Реферат: Callaway Golf Case Essay Research Paper Contents1
The main threats are the following:
golf is to be seen as seasonal and might be affected by unusual weather conditions
subjective preferences of golf club purchasers may be subject to rapid and unanticipated changes
Generally there is no guaranty that a return on company s R&D investments will be realized, threat of consumer rejection
Insecurity if markets allow the company to achieve cost advantages because of economies of scale
Failure to successful distribute in Japan because of cultural differences
Company is affected to the impact of foreign currency fluctuations (monetary differences may result in less competitive markets)
Dependencies on raw material prices
As main opportunities we can define the following:
very good standing because of consideration of market and technology leader
good reputation and possibility to expand in other sport goods markets
if subjective preferences of club purchaser will not be subject to significant changes Callaway implied changes in its structure will lead to advantages in production and distribution.
The golf ball business could turn very profitable because of the characteristics of the golf ball and Callaway s good reputation
If market further increases Callaway would draw benefits from economics of scale
4.4. THE COMPANY S PRICES AND COSTS
In 1999, the company achieved a gross margin of 47%, which indicates that the company is profitable. With the restructuring program implied in 1999 the company will produce even more efficient. Especially the decrease of general and administrative expenditures by 13% will have positive effects.
4.4.1 ANALYSIS OF THE COMPANIES COMPETITIVE POSITION
Value chain analysis
The value chain analysis describes the activities within and around an organization, and relates them to an analysis of the competitive strength of an organization.
The primary activities are the following:
Inbound logistics
Callaway is dependent on a limited number of suppliers, but believes that it would be possible to find alternative suppliers in case. However, many of the materials are customized for Callaway and there is a certain dependency on suppliers and in case of interruptions this would lead to negative consequences. The same is valid for raw materials. There is no tendency to backward integrate suppliers notable, the company tends to concentrate itself on its core competences.
Operations
At Callaway Golf the manufacturing area run by Ron Drapeau. During the phase of restructuring he made in possible to increase efficiency and increase output while maintaining the determined level of quality.
Outbound logistics
Callaway Golf restructured as well its distribution channels and actually possesses wholly owned distribution companies. Callaway Golf still believes that on a long term basis controlling the distribution of their products in the worlds major markets will be an key element for future success. However, in Japan for example, may occur problems because of cultural differences therefore it is not probable that the sales there will notably increase.
The company mainly uses United Parcel Service for ground shipments to its costumers. Part of the restructuring of the company was the identification of alternatives to reduce its reliance on UPS.
Marketing and sales
The company reduced its selling expenses by 3 % (as a percentage of net sales), which was attributable to reductions in advertising, pro tour and other promotional expenses. In 1999 USD 131,9 million were spent for selling, which includes USD 55 million for advertising and promotion.