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Callaway golf company
Varun N Visawadia

Callaway&Golf&Company&!
Objec2ve:!

Callaway!Golf!Company!(CGC)!faced!a!loses!of!17%!a6er!enjoying!50%!margin!for!10!years.!The! objecAve!here!is!to!analyze!reasons!for!losses!and!recommend!ways!and!means!to!overcome!it. Value&Proposi2on&of&CGC:

High!Performance!products,!High!Quality,!Excellent!Customer!Service,!Brand!Equity,!Proven!
technologically!advanced!working!equipment,!One!Ame!investment!for!Average!golfers,!
PresAgious!for!Skilled!Professionals.
Company

Customer

Collabatotars

Competition

Context

Golf equipment manufacturer Average golfers

Retailers at wide locations Taylor Made

Emergence of new manufacturers

Known for high quality products

Loyal customers

Provide facilities for trial

Small companies with cheap products More business in off-course retail shops Strong R&D

Skilled golfers that rely on brand equipment Extremely competitive market

Product innovation was now becoming difficult Subsidiary - CGC
Sales Company

Product

Price

Promotion

Place

High in performance

Premium price

Sales people both inside and outside

63% sale in US market S2H2

One price policy

Word of mouth

Weight balancing technique for clubs

Expensive($1000/kit)

Less media coverage
No discount on bulk

Varun N Visawadia

Sales&predic2on&for&next&two&years:&

In!2!years,!we!can!esAmate!increase!in!sales!due!to!rigorous!adverAsing!and!reTorganized!sales! force!and!other!expenses.!(Refer!addendum!for!calculaAons) Assump2ons!:

R&D!costs!to!be!same

Net!sales!to!be!increased!around!15%!for!next!2!years!as!number!of!golfers!is!increasing!300!to!
400!every!year

Cost!of!Goods!sold!also!increases!by!15%

Selling!expenses!increase!by!20%!(comparing!with!previous!years)

General!&!administraAve!expenses!increase!by!2%

R&D!cost!increase!by!2%!

Restructuring!cost!keeping!$60,000!constant!for!next!2!years

Income!Tax!=!!20%!

Callaway's&strategy&from&1988E1997&:&
Research&and&Development&&
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