The Wall Street Journal has an interesting article on how TaylorMade has come to dominate the golf industry. Here’s the setup:
TaylorMade hasn’t just blown away Callaway, it now positively dominates the business. Last year in the U.S., TaylorMade captured 47% of every dollar spent on woods (drivers, fairway woods and hybrids), according to Golf Datatech, the industry’s leading market-research firm. That’s up from 26% in 2007 and a mere 11% of the driver-only market in 2002. In irons last year, it hauled in 25% of all sales, up from 16% in 2007. No other company comes close. Callaway, though still No. 2 in clubs overall, has slouched back closer to the pack. Its sales have declined 26% since 2007, while TaylorMade’s in that period are up 21%.
And the summary of the path TaylorMade took to get there:
How did the company pull it off? Primarily by a relentlessly aggressive management style—“pushing the envelope on every front,” in the words of Chief Executive Mark King—aided by some gambles that paid off, a series of missteps by Callaway and a recession poorly timed for everyone but TaylorMade.
Much of it, though, is due to TaylorMade’s deep pockets and constant deluge of new clubs:
This constant deluge of new clubs is a boon to TaylorMade’s marketing—there’s always something fresh to hype—and a challenge for poorer competitors to compete against. It’s analogous to a big corporation outlawyering weaker opponents. When other companies were forced to scale back costs during the recession that hit golf hard starting in 2008, TaylorMade, backed by its German parent, Adidas Group, turned up the heat. It suffered only one down year, 2009, and then only 2% in overall sales.