Ruilai Shi 04/26/2014
Golf Equipment Industry Case Study

The Porter’s Five Force analysis shows that the golf industry remains attractive and competitive. It is still attractive and has high intensity of competition because it has little threat from new entrants and the bargaining power of the suppliers is low even though it may have counterfeit problems. Meanwhile, it also does not have too many substitute products, but the existing firms in the industry is competing intensively against each other and the bargaining power of the buyers is relatively high.

The intense competition generated by the existing firms in the industry is the most important factor in determining the overall attractiveness and competitiveness. The reason is that all leading companies are trying hard to make innovations and customize their products for different consumers so that they can own a greater share of the market. At the same time, due to the limitation on the technology used on the golf equipment, it is harder for the manufacturers to differentiate their own products, which means the differences between high-end and low-end products are shortened, and this can lead to fierce competition on price. Since it is hard for a single manufacturer to stand out from the competitors, the existing firms may put more emphasis on enhancing their image rating by signing endorsement contracts with those well-known golf professionals. At the same time, the whole industry does not have too many competitive pressures from new entrants because most golfers have high brand loyalty. They tend to believe their favorite professionals and copy their choices. Another reason of the low threat from new entrants is that the whole golf equipment market is shrinking. During recession,