Callaway Golf Company

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Callaway Golf Company Problem statement: Callaway golf clubs were the gold standard in the industry, however, in 1998 sales dropped by 17% and CGS experienced a loss of $27 million. Ely Callaway, Callaway Golf Company’s (CGC), founder, chairman and chief executive officer is considering improvements in the below mentioned three areas, to turn things around. 1. Product development: What products should be developed? 2. Improve retail partnership 3. Refocus marketing campaign. Recommendation: * Product Development CGS strength has been its R&D and quality. Exhibit 3: shows that the Metal wood product type sales in 1998 is decreasing by 8% compared to 1997, however, the sales of irons and putter, accessories has gone up. Exhibit 1: shows how the company has steadily increased its R&D expenditure to $36.5M in 1998. Investing in R&D is essential for CGS to stay on top in the industry, so, I will recommend them to continue with their R&D to come up with innovative products. * Retail partnership CGC did not provide volume discounts and their credit terms were also tight compared within the industry. CGC needs to improve its relation with the retail partners by providing volume discounts and relaxing the payment cycle to match the current standard within the industry. * Marketing campaign Ely Callaway should launch a comprehensive web site and promote buying and selling online. There is a huge potential and a huge section of customers in in online shopping. Launching a online shopping website will promote marketing and will also see the increase in sales of golf bags, accessories and balls produced by CGC. Ely Callaway to expand their business internationally to tap into potential new

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