What Are the Defining Characteristics of the Golf Equipment Industry? What Is the Industry Like?

1. What are the defining characteristics of the golf equipment industry? What is the industry like?

By the 1700s Golf had become the established sport but it was considered to be the game for wealthy people. With the TV coverage in 1950's and 1960's and the emergence of golf stars like Arnold Palmer, Gary Player and Jack Nicklaus golf become popular among general people. This rapid growth in popularity peaked in 1998 with 27.5 Million American golf players. With these emerging young new players in the market the demand for golf equipment shoots up. Golf equipment segment of the industry, which included golf clubs, bags, gloves, and footwear, accounted for approximately $4 billion of retail sales. Mid to late 1990's was a period of great innovation by premium golf equipment manufacturers like Ping, Callaway, TaylorMade, Fortune Brands (Cobra and Titleist). The technological innovation in golf clubs has many benefits. For example, the increase in driver size helps reduce the adverse effect of off-center hits, wedges were given more defined grooves to help improve accuracy on approach shots, and balls were designed to go further when tee off and better controlled on green. However, the technology improvement in golf equipment industry has limited by the USGA and R&A. Even though there are controversies about the limitations, the companies have to comply with the rule. Therefore it is hard for the industry to differentiate themselves by their product. This is an opportunity for those less developed technological companies to catch up with those leading companies. In the other way around this is considered as threat to the advanced technology.

In order to know the defining characteristics of golf equipment industry, we have to analyze the industry in terms of the industry's dominant traits: