4. A Very Brief History of Golf Origin 1452 in Scotland, as a game played by both Royalty and Commoners Growth In Europe Established game by 18 th Century in British Isles with tournaments, rules and golf clubs (St. Andrews) Growth In USA Started being played in late 1700’s, mostly as a game for wealthy. Rapid growth in popularity with TV coverage in 1950’s and the emergence of golf stars Palmer, Nicklaus, and Player. Peak in popularity in 1998, 2 years after Tiger Woods turned Pro. Governing Bodies United States Golf Association and Royal and Ancient Golf Club
8. PEST Analysis of the Golf Equipment Industry Category Issue Threats/Opportunities Ranking (1-5) Political USGA and R&A rules on equipment Threat 5 Economic 2008 Economy Sours Rising incomes in BRIC countries Threat Opportunity 3 3 Social Healthier, more active lifestyles Concern for environment Multiracial golf star Tiger Woods Opportunity Threat or Opportunity Opportunity 2 2 5 Technological New metals/alloys for larger, lighter clubs Computer technology for customer fitting Opportunity Opportunity 3 5
10. Overview of the Golf Market Total Number of Golfers 22.7 million in US, 2 million European, 17 million Asia (2007) Target Market 1/3 of golfers, about 7.5 million in US, considered “Core” and account for 91% of rounds played and 87% of equipment sales Growth Rate Number of golfers in America has declined 17% since peak in 1998 (from 27.5 to 22.7 million) Key Items Purchased Drivers, Irons, Wedges, Putters, apparel, shoes, golf balls, golf bags 4 Key Barriers for Consumers Too difficult to play Length of time it takes to play a round Too expensive Older players have health concerns
19. Strategy of Major Golf Brands Product Price Endorsements Innovation Callaway Diverse Drivers : 4 lines incl. Big Bertha Putters : Odyssey and premium black series Irons : X series (high end), Bertha, Hogan, Top Flite (low end) Other: Fairway woods, hybrids, footwear, balls Diverse Well defined price ranges on driver, putter, iron lines. Tight price ranges on fairway woods and hybrids Low 12 Staff Pros 7 Contract Pros Medium Two Ball putter Perimeter weighted irons, prepositioned weights on drivers, interchangeable shafts Slow to react to changes in regulation and consumer preference (driver size and hybrids) Fortune (Titleist/ Cobra) Diverse but focused Focus on Balls and Footjoy apparel . Drivers, Woods, Hybrids, Irons: Titleist line for pros and highly skilled rec. Cobra for rec and game improvement. Putters: Cameron (high end) and Cobra Diverse, well-defined High vs. low end Balls : Pro VI to Pinnacle (value brand) Clubs : Titlest, Volkey, Cameron vs. Cobra High 100 PGA pros to use V1 ball Medium Push limits of USGA regulations with Cobra L4V brand Perimeter weighted irons
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21. Strategy of Major Golf Brands Product : Be all things for all golfers. All major brands offer a spectrum of products to match a golfers level, recreational to pro. Price: Matched to level of product. Comparable across industry. Nike allows retailers to sell below MSRP Endorsements: Significant source of differentiation and brand recognition. Innovation: With the major brands having met the regulated limits, innovation is focused on increased launch angles and adjustable features. No significant innovations because of the regulations. Major brands are choosing to not go beyond the regulation specs. Operational: Key production activities are often contracted offshore. Major brands may just be an assembler.
22. What are the internal factors affecting golf equipment manufacturers?
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28. What are the strengths, weaknesses, opportunities, and threats of golf equipment manufacturers?