Callaway Golf
...ods, irons and putters combined for the past 7 years1 Hundreds of professional golfers and over 7 million amateurs use and represent Callaway equipment Sponsor some of the biggest names in golf, including Annika Sorenstam, Phil Mickelson and Arnold Palmer2 Weaknesses Sales declining due to poor economic conditions Two significant changes at top-level management (resignation of CEO and COO) since August, 2004 because of slump3 Price of shares cut in half to under $11 per share since spring 20043 Net income has fallen 77%, despite an 18% rise in sales, as Callaway slashed prices3 Odds of being bought out are growing3 Research and development spending has run flat lately even as overhead has grown3 Generated cash flow of $46 million in first three quarters of 2004, compared to $140 million in 20033 Environmental Analysis Industry Company Case Competitive Competitive advantages are driven by technological advancements in product development Callaway has strong brand awareness and leads industry in market share Big industry players are after Callaways market share Social 30,730 courses worldwide and 57 million golfers4 110% more Europeans playing in last decade7 Poor economic conditions have lead to decrease in discretionary spending on Callaways premium priced products Extreme increase in popularity worldwide Played in all continents except Antarctica Technological Oversized stainless steel drivers are common among all brands Innovators of oversized drivers Constant efforts to improve golf club technology Regulatory Efforts to improve golf club technology are regulated by USGA in North America and Royal and Ancient Golf Club of St. Andrews for the rest of the world Golf rules and regulations influence design of Callaway products ERC driver ruled non-conforming by United States Golf Association, but approved for play in rest of the world by Royal and Ancient Golf Club of St. Andrews Economic Gener...