callawaygolfcompanycgc-110330093402- callaway golf company case analysisphpapp02

7/21/2019 callawaygolfcompanycgc-110330093402- callaway golf company case analysisphpapp02

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Callaway Golf Company


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Case summery


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Vision

One good shot is notenough, so let's play

Golf.


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External Analysis

Threats:

TV rating is increasing for TV commercial.'

The catastrophic storm that not only affect the golf round duringthe storm but also for a significant period of time.

The war in Iraq and it impact on the economic and political

condition. The decline of the number of golf round played around USA

Facing different economic and comparative situation in the globalmarket

The increase of Euro vs. Dollar had a negative impact on thesales in Euro terms

Rule (Professional players are not allowed to play with a newequipment.)

Massive amount of imitation the firm facing (Asian Pacific).

High rate of unemployment.

Increase in consumer debt level

Declining the consumer confidence and spending.


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CPM Competitive Profile Matrix


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Key External Factors Weight Rating Weighted

Score

Opportunities

Owning subsidiaries in different parts of the world like Korea,

Australia, Japan, and Canada

0.05 4 0.20

Not many athletic good manufacturers are expanding in the golf

market.

0.06 3 0.20

World population is aging and many older individuals both play golf

and have flexible income to purchase golf equipment.

0.04 4 0.16

Increase of the number of the golf round played in New England state,

Mid-Atlantic state, and parts of south west.

0.08 2 0.16

Internet as distribution channel 0.07 2 0.14

External Factor Evaluation (EFE) Matrix


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Threats

TV rating is increasing for TV commercial. 0.06 3 0.18The catastrophic storm that not only affect the golf round during the

storm but also for a significant period of time.

0.05 3 0.15

The war in Iraq and it impact on the economic and political

condition.

0.08 4 0.32

The decline of the number of golf round played around USA 0.09 3 0.27

Facing different economic and comparative situation in the global

market.

0.05 2 .10

The increase of Euro vs. Dollar had a negative impact on the sales in

Euro terms

.09 3 .27

Rule (Professional players are not allowed to play with a new

equipment.)

.09 3 .27

Massive amount of imitation the firm facing (Asian Pacific). .05 4 .20

High rate of unemployment .03 2 .06

Increase in consumer debt level .04 4 .16

Declining the consumer confidence and spending .07 2 .14

Total 1.00 2.98

External Factor Evaluation (EFE) Matrix


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Internal Analysis

Strength

Callaway golf company products are designed and built on an eight-building campus in Carlsbad, California, where the majority of thecompanys 3000 employees work.

New technologies and production methods turned the small golf clubmanufacturer into the worlds largest maker of premium golf club and adominant force in the industry.

Callaway designs, manufactures, and high-quality golf clubs and alsosells accessories.

Callaway Golf Company and its subsidiaries design, manufacture, andsell high-quality golf clubs and gulf balls for both the average and

professional players. Employment system is very adjustable.

Callaway consumers can receive trade-in allowances on their previouslyowned Callaway golf clubs toward the purchase of new Callaway clubs.this option has become popular for consumers looking to upgrade theirequipment.


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Internal Analysis

Weakness

Callaway Golf Company experienced an operating loss of 25.6 million inthe gulf ball business due to the expansion of its production line, thereduction of prices to remain competitive, and to defend its market share.

Callaway new product, the C4 driver, was supposed to capture a largeportion of the market but did not; nonetheless, Callaway golf companyfinancial position remains strong since the company has no long-termdebt and high liquidity.

Rapid introduction of new golf clubs or golf balls could result in closeoutof existing inventories at both the wholesale and retail levels. Closeoutsresult in reduced margins on sale of order products, as well as reduced

sales of new products. Callaway marketing is limited and focused on promotion throughprofessional players.

It is very difficult for the company to track the imitations, which results inhigh administration cost and loss of revenues.


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Financial Ratio Analysis


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Financial Ratio Analysis cont


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Financial Ratio Analysis cont


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Internal factor evaluation (IFE) matrix


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Internal factor evaluation (IFE) matrix


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Space Matrix


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Space Matrix


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Grand Strategy Matrix


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The Internal-External (IE) Matrix


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QSPM


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QSPM


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callawaygolfcompanycgc-110330093402- callaway golf company case analysisphpapp02

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