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Callaway Golf Canada

Callaway Golf Canada Case Analysis

Callaway Golf Canada Case Analysis

Callaway Golf Canada is a fully-owned subsidiary of a North-American-based golf clubs and equipments manufacturing company, Callaway Golf Company. Established in 1982, Callaway Golf Canada has been serving the local market with its highly innovative, stylish, and best quality golf equipments. The Callaway Golf business was started from a small scale golf club manufacturing company and kept on expanding in various arenas of the same industry. Now Callaway Golf Canada offers a wide range of high quality and modernized golf products and has become one of the most successful golf products manufacturing giants of the North-American region. The success of Callaway Golf Canada can be attributed to the brilliant entrepreneurial mind of Ely Callaway who always wanted to keep it grow and remain on the No. 1 position in the industry.

Major issues facing the Callaway Golf Canada Management:

To keep the crown of market leadership on its head and strategize to compete in the industry more diplomatically and sophisticatedly, the Management decided to launch some program that could distinguish it from all its competitors. The Mobile Performance Team (MPT) Program was launched to introduce new as well as improve the existing customer services offered by the Company. Now the biggest issue for Callaway Golf Canada is the success of this program.

Succinct Problem Statement:

"The Management is conscious towards keeping the Company on the most competitive edge, while at the same time, ensuring a sustainable future in the golf products manufacturing industry."

The Management wants to ensure that the Mobile Performance Team (MPT) will significantly contribute towards making the Callaway Golf Canada the most competitive organization in the industry by providing the real value to the key stakeholders. The Management also wants to discover the significance of this program from economic perspective.

A. Internal Environment Analysis of Callaway Golf Canada

The internal environment analysis constitutes the strengths and weaknesses of an organization as compared to the other competitors in the industry (Perreault & McCarthy, 2002). By analyzing the areas in which an organization specializes and the areas where it needs improvements, the management of that organization can make better business decisions and can pave its path towards a remarkable success in the industry (Kotler, 2010). The following section explains the internal environment analysis of the Callaway Golf Canada by highlighting its core strengths and major weaknesses:

1. Strengths of Callaway Golf Canada:

The biggest strength of Callaway Golf Canada is its highly innovative golf playing equipments and products. The products manufactured by Callaway Golf Canada have a very high level of acceptability among the golf players from all over the World.

The parent company -- Callaway Golf Company is a pioneer in the golf clubs manufacturing in the United States. The public image of this well-established company helps its subsidiary in building and maintaining the stakeholders' trust and confidence.

Callaway Golf Canada has a sound financial strength which makes it stand on competitive grounds and invest anywhere it wants to. Due to high stock prices, a growing sales volume, and handsome profit margins, Callaway Golf Canada does not face any issues regarding financial resources.

Callaway Golf Canada not just gives focus on the product design (the outer looks and features of the golf playing equipments), but also on the process design (the quality, reliability, and durability) of the products. It has never compromised on the quality of its products which distinguishes it from most of the competing firms in the industry.

Callaway Golf Canada has adopted various distribution channels to make its products available in every area of the American region which radically increases the sales potential.

2. Weaknesses of the Callaway Golf Canada:

Although Callaway Golf Canada has achieved a market leading position in its industry, but the lack of focus on its diversified business operations seem to be its biggest weakness. Callaway Golf Canada offers a wide range of products related to golf sports, but the Management keeps its major focus on the operations related to golf clubs manufacturing. This is the reason why the sales volume of many other product offerings is not as high as that of golf clubs and balls.

Callaway Golf Canada operates at a large level in North-America, but it does not expend much on the market research and customer surveys. Kotler, Brown, Burton, Dean, & Armstrong, G. el at. 2010 believe that marketing research is one of the most essential processes that an organization must undertake to succeed competitively and in a well-organized way. On the other hand, if the competitors of Callaway Golf Canada are dedicating a considerable portion of their budget on market research, they are stronger than Callaway Golf Canada as they exactly know what their customers want them to offer.

B. Analysis of the External Environment of Callaway Golf Canada

The external environment is much broader than the internal environment and constitutes a number of forces that may directly or indirectly impact the business operations of an organization (Kotler, 2010). This section explains the external environment of Callaway Golf Canada which will be helpful in judging its business potential, opportunities, threats, and the effects of different environmental forces on its business.

1. Potential Opportunities for Callaway Golf Canada:

The Golf sport equipments industry has always been on a fast growing pace since the popularity of this sport in the World. Golf is very much liked and played at a vast level in the United States. Keeping in view this growing trend, Callaway Golf Canada can take advantage from its well-established brand image and invest as much as it can in this industry (Oliver, 1999).

Callaway Golf Canada can focus on all its product offerings in order to bring its sales to a higher level and gain a bigger market share. The products that have the lowest level of acceptability can be discarded from the product ranges and that money can be invested in the other successful products.

In order to capture more customers, Callaway Golf Canada can expand its business operations geographically and enter other markets in the United States.

To improve its customer services and increase the brand loyalty of its prestigious customers, Callaway Golf Canada should get feedback from every customer and implement their suggestions on immediate basis (Oliver, 1999).

2. Threats for Callaway Golf Canada:

The biggest threat for Callaway Golf Canada is the top market leaders in the industry that are providing the same high quality products at same price ranges. The high end marketing and promotional strategies of these competitors are posing a big threat in the form of a battle for greater market share, stronger customer base, and higher sales volume.

The day by day increasing fuel and raw material prices and heavy costs of business operations are also a threat for its profit margins and a sustainable growth.

3. The Competitive Environment:

Callaway Golf Canada has to face an intensified competition from the well-established and financially strong market leaders in the local market. The competitors of Callaway Golf Canada are present in its every product line; therefore it has to keep an eye on the strategic moves and tactics of each of those competitors in order to survive in the industry.

The main competitors in the golf balls, Driver fairway woods and irons, and putters category are Taylor Made-Adidas Golf, Fortune Brands, Ping, Dunlop Sport, Sumitomo Rubber Industries, Bridgestone Golf, Nike, etc. These all competitor companies are giving a stiff competition to Callaway Golf Canada with one or more of their brands against each product offered by it.

In addition to the well-established market leaders, Callaway Golf Canada also competes with various small scale new entrants in the golf products manufacturing industry. All the competitors are using different operational strategies and marketing tactics to boost up their sales and snatch market share from their opponents. These tactics include; a significant cut in the product prices, improved customer services, and presenting some renowned sportsperson in their advertisements. Moreover, many companies make agreements with the large retailers in the potential markets to make them restricted from serving the other competitors.

4. Economic Factors:

The increasing demand for Callaway Golf Canada products was badly hampered by the financial crunch in many economies of the World, but it managed to survive due to the increasing popularity of golf sports in the host country and neighboring regions. The fuel prices, raw material prices, and highly expensive plants and machinery are the major costs that are putting a financial burden on its profitability.

5. Demographical Forces and Social Values:

Americans love sports; golf is one of the most liked sports of the present times. But the majority of the players belong to the upper income groups of the society. The increasing trend towards playing this sport and easy membership terms are the key attractions for Callaway Golf Canada and its customers respectively. The MPT program is launched to make the customers feel the most enjoyable sports experience. The program is launched in the Canadian region as it is the area of origin of this company and will better find out its level of success in the eyes of potential customers.

A Statement and Analysis of the Major Options for solving the Problem:

Is the MPT program effective enough to make the Company operate with the most competitive standing in the industry or not? The financial and human resource requirements for this program will decide how much focus the Management should give on it.

The main problem for the Company's Management is to know the effectiveness of this program. According to Hitt, Ireland, & Hoskisson, (2007); the effectiveness of some business strategy is best evaluated from its results. The only way to get the desired outcomes is to provide the best quality products complemented by the best customer services. Callaway Golf Canada wants to provide the best possible value-added services to it every customer. The best option to solve the aforesaid issue and to ensure the success of this program is to arrange the relevant training and development sessions for the MBC teams. Secondly, the Company can increase its focus and emphasis on the quality of its production processes to produce even better quality golf equipments. Also; to resolve the issue of human resource requirements, the company can make teams and groups consisting of members from different areas of its business operations. The technical staff will apply the customer-fitting tests and procedures and the MBT staff will provide the products and services as recommended by the technical staff. Another issue is the limited coverage areas due to less number of staff in the MBC team. To resolve this issue and cover a wider area in providing these services, the Company can arrange more staff, both from inside and outside its workplace. The bigger team will be able to provide customer services to a larger number of customers per day. The Company should not only target the private club members, but also the ones that have not yet taken any membership but could be made a potential customer through this MBT program.