Competition in Golf Equipment Industry in 2009
INTRODUCTION
In 2009, the world had seen an economic downturn all over the year. In January, Danish Parliament agreed to a financial package worth 17.6 billion USD. In response, markets panicked. At the same time, four US banks had lost half of their values since three weeks ago. Down Jones Industrial Average Index had dropped more than 50% from its October 2007 peak.
On March, Bank of England provides 150 billion pounds of quantitative easing, increasing risk of inflation. On June, World Bank projected that global production for 2009would fall by 2.9%, the worst since the World War II1.
Otherwise stated, the U.S. and Japan market is analyzed as they –in 2014 make up 70% of the global golf retail market2.
The financial crisis in 2009 resulted in the decrease of power of purchase in the US, as depicted in the below graphic, proxied by its consumer price index.
Figure Historical U.S. and Japan CPI showing decreases in year 2009. Source: rateinflation.com
In a survey3, more than 50% of respondent quit playing golf because they think it is too expensive. Now the logics are, global economy downturn caused many previously-active-golf-players quit the game. Consequently, consumer purchases of golf supply/equipment declined by 16% compared to 20084.
The drop in sales, forced major golf equipment manufacturer review their business strategy. From changing business model, improve the golf equipment technology and features, looking for niche market, and so on.
Figure Consumer spending on golf equipment
In the next section, strategic analysis is conducted. It comprises discussion on the manufacturer business model, competitive advantage, vision-mission statement, and how they changed course of business strategy. The next section will discuss external environment of golf equipment business and analyze its dominant economy characteristic, Porter’s competitive forces, rivals, and strategic map. Last section would brief conclusion on the golf equipment
In 2009, the world had seen an economic downturn all over the year. In January, Danish Parliament agreed to a financial package worth 17.6 billion USD. In response, markets panicked. At the same time, four US banks had lost half of their values since three weeks ago. Down Jones Industrial Average Index had dropped more than 50% from its October 2007 peak.
On March, Bank of England provides 150 billion pounds of quantitative easing, increasing risk of inflation. On June, World Bank projected that global production for 2009would fall by 2.9%, the worst since the World War II1.
Otherwise stated, the U.S. and Japan market is analyzed as they –in 2014 make up 70% of the global golf retail market2.
The financial crisis in 2009 resulted in the decrease of power of purchase in the US, as depicted in the below graphic, proxied by its consumer price index.
Figure Historical U.S. and Japan CPI showing decreases in year 2009. Source: rateinflation.com
In a survey3, more than 50% of respondent quit playing golf because they think it is too expensive. Now the logics are, global economy downturn caused many previously-active-golf-players quit the game. Consequently, consumer purchases of golf supply/equipment declined by 16% compared to 20084.
The drop in sales, forced major golf equipment manufacturer review their business strategy. From changing business model, improve the golf equipment technology and features, looking for niche market, and so on.
Figure Consumer spending on golf equipment
In the next section, strategic analysis is conducted. It comprises discussion on the manufacturer business model, competitive advantage, vision-mission statement, and how they changed course of business strategy. The next section will discuss external environment of golf equipment business and analyze its dominant economy characteristic, Porter’s competitive forces, rivals, and strategic map. Last section would brief conclusion on the golf equipment