Callaway Golf Co. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Distribution:

The distribution of the company is based on selling its products and services in the United States and in other countries as well. The products of the company are distributed through retail shops. In addition to this, other distribution channels of the company include foreign subsidiaries, Callaway Golf Sales Company and global golf clubs as well. Shops that are off the course are spacious and thus give wider place for selection. In addition to this, the sales contribution from off-course shops are more than 65%, and off-course’s 1/3 part contributes to 2/3 part of the company’s overall sales.

On the contrary, on-course are the shops that are situated inside the golf courses and thus it is limited to selection. These shops are relatively small than the shops that are located off-course and have a limited number of products. Because of the limitation in terms of space and selection, on-course shops cannot make as many sales as produced by off-course shops. In addition to this, another reason behind low sales from on-course is that people there have not much products to sell as they have to do several other tasks as well.

A subsidiary of Callaway Golf Company ‘Callaway Golf Sales Company” is engaged in selling products directly to the wholesalers. The basic source through which these wholesalers sell the products is through customer reps, outside sales and in-house telemarketing. Salespeople who sell outside have other duties to perform as well and these include running demo days, physical inventory count and giving training to other sales people as well. Moreover, Callaway Golf Company also used international golf club distributors and foreign subsidiaries to make the products sale in approximately fifty countries worldwide.

In addition to this, the company is using premium pricing along with high quality of products. The rationale behind charging premium pricing is making no compromise on quality and gives an advantage to the company in terms of performance. The pricing strategy of CGC is also consistent and does not believe in price discrimination; therefore, offering same prices to every buyers irrespective of the volume they buy. Along with this, the company hardly permits retailers to make advertisement related to pricing on its products.

Rationale behind the success of CGC strategy:

There were several reasons behind the success of the strategy followed by the company. Out of all the reasons, one obvious reason was CGC’s superiority in terms of innovation. During the time frame from 1988 to 1997, the innovative strategies of the company were based on manufacturing of cutting edge products. In addition to this, most of the experienced golfers believed that the main reason behind their performance is the product that they are using and thus it gives performance benefit to the golfers and to the company as well. In addition to this, the overall condition of the golf industry is also the reason behind the overall success of the company. Along with all these factors, another factor that leads the company towards success was that the market is not yet saturated and thus the company has a chance to grow. Along with this, the sales of the company was not dependent on the internet, and this was another factor behind the successful strategy at Callaway Golf Company.

Transformation since 1997:

Because of the saturation stage of the golf market, market for premium equipment faced steep decline and by the end of 1998, the company had more or less eighteen various types of head clubs on a larger scale. In addition to this, all the companies in the market were aggressively engaged in introducing clubs that were extremely innovative in nature on a daily basis. Moreover, many golfers were former in comparison with their formal business buying cycle that in turn made purchasing new clubs more and more difficult in terms of justifying their buying.

The overall golf market was extremely competitive in nature from the beginning. Along with this, all the manufacturers in the market were keen to bring new and innovative style clubs in the market. Since 1997, the management of the company was engaged in the release of new products rapidly just to maintain its market share and competitive position in the market. Examples of the successful clubs include ping golf that gathers customer’s attention through their perimeter weighting, heel-toe and the level of customization they provide................................

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