Calloway Callaway Golf Case Study Research Proposal

Excerpt from Research Proposal :

Ratio Analysis

Profitability Ratios

ROA % (Net)

ROE % (Net)

ROI % (Operating)

EBITDA Margin %

Calculated Tax Rate %

EBT

Sources Used in Document:

Consider the text's chapter 8 Product Development & Commercialization strategic and operational process steps. In your opinion, which strategic and operational process steps in chapter 8 would Callaway Golf Company benefited most from using in the year 2000? Be specific (i.e. support your answers using PAGE NUMBERS and QUOTATIONS FROM the TEXT) and concise in your answers.

Despite the insistence of Ely Callaway and others that innovation, not market orientation or market planning should dominate the company's direction, they are in fact racing into a more mature market and do need to stay attuned to market demands. The first phase of the product development and commercialization process states that "corporate and marketing strategies should influence idea generation for products." (pg. 135) This is counter to the heavily innovation-based approach that Callaway has engrained into its culture. Second, Callaway tends to have their R&D function running independently of all other strategies and functional areas. As a result, by 1999, the company has earned the reputation of flooding the market with new product introductions, a strategy competitors can easily follow through product line extensions. The focal point of the product line race going on are the trade shows in Las Vegas and Florida where dealers evaluate new clubs to consider carrying. This proliferation of new products is meant as a strategy of outdistancing the competition yet is leading to confusion within the distribution channels as customers' salespeople grapple with how to sell existing golf club lines, often not having time to study and effectively sell the new ones. As the books states on page 136 "A proliferation of products and product variations might cause complications with little or no payoff."

R&D as a function needs to also be defined through guidelines established through cross-functional product development team leadership as well. Within the context of the case study Callaway is not actively involving Customer Relationship Management and Supply Chain Management, two critical areas that can help R&D appreciate the constraints of the broader market and also provide greater insights into how R&D can make greater contributions to the value chain of the company. As is stated in the book, "The involvement of the process team from customer relationship management and supplier relationship management is central to managing the relationships across the supply chain (pg. 137)." Lastly Callaway needs to concentrate on having better focus on the strategic objectives behind each new product development effort, instead of just launching new products for the sake of speeding new product introductions through the industry. As the books states on page 140 "...better management of the product development and commercialization process can lead to sales increase as a result of rolling out successful new products, improving product availability, retaining existing customers and also attracting new customers." Taken together these are critical objectives for the company to base each specific product development project on, and selectively choose those that will lead to the greatest potential increase in profitability.

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