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Altius Golf And The Fighter Brand Case Solution

Solution Id Length Case Author Case Publisher
490 2039 Words (7 Pages) Robert J. Dolan, Sunru Yong Harvard Business School : 913578
This solution includes: A Word File A Word File and An Excel File An Excel File

The market share of Altius Golf in both distribution channels has started to decrease at a rapid pace primarily due to a gradual shift in several trends of the industry such as the economic recession, decrease in a number of golf players, increasing prices of golf equipment, etc. Competitors of the company have already acted upon this situation by introducing cheaper products for targeting new potential customers. It is up to the top management of Altius Golf to decide something at the earliest so as to ensure the top position of the company in the market in the long run.

Following questions are answered in this case study solution:

  1. External Environment

  2. Internal Environment

  3. Key Marketing Issue

  4. Statement of Objectives

  5. Generation and Evaluation of Alternatives

  6. Recommendations

  7. Implementation Plan

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Case Study Questions Answers

1. External Environment

Opportunities
  • After almost nine years of a downward trend within the Golf sport industry, in the year 2012, the market has gradually started to recover due to the several efforts United States Golf Association and changing tactics of Golf equipment manufacturers. The market grew by at least 4.1% in the year 2012, as compared to 2011 figures.

  • A recent consumer report survey suggest that many new people are open for trying the Golf as a sport if the prices of equipment are reduced and the difficulty level of the game is reduced. This means that with the inflow of new cheaper equipment, hopefully, a wave of new non-serious players would come.

  • The number of agnostics in the market has increased by five percent during the period of five years, and it is expected that this trend will continue during the upcoming years so the market presents an opportunity for manufacturers to introduce equipment for this price sensitive group.

Threats
  • During the last decade, the number of people interested in the sport – Golf has decreased considerably primary due to the high difficulty level of sports, expensive golf equipment, and lack of time. In fact, the number has decreased by five million during the last ten years.

  • The global economic recession of 2008 – 2010 also created additional problems for stakeholders of the industry. Approximately 25% retailers closed off their shops; as a result, the power balance has shifted towards bog box stores.

  • Sales ratio has been shifting gradually towards street retailers from On-course pro shops where the equipment was sold slightly expensive as compared to off-course shops.

  • Investment in golf courses real estate’s have declined by 40 percent during the period of last four years due to declining interest of general public and economic recession.

2. Internal Environment

Strengths
  • Altius Golf is the only company in the market that has an access rate of hundred percent among retailers, which means it has a higher chance of selling its products than any other manufacturer.

  • Secondly, the brand has a long and rich heritage that is associated with the professional game, which means it is still the most recognized and credible player in the market.

  • The company has almost twice the budget for advertisement and marketing as compared to its next biggest competitor, which provides the company an opportunity to get ahead in the market.

  • Gross margins of Altius Golf are at least 10 – 15% higher than its competitors, which means the company has a reasonable option of playing with its price list.

Weaknesses
  • During the recent years, nearly 85% of total company’s profits were derived from the sales of Altius Golf Balls; however, competitors are fast catching up because of which the sales have start to decline.

  • The market share of the company has started to decline within the off-course channel. Considering the fact that the new shift in sales is towards off-course, this puts Altius Golf at a considerable disadvantage.

  • One in every three consumer avoids buying equipment from Altius Golf due to its high rate, which means the company is left with only 65% of customers to play around.

  • Competitors have already adapted to new industry trends such as introducing cheaper products for non-serious customers, which is the primary reason behind a reasonable surge in their market share and reduction in Altius Golf’s market standing.

  • Currently, the company produces absolutely no product for Value and Economy class of the market whereas, all other manufacturers such as Primiera, Bantam, Carlsbad, etc. have their products in all classes i.e. premium, mid-range, economy, and value.

3. Key Marketing Issue

The market share of Altius Golf in both distribution channels has started to decrease at a rapid pace primarily due to a gradual shift in several trends of the industry such as the economic recession, decrease in a number of golf players, increasing prices of golf equipment, etc. Competitors of the company have already acted upon this situation by introducing cheaper products for targeting new potential customers. It is up to the top management of Altius Golf to decide something at the earliest so as to ensure the top position of the company in the market in the long run.

4. Statement of Objectives

  • The first, and perhaps the most important objective of the company is to develop a new strategy that is sufficient enough to respond to new market challenges and at the same time strengthen the position of the firm as a market leader, both in terms of profit and market share by unit.

  • Secondly, now that the company has failed to capture the first mover advantage, it still has the opportunity of learning from mistakes of its competitors and develop a better strategy.

  • Third, to reiterate the focus towards off-course channels, which has become the new buying point for both serious as well as, casual golfers.

5. Generation and Evaluation of Alternatives

Alternative One: Introducing a New Brand

The current strategy of the company has failed terribly in maintaining its leadership position in the market and all trends direct towards the need of a cheaper line of products so as to attract new stream of golfers who do not aspire to play the sport on a professional level. So, the first option available to the firm is to introduce a new brand within the company, which is cheaper in price than its flagship brand. The idea is to introduce products within the Economy and Value class where the company currently has no products to offer. This strategy will allow the company to not only attract new golf players, but also to maintain its leadership position within the industry. Though this strategy would open doors for targeting an entire new group of potential customers; however, it will also pose several challenges such as maintaining the integrity and image of the flagship brand, ensure that the pricing architecture does not undermine, ensure that the gross profit margin of 70 percent is not hurt to a great extent, and a new cheaper brand does not hurt the affiliation of the company with professional golf, which appeals to more than two – third customers of the market who are playing the sport on a serious level and have associated high credibility and trust with the brand.

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