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 Weighted
Score
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
companys 3000 employees work.
New technologies and production methods turned the small golf club
manufacturer into the worlds 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 cont
Financial Ratio Analysis cont
Internal factor evaluation (IFE) matrix
Internal factor evaluation (IFE) matrix

Space Matrix
Space Matrix
Grand Strategy Matrix
The Internal-External (IE) Matrix
QSPM

QSPM