Callaway Golf Company

Case summery

Vision

One good shot is not enough, so let's play Golf.

Vision & Mission

Mission:Callaway Golf Company is driven to be a world class

organization that design, makes and delivers demonstrably superior and pleasing different golf products that incorporate breakthrough technologies, backs those products with noticeably superior customer service, and generates a return on the shareholders in excess of the cost of capital. We share every golfer passion for the game, and commit our talents and our technology to increasing the satisfaction and enjoyment all golfers derive from pursuing that passion.

External Analysis• Threats:• TV rating is increasing for TV commercial.' • The catastrophic storm that not only affect the golf round during

the 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 global

market• The increase of Euro vs. Dollar had a negative impact on the

sales in Euro terms• Rule (Professional players are not allowed to play with a new

equipment.)• Massive amount of imitation the firm facing (Asian Pacific).• High rate of unemployment.• Increase in consumer debt level• Declining the consumer confidence and spending.

CPM – Competitive Profile Matrix

Key External Factors Weight Rating WeightedScore

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

Threats

TV rating is increasing for TV commercial. 0.06 3 0.18

The 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

Internal Analysis

• Strength• Callaway golf company products are designed and built on an eight-

building campus in Carlsbad, California, where the majority of the company’s 3000 employees work.

• New technologies and production methods turned the small golf club manufacturer into the world’s largest maker of premium golf club and a dominant force in the industry.

• Callaway designs, manufactures, and high-quality golf clubs and also sells accessories.

• Callaway Golf Company and its subsidiaries design, manufacture, and sell 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 previously

owned Callaway golf clubs toward the purchase of new Callaway clubs. this option has become popular for consumers looking to upgrade their equipment.

Internal Analysis

• Weakness• Callaway Golf Company experienced an operating loss of 25.6 million in

the gulf ball business due to the expansion of its production line, the reduction of prices to remain competitive, and to defend its market share.

• Callaway new product, the C4 driver, was supposed to capture a large portion of the market but did not; nonetheless, Callaway golf company financial position remains strong since the company has no long-term debt and high liquidity.

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

• Callaway marketing is limited and focused on promotion through professional players.

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

Financial Ratio Analysis

Financial Ratio Analysis con’t

Financial Ratio Analysis con’t

Internal factor evaluation (IFE) matrix

Internal factor evaluation (IFE) matrix

Space Matrix

Space Matrix

Grand Strategy Matrix

The Internal-External (IE) Matrix

QSPM

QSPM