges and a putter. </li></ul><ul><li>Each club was used to hit the ball a particular distance. </li></ul>
  6. 6. The GolfLogix Solution <ul><li>The concept for GolfLogix came in 1998 during a round of golf between Todd Kuta and Scott Lambrecht. </li></ul><ul><li>Lambrecht asked Kuta to estimate distance to the green and advise him on what club to hit for that distance. </li></ul><ul><li>Kuta noted that there ought to be a way to measure distance to the green. </li></ul><ul><li>Lambrecht suggested that GPS can help a golfer know the distance to the green. </li></ul><ul><li>They thought that it could do much more. It could record a golfer’s progress around the course with a detailed record of his round. </li></ul>
  7. 7. A Typical Three-Page Printout Following the Use of the Complete System
  8. 8. The Company <ul><li>Lambrecht and Kuta feel doubtful that “Under the rules of golf, is such a system legal?” </li></ul><ul><li>The USGA indicated that a GPS device couldn’t be used during tournament play. </li></ul><ul><li>They formally incorporated GolfLogix in May 1999. </li></ul><ul><li>In its short existence, GolfLogix had raised about $2million and taken on moderate debt. </li></ul>
  9. 9. The Company <ul><li>The company expected to incur operating expenses of about $50,000 to $75,000 per month, which it hoped to support out of operating revenues. </li></ul><ul><li>The task of selling the xCaddie systems had largely fallen to Pete Charleston, GolfLogix’s executive vice president of sales, and CEO Saltz. </li></ul><ul><li>Over time, the company planned to take on an increasing number of distributors. </li></ul>
  10. 10. The Underlying Technology <ul><li>The core technology for the GolfLogix solution was GPS, originally use in military. </li></ul><ul><li>GPS was gradually made available for civilian use, beginning in the 1980s. </li></ul><ul><li>By 2000 roughly 1 million GPS receivers per year were being manufactured for commercial use. </li></ul><ul><li>The GPS receiver employed by GolfLogix was manufactured by Garmin International. </li></ul>
  11. 11. Making the Solution Operational <ul><li>The Distance Only System </li></ul><ul><li>The Complete System </li></ul><ul><li>- ขอบเขตของ tee box,fairway and green. </li></ul><ul><li>-touch screen and printer </li></ul><ul><li>-GolfLogix website </li></ul>
  12. 12. Playing Golf with the GolfLogix Systems <ul><li>The Distance Only System </li></ul><ul><li>A golfer scrolled to the hole that he was playing, stood over or near his ball, and read the yardage to the green on the xCaddie’s digital readout. </li></ul><ul><li>The Complete System </li></ul><ul><li>Before each shot check the distance to the green, select the club and press enter over the ball. </li></ul><ul><li>On the green, scroll to Putter and press enter over the ball. Finish putting out and then enter the total number of putts. </li></ul><ul><li>Comfirm or edit the score and press enter to make corrections. </li></ul>
  13. 13. Instruction Card for the Complete System xCaddie
  14. 14. The U.S. Golf Market <ul><li>In 2000, 26.7 million Americans played 586 million rounds on just over 17,000 public and private courses around the United States. </li></ul><ul><li>Each year about 2 million new golfers began playing the sport, resulting in a net growth of 200,000 to 400,000 golfers per year. </li></ul><ul><li>Recently, the game had attracted more women and younger golfers through much of the 1980s and 1990s. </li></ul><ul><li>Nevertheless, the prototypical golfer was still male, over 40 years old and with a household income over $70,000. </li></ul>
  15. 15. The Golfer <ul><li>Golfers could be segmented in many different ways. </li></ul><ul><li>One basis was frequency of play. </li></ul><ul><li>A second basis was expertise, typically measured by a golfer’s handicap that was a historical average of how many strokes a golfer took for an entire round. </li></ul><ul><li>A third basis was based on the courses they played-public versus private. </li></ul>
  16. 16. Golf Courses <ul><li>As of 2000, there were slightly over 17,000 golf courses in the United States, most of which fell into one of four categories : </li></ul><ul><li>Municipal and lower-end public courses represented the backbone of golf in the United States. </li></ul><ul><li>High-end public courses offered more of a challenge than municipal courses, and attracted more avid and accomplished golfers. </li></ul>
  17. 17. Golf Courses <ul><li>Resort courses often gave preference to those staying at the resort. They tended to be of high quality. </li></ul><ul><li>Private courses represented the aspiration of many golfers. The quality of these courses tended to be very high, and members were charged accordingly. </li></ul><ul><li>New courses were being built in the United States at a rate of about 300 to 400 per year. The vast majority were higher-end public, resort, and private courses. </li></ul>
  18. 18. The Golf Professional <ul><li>The person responsible for running the golf-related activities at a course was the head professional. </li></ul><ul><li>He might be assisted by several employees and assistant pros. </li></ul><ul><li>The third responsibility was giving lessons. </li></ul><ul><li>A final responsibility and constant headache for pro shop personnel was managing the pace of play on the course. </li></ul>
  19. 19. Selling the GolfLogix solution <ul><li>About 80 percent of golfers are satisfied </li></ul><ul><li>Traditional sport and sensitive to adopt a new thing </li></ul><ul><li>Find the courses that are forward thinking </li></ul>
  20. 20. Distance only system’s benefits <ul><li>Better golf </li></ul><ul><li>Improve pace by play </li></ul><ul><li>Affordability </li></ul><ul><li>Portability </li></ul><ul><li>Ease of use </li></ul><ul><li>Ease of installation </li></ul>
  21. 21. Complete System’s benefits <ul><li>Game history </li></ul><ul><li>Performance Statistics </li></ul><ul><li>Personalized Web site </li></ul><ul><li>An aid to teaching </li></ul>
  22. 22. Competitions <ul><li>Distance;Low-tech solutions </li></ul><ul><li>-Yardage markers </li></ul><ul><li>-Sprinkler Heads </li></ul><ul><li>-Yardage Booklets </li></ul><ul><li>-Rangefinders </li></ul><ul><li>Distance;High-tech solutions </li></ul><ul><li>-Cart-moounted system </li></ul><ul><li>-PDA based system </li></ul>
  23. 23. An Example of the Information Contained in a Yardage Booklet
  24. 24. An Example of a Cart-mounted GPS System
  25. 25. An Example of a PDA-based GPS System
  26. 26. Performance Tracking <ul><li>Manual Records in Booklets </li></ul><ul><li>Software package for PDAs </li></ul><ul><li>What parts of their game were good </li></ul><ul><li>And what parts needed work? </li></ul>
  27. 27. Going Straight to Consumers <ul><li>After very limited sales in 2001, 2002 was showing lots of promise. </li></ul><ul><li>Over a dozen new courses had adopted either the Distance Only or Complete System. </li></ul><ul><li>Most courses that had agreed to a trial had subsequently signed lease agreement. </li></ul><ul><li>The units would retail for approximately $300 with a 50 percent to 60 percent gross margin, depending on volume. </li></ul><ul><li>But a device could capture 1 percent to 2 percent of veteran golfers. </li></ul>

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