This document discusses competition in the golf equipment industry in 2005. It addresses the following key points: 1. The industry is driven by product innovation and celebrity endorsements. Major companies introduce new products every 12-18 months to drive growth. 2. Competition centers around technology innovation in club design, company image, and tour exposure. Barriers to entry are low but brand loyalty favors large players. Rivalry is high due to many competitors. 3. Over the next 1-3 years, the biggest influences will be continued product innovation, increasing globalization, and marketing innovations - which will intensify competition and likely increase industry profitability if demand rises.

1. Competition in the golf Equipment Industry
in 2005

4. Question 1 :What are the industry’s
dominant traits ?

5. Market size and growth rate
 PRODUCT innovation along with
celebrity endorsements are the key
factors for the growth of the
industry

6. Product Innovation
 Callaway golf company 1991 launch of
oversized big bertha drivers
 The manufactures of golf equipment
introduced new products at intervals of
12-18 months

7. Technology
 Competitive rivalry in the industry
centered on technology innovation in
club head and shaft design product
performance company image and tour
exposure ,New comers are more inclined
to add new techniques in the game for
which they like to experiment with the
different.

8. Question 2.
What kind of competitive
forces are industry
member facing

9. Threat of New Entrants/Entry Barriers
Factors HUF MU Neutral MFA HF Comment
 Economies
of scale
 Capital
required
 Access to
distribution
channels



Even small size
companies can compete
at low cost
A new entrant can
easily locally produce
and market its product.
product were available
in the market or direct
sales

10. Threat of New Entrants/Entry Barriers
Factors HUF MUF Neutral MF HF Comment
 Differentiati
on
 Brand
Loyalty
 Govt. Action



Little differentiation
among most competing
products.
Brand loyalty is for big
players
USGA, PGA

11. Exit Barriers
Factors HUF MUF Neutral MF HF Comment
Specialized
Assets
Governme
nt Barriers


Assets are not easily
convertible to other related
products
As such no government
barriers

12. The bargaining power of suppliers
Factors HUFA MUFA N MFA HFA Comments
No. of
important
Suppliers
Switching
cost
Threat of
forward
integratio
n



Fixed suppliers
Less differentiation
Stagnant Market

13. The bargaining power of Buyer
Factors HUFA MUFA N MFA HFA Comments
Number of
Important
buyers
Threat of
Backward
Integration
Switching
cost



Few buyers, Stagnant Mkt
No such issue reported again
Many product are available by
the different companies and
they have Low differentiation
so there is no such switching
cost

14. Factors HUFA MUFA N MFA HFA Comments
Profit
earned by
buyer
Quality of
Product 
 Stagnant Mkt
Product Innovation

15. The intensity of competitive rivalry
Factors HU MU N MFA HFA Comments
Composition
of
Competitors
Mkt. Growth
rate
Scope of
competition


 5 big competitors
Stagnant Market
Presence of
callaway,adidas,cobra,titleist,
ping,nike enhanced the scope
of competition to global level

16. Factors HU MUF Neu MF HF Comments
Capacity
Increase
Degree of
differentia
tion
Strategic
Stake 

 Callaway and other
companies increase there
capacity as per demand to
compete in the market and
also less golfers
Degree of differentiation
was little in spite of various
major players competing
Strategic Stake is high for
global competitors

17. Overall Industry Attractiveness
Factors Unfavorable Neutral Favorable
Entry Barriers

Exit Barriers 
Rivalry among
existing firms 
Power of buyers

Power of 

18.  QUESTION 3: forces exerted
greatest influence over next 1-3
year

19. Product innovation
Entry or exit barriers
Increasing globalization
Marketing innovation

20. a.
Are driving forces acting to cause
market demand for product to
increase or decrease
 These 4 drivers of change will increase or decrease the
demand for the product

21. Are driving forces acting to make
competition more or less intense
 Yes these forces make the competition between rivals
more intense

22. Will driving forces lead higher
or lower industry profitability
 As the demand for the products increased the
profitability of the industry will be higher

23. Strategic Map of the
Industry

24. PRODUCT INNOVATION
P
E
R
F
O
R
M
A
N
C
E
Callaway
TaylorMade
Titleist/Cob
ra
Ping Golf
Nike

25. Key Success Factors: CPM

26. Key Success Factors
 Technological Innovation
 Customization
 Direct Sales Distribution

27. CPM
Strategic Factor Weight Callaway Rating
Callaway
Weighted Score
TaylorMade
Rating
TaylorMade
Weighted Score
Technological
Innovation
0.4 7 2.8 6 2.4
Customization 0.3 6 1.8 6 1.8
Sales 0.3 9 2.7 8 2.4
Total 1 7.3 6.8
Strategic Factor Weight
Titleist/Cobra
Rating
Titleist/Cobra
Weighted Score
Ping Golf
Rating
Ping Golf
Weighted Score
Technological
Innovation
0.4 5 2.0 6 2.4
Customization 0.3 6 1.8 5 1.5
Sales 0.3 5 1.5 6 1.8
Total 1 5.3 5.7

28. CPM
Strategic Factor Weight Nike Rating
Nike Weighted
Score
Technological
Innovation
0.4 5 2.0
Customization 0.3 8 2.4
Sales 0.3 7 2.1
Total 6.5