Case Study on Golf Equipment Industry Essay

Words: 3158
Pages: 13

The industry overview

The retail sales of golf equipment industry, which includes golf clubs, bags, balls, gloves and footwear, declined from approximately $4 billion to about $3 billion in 2003 and then rebounded to around $3.8 billion in 2007 with many threats remaining. The changes in the retail value of golf equipment industry are closely related to the total number of golf players and total rounds of golf played in the country. The participation rate of golf has dropped approximately 21% from 27.5 million in 1998 to 22.7 million in 2007, being the largest decrease rate during the same period among selected sports and recreational activities including bicycle riding, fishing, hunting, running, swimming, tennis and workout at fitness
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Most golfers have a very high degree of loyalty. They are highly likely to stick to the brand that they were using and normally have strongly believes to their favourite touring professionals’ choices. Along with the high technological product designs that influence most buyers’ purchasing decisions, it has made the entry barriers very high for this industry.
c. Almost all existing manufactures are experiencing unpleasant profit grows in recent years.

However, opportunities for new entrants still exist for low-end golf gears market under the current regulatory conditions. The new comer may be profitable only if it completes the following goals:
a. Become a fast & exact copy cat and compete on a low price.
b. Be able to find reliable & low cost suppliers overseas.
c. Originally has or be able to build good distribution channels, imaging Kmart or Target to have their “home brand” golf gears.

3. The competitive pressures from the sellers of substitute product raises from:
a. The raising number of counterfeit equipments produced in China, selling online at attractive prices and ship to the world.
b. The overall difficulty of the game, time consuming issues and the high golf fees are the three main barriers for recreational golfers. The current economic crisis had forced many families to cut their spending on leisure activities. As presented in Exhibit 2 of Gamble’s original case, while the participation rate for golf was decreasing, the rate for