Golflogix and the Xcaddie
GolfLogix has just launched the xCaddie, a GPS based device that aids golfers in estimating the distance to the next green. As things look up financially for the company with leases to golf courses and increasing awareness, the company ponders whether it wants to explore the retail channel. Through this case analysis, we explore the various paths before GolfLogix and recommend a course of action.
Company & Product
GolfLogix Inc., a three year old company with just six employees, has introduced an innovative product to the conservative world of golf. The xCaddie aims to improve the golfer's game by displaying the distance to the next hole. This information can then be used to select the appropriate golf club. As golf grows in popularity among a diverse cross-section of the population as shown in Exhibit 1, GolfLogix hopes to cash in on this trend.
After some success with leasing the xCaddies to golf courses, GolfLogix is considering targeting the individual consumer directly with its product. The potential advantages of this method would be :
To increase adoption by individual consumers thus putting pressure on the courses to buy into the complete system and get their golf courses mapped
To provide a complementary source of revenue separate from the lease revenue to golf courses
Some disadvantages however would be :
The personal xCaddies would be useless on courses which were not already mapped out. Newly mapped courses could not automatically be added to the library of courses on existing devices
A rising personal ownership of xCaddies may discourage courses from buying their own devices killing a continuous source of revenue for GolfLogix
If the retail channel is pursued, customers would expect all courses they frequent to be mapped involving a large incremental cost for each golf course. Even if a golf course is mapped, there is no guarantee that xCaddie owners will ever golf there. On the other hand, individual xCaddie owners may demand
Company & Product
GolfLogix Inc., a three year old company with just six employees, has introduced an innovative product to the conservative world of golf. The xCaddie aims to improve the golfer's game by displaying the distance to the next hole. This information can then be used to select the appropriate golf club. As golf grows in popularity among a diverse cross-section of the population as shown in Exhibit 1, GolfLogix hopes to cash in on this trend.
After some success with leasing the xCaddies to golf courses, GolfLogix is considering targeting the individual consumer directly with its product. The potential advantages of this method would be :
To increase adoption by individual consumers thus putting pressure on the courses to buy into the complete system and get their golf courses mapped
To provide a complementary source of revenue separate from the lease revenue to golf courses
Some disadvantages however would be :
The personal xCaddies would be useless on courses which were not already mapped out. Newly mapped courses could not automatically be added to the library of courses on existing devices
A rising personal ownership of xCaddies may discourage courses from buying their own devices killing a continuous source of revenue for GolfLogix
If the retail channel is pursued, customers would expect all courses they frequent to be mapped involving a large incremental cost for each golf course. Even if a golf course is mapped, there is no guarantee that xCaddie owners will ever golf there. On the other hand, individual xCaddie owners may demand