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Ely Callaway founded the Callaway Golf Company, originally called Hickory Stick USA, INC. , in 1982. The company started out specializing in hickory-shafted putters and wedges that were demonstrably superior and pleasingly different. In 1988 the company expanded its product line to include a new set of irons that it designated as the S 2 H 2 (Short, Strait, Hollow Home). This design combined a cavity back iron with an innovative with perimeter weighting, a progressive offset and a bore-through shaft with an innovative shortened home that moved weight from the home to the clubs effective hitting area.
The company also changed its name to Callaway Golf Company in that same year. In 1989 Callaway began to offer a metal woods that incorporated the S 2 H 2 design philosophy that produced a much more efficient weight distribution throughout the club and consequently a better feel to the golfer. Both the driver and woods were made with steel graphite shafts instead of the heavier hickory ones. By the end of 1990, the S 2 H 2 Driver was # 1 on the senior PGA tour. These new innovations caused an increase in from $ 10. 3 million in 1989 to $ 21. 5 million in 1990.
Callaway entered the 1990 s with the strategy of offering a new and differentiated line of oversized metal woods that they felt would revolutionize the industry. The first of these clubs was named after the World War I cannon, the Big Bertha. This club would again take the basic design of the S 2 H 2 club and make dramatic improvements that resulted in golfers being able to obtain straighter shots from hits the were off-centered or in other words missed the sweet spot. Golfers showed their approval of the new club by boosting Callaway's 1991 sales totals to $ 54. 7 million.
By the end of the 1992 season, Big Bertha Drivers were ranked as the # 1 drivers and the Senior PGA, the LPGA and the Nike (then Hogan) Tours. The companys sales more than doubled that year to a new total of $ 132 million. The company made its Initial Public Offering on February 28, 1992 with the New York Stock Exchange; the stock has split three times since that date. In 1994 the Richard C. Helmestetter Test Center was opened greatly expanding the companys research and development capabilities and paving the way for better enhancing golf club performance and the development of new club designs.
Later that same year Callaway released the Big Bertha irons and an improved metal wood that featured the war bird sole plate. Year-end sales again soared to $ 448 million. 1995 saw the release of the next generation Great Big Bertha Titanium Driver that sported a longer shaft and larger club head design while maintaining the lighter feel of previously released models. By the third quarter of that same year Calloway Golf Company had become # 1 in sales of woods and irons and year-end sales topped $ 448 million. 1996 would prove to be another big year for Calloway with five major product introduction s: the new and improved Big Bertha irons, the Great Big Bertha Titanium Fairway woods, Big Bertha Gold Irons, Big Bertha Tour series Wedges and Bobby Jones Putters. Year-end sales would increase again to $ 678 million.
During the same year, the Callaway Golf Ball Company was established and estimates that the first product will be released in the year 2000. In early 1997 Calloway introduced the Biggest Big Bertha Titanium Driver and the Great Big Bertha Tungsten Titanium Irons. The company also purchased the assets of Odyssey Sports, Inc. , the manufacturer of the best-selling Odyssey Putter. 1997 sales reached $ 843 million. In 1998 the X- 12 Irons came on the scene accumulating more than 100, 000 orders within three weeks of their availability, making them Calloway's best selling stainless steel irons to date. Since then the X- 12 has became the companies best selling iron in history.
At the PGA International Golf show in August of 1998 Calloway came through with more new products by introducing the Big Bertha Steelhead Metal Woods and Little Bertha golf clubs for children. Ely Callaway also announced that he would be reassuming the roles of President and Chief Executive Officer of the company. "January 18, 1999 Callaway Golf gave golf club Technology a whole new twist with the introduction of its latest product breakthrough: Great Big Bertha Hawk Eye Titanium Metal Wood with new Tungsten Gravity screw. "The design of each club head includes: (1) an extremely lightweight, very thin titanium crown plate; (2) a super-strong solid titanium face and lower body; and (3) a heavy Tungsten Gravity Screw to achieve the precise weight location and extremely low center of gravity. Callaway Golf company promoted Chuck Yash to the post President that same year and was designated to succeed Mr. Callaway as CEO by December 31, 2000. Callaway also introduced Hawk Eye Irons in late 1999. The company employs more than 2, 400 people and has 8 facilities that total a combined 728, 000 feet of office, packaging, shipping, research and production spaces. 1.
What is the competition like in the golf industry? The Golf industry is broken into three competitive groups. The low end or more affordable models such as Wilson, Mcgregor and Spalding that are often found and discount stores like K-mart and Wal-Mart that are sold at a reasonable price and are sometimes the club of choice for the beginning and occasional golfer. But what often happens is the beginner will buy these clubs and play them for a season or two and be influenced by the games addictive nature to spend the money for the better quality clubs in order to improve their games. The knock-off brands that try and imitates the higher quality club manufactures and offers their products at a much lower price. These companies include such names as; King Snake, Spanky and Canterbury the maker of Big Bursar irons.
These companies try and copy the general styling of the higher end clubs but come up way short in club head balance and shaft designs. The third competitive group is the top end or higher quality club manufacturers that includes Calloway along with Karsten Manufacturing makers of Ping name brand clubs, Taylor made and Cobra Golf who is not ranked as high as the others in quality. What competitive forces seem to have the greatest effect on industry attractiveness? The fierce rivalry among the top end golf club producers to gain their share of the golf club market. This is evident by the jockeying for position by signing well-known and winning professional golfers on the PGA, Senior PGA and LPGA tours.
This was such an important aspect of the industries competitive characteristics that many professional golfers were given very lucrative stock shares and other incentives to endorse one brand or the other. This is also visible in the places that these firms chose offer their products to the general public. Each of the top end clubs is found in either course pro-sh...
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