The introduction of new rules that limit innovation in the Golf Equipment Industry (GEI) is a major reason for the slow growth in the number of golfers in the recent years. In addition, the global financial crisis that began in December 2007 to 2009 had a devastating effect on the number of golfers in the GEI.
Competitive rivalry force was the most affected among the Porter’s five forces (Gamble 11). This force determines the value that is created in an industry through head-to-head competition among firms. Competition within the GEI was centered on technological innovation, which was permitted initially by the United State Golf Association (USGA) and R&A (Gamble 11).
Product innovation, performance, image, tour exposure, and price were among the other competitive strategies that companies used and by 2009, every company had met the required equipment dimensions, CT, and MOI (Gamble 8). The companies had started to differentiate their products as an innovative survival strategy in the industry.
The golf equipment manufacturers had relied on innovation to enhance their competitive positions in the market (Gamble 7). For instance, between 1990 and 2000, the golf equipment manufacturers came up with innovations to make the golf easier to play.
These innovations reduced the effects of the adverse off-center hits. At the same time, the innovations improved the shot accuracy by grooving the wedges of the stick. This reduced the variance in the distance of a well struck ball and a poorly struck ball.
However, the USGA took an important step to safeguard the pre-historic golf courses and equipment standards. This involved setting of new quality standards for the golf equipment. This reduced the innovation rivalry in the industry, leaving the companies to use equipment prices as the only competitive approach.
This discouraged people from playing golf (Gamble 9). According to the case study, the decline in the number of golfers is attributed to these changes. Golfers were increasingly frustrated by the difficulties they encountered while playing golf. This resulted in many golfers denouncing the sport. In addition, new individuals were reluctant to take up the sport.
Another factor that led to the decline in the number of golfers was the economic recession that occurred between December 2007 and 2009 (Gamble 10). According to the case study, the recession was caused by the financial problems in the credit and housing industries as well as a rapid increase in gasoline price. For instance, gasoline price increased from $2.25 in early 2007 to $4 by June 2008.
The high gasoline prices coupled with an increase in credit expenses and a destabilized mortgage industry led to discretionary spending cuts. In addition, increased unemployment contributed to this problem. For instance, more than 6.5 million Americans lost their jobs. These events led to the decline in the number of golf equipment sold in the market.
In conclusion, it is important to restate the reasons for the decline in the number of golfers in the industry. The introduction of new rules and standards in the industry reduced innovation-based competition (Gamble 11).
Moreover, the economic recession that was witnessed between 2007 and 2009 is blamed for the decline in the number of golfers (Gamble 10). I recommend that the reintroduction of equipment innovation by the USGA should be done so as to foster competition in the industry. This would increase the number of golfers in the sport in the long-run.
Works Cited
Gamble, E. John. Competition in the Golf Equipment Industry. London, UK: McGraw Hill, 2009. Print.