Us Golf Industry

Question 2: Analyzing the effects of industry evolution by using industry life cycle model? What does the model tell you about the changing industry conditions?

Depending on the stage of the industry life cycle, the marketing strategy should vary to meet the changing conditions. As shown in the graph above, in 2007, the golf equipment industry is in the shakeout stage because the demand is increasing but in decreasing growth rate. Since municipal and public golf courses in US are available for Americans across wide range of income level unlike in Europe and Asia, there was few potential American first time buyers left. Moreover the recent economy has had a downturn; the golf industry has reflected this. Golf on most consumers list has moved towards the bottom deriving in disposable incomes and salaries decrease. This is also result in a declining in the number of golfers and the number of rounds played.

Competitive pressures are more severe during the shakeout stage because good counterfeits were nearly exact copies of original products with very low price. Supplies from each producer remain high according to past growth rate hence there excess capacity. Producers often cut prices to sell their products which leads to price war and drives some of producers into bankruptcy.

In the conditions of shakeout stage, Golf Equipment producers have following strategies options.

1. Cost leadership Strategy

The cost leadership is often driven by company efficiency, size, scale, scope and cumulative experience. Cost leadership Strategy usually targets a board market by selling at the average or below the average industry price to gain market share from other small producers. As the industry matures, the firms that can produce more cheaply will remain profitable for a longer period of time.

2. Focus Strategy

The focus strategy concentrates on a narrow segment which its need can be better serviced. The producers who adopt focus strategy often gain high degree...