TaylorMade Rise & Fall

[skeedawg]

Mygolfspy.com, a site the reviews a lot of equipment, has an interesting 2 part series on the story of TaylorMade. Basically, they needed to come up with a means to disrupt the market, did a great job of this on their way to generating almost $2B in revenues, and then in an effort to keep pace with their success made a number of poor decisions, and mismanaged their lineup horribly. Now adidas is looking for a buyer...

http://www.mygolfspy.com/the-rise-and-fall-of-taylormade-part-1/

http://www.mygolfspy.com/the-rise-fall-of-taylormade-part-2-the-empire-crumbles/

[Tat14]

Nicely written article.

Began drinking TM kool-aide with the R11s, which I still have and like playing. Followed the hype and tried the SLDR white and mini. Played both RBZ and Speed Blade irons.

After the constant barrage of new product, I started looking at other companies. The lure of very recent product at reduced cost was part of my attraction to TM. When that started to fade, so did my interest.

Interesting to see it from inside the company. I am curious to see what TM's new owner does with the brand.

 

[newtogolf]

Great article.  I'm a bit surprised that TM and Adidas management couldn't see what the rest of the world was seeing and thinking about their brand.  The golf store I handle marketing for decided to stop carrying TM when they launched JetSpeed because of the exact reasons cited in the article.  

The cycle is reverting back to how things were before TM started the "metal woods race" and hopefully with more reasonable product life cycles, the remaining manufacturers will be able to sustain their margins and stay in business.  

[iacas]

3 hours ago, newtogolf said:

Great article.  I'm a bit surprised that TM and Adidas management couldn't see what the rest of the world was seeing and thinking about their brand.  The golf store I handle marketing for decided to stop carrying TM when they launched JetSpeed because of the exact reasons cited in the article.

They saw it.

Mark King made a comment in that show about how they churn out new clubs nobody needs every three weeks.

[skeedawg]

I came back into golf after all of this had happened so it pretty much passed my by. When I started back I was still playing with my circa 97 big Bertha woods and some knock off pings. I went to get fitted and ended up with a set of speedblades which I've liked. Then I upgraded my driver to the R15 a few months later. And then added an XR 3 wood. I like my set currently but there seem to be so many better options especially around irons now that I'm a bit more educated. 

I think the biggest effect of all of this I've seen personally is with my local golfsmith. Some days it is just dead in there. You could hit the simulators all you want till close. A bigger golfsmith on the other side of town is the same. Like 8 bays that all sit empty a lot. 

[CarlSpackler]

I was a TM guy dating back to the TI Bubble II. When the R11 came out, I stayed with my R7 because I hated the white. Then when the SLDR came out, I tested it and hated the feel. After I bought my Cobra driver, I had a TM rep for me with an SLDR and it felt great, but it was too late. I told him that they should train the guys at Golfsmith to do what he did to sell more drivers. 

[Brian W]

I will say the R7 was revolutionary for me.  It was my first driver that I could hit very well.  I never messed (and still dont) with any of the weight distribution as I prefer to just hit the club.  Having the weights didn't do anything for me but I hit that driver for many many years.

I have tried a variety of their irons but do not care for them much.  I also do not care for how often the new clubs come out with a higher price tag than the last.  One of my partners bought all new M series Driver, 3w, and hybrid.  I have tried them and they feel okay but I still prefer my current setup

[GolfLug]

I don't agree that TM wounds are self inflicted to the extent the article insists. Don't think it would have made much difference even if they hadn't gone through so many quick releases. TM rode a rising wave of a huge technological break through for a decade. It is STILL making good product and STILL has a lot of market share. Only absent it the double digit growth slope. If it was permanently sustainable, it wouldn't be called 'growth'. It's an oxymoron. That isn't exactly a failure. That's like calling Tiger Woods a failure since he is not winning majors at two a year clip anymore.

Real/tangible improvements don't come from a bottomless pit, plus others eventually figure out to get the same improvements -

"Hey Loui, we didn't grow 13% this quarter like we did last quarter, why don't you run up to the 'innovation' closet and grab me a couple"..

"Sure, how about a couple of racing stripes?"

"Oh yeah, thems look so FAST! ......We are back baby!" ..  

 

[Kalnoky]

I think this has a lot to do with "brand burnout" (as someone quoted in the article said). I've heard people snicker at the mere mention of TaylorMade. All very surprising to me, I didn't know any better when I started playing what to buy.

I have the SLDR hybrids and the little rubber pocket plus the weight in the front seems to help me a lot. I really trust those clubs. The previous brand of hybrids I had I could never get off the ground, much less hit straight. If TM has any unsold product sitting around from several years ago they can kindly send it to me!

 

[newtogolf]

4 hours ago, GolfLug said:

I don't agree that TM wounds are self inflicted to the extent the article insists. Don't think it would have made much difference even if they hadn't gone through so many quick releases. TM rode a rising wave of a huge technological break through for a decade. It is STILL making good product and STILL has a lot of market share. Only absent it the double digit growth slope. If it was permanently sustainable, it wouldn't be called 'growth'. It's an oxymoron. That isn't exactly a failure. That's like calling Tiger Woods a failure since he is not winning majors at two a year clip anymore.

Real/tangible improvements don't come from a bottomless pit, plus others eventually figure out to get the same improvements -

"Hey Loui, we didn't grow 13% this quarter like we did last quarter, why don't you run up to the 'innovation' closet and grab me a couple"..

"Sure, how about a couple of racing stripes?"

"Oh yeah, thems look so FAST! ......We are back baby!" ..  

 

Did you read the article, TM management basically is acknowledging their product approach and market approach is what caused them to rise and then decline.  The combination of rushing products out without proper testing (SLDR, JetSpeed) and their approach to discounting clubs made it impossible for them to maintain their market share and profit margins.  

[GolfLug]

30 minutes ago, newtogolf said:

Did you read the article, TM management basically is acknowledging their product approach and market approach is what caused them to rise and then decline.  The combination of rushing products out without proper testing (SLDR, JetSpeed) and their approach to discounting clubs made it impossible for them to maintain their market share and profit margins.  

Yes, and I don't agree with them (TM). Some reason, it always becomes an absolute imperative that blame (or root cause) has to be assigned, and even in self assessment people can get close vision and lose sight of the larger picture that nothing they did would have sustained the rate they got used to. Not saying they did not take the missteps they are acknowledging but IMHO the impact of those missteps is over-stated. They could have taken the perfect steps, paced their market releases perfectly like Titliest does, or not been so 'arrogant' or not rolled the dice on their CEO selection and still would have 'declined'.

My base statement is that that kind of growth rate is inherently unsustainable. The growth was because of good tangible innovations, not because of fancy adds. When meaningful and separating innovations ran out, so did the growth. There are too many good players in the market that were and di eventually catch-up. This was bound to happen (i.e., decline in growth). I mean they still have 30% of market share, make solid products and are still profitable. It's not like they are in process of filing bankruptcy or anything.

The few 'screw ups' like Jetspeed and SLDR, etc. don't amount to having to put the company on sale. I used to have a Jetspeed and the thing hit a ton.

They are on sale by Adidas because the low hanging fruit is gone, not because there is none to be had.

[newtogolf]

40 minutes ago, GolfLug said:

Yes, and I don't agree with them (TM). Some reason, it always becomes an absolute imperative that blame (or root cause) has to be assigned, and even in self assessment people can get close vision and lose sight of the larger picture that nothing they did would have sustained the rate they got used to. Not saying they did not take the missteps they are acknowledging but IMHO the impact of those missteps is over-stated. They could have taken the perfect steps, paced their market releases perfectly like Titliest does, or not been so 'arrogant' or not rolled the dice on their CEO selection and still would have 'declined'.

My base statement is that that kind of growth rate is inherently unsustainable. The growth was because of good tangible innovations, not because of fancy adds. When meaningful and separating innovations ran out, so did the growth. There are too many good players in the market that were and di eventually catch-up. This was bound to happen (i.e., decline in growth). I mean they still have 30% of market share, make solid products and are still profitable. It's not like they are in process of filing bankruptcy or anything.

The few 'screw ups' like Jetspeed and SLDR, etc. don't amount to having to put the company on sale. I used to have a Jetspeed and the thing hit a ton.

They are on sale by Adidas because the low hanging fruit is gone, not because there is none to be had.

What innovation are you referring to?  The marketing was much stronger than the technology innovation they claimed in their ads.  The white head was more about making their clubs stand out on television (stolen idea from Canon DSLR lenses) than it was about any technology otherwise they and others would be making white club heads.  

[Natural Patrick]

39 minutes ago, GolfLug said:

Yes, and I don't agree with them (TM). Some reason, it always becomes an absolute imperative that blame (or root cause) has to be assigned, and even in self assessment people can get close vision and lose sight of the larger picture that nothing they did would have sustained the rate they got used to. Not saying they did not take the missteps they are acknowledging but IMHO the impact of those missteps is over-stated. They could have taken the perfect steps, paced their market releases perfectly like Titliest does, or not been so 'arrogant' or not rolled the dice on their CEO selection and still would have 'declined'.

My base statement is that that kind of growth rate is inherently unsustainable. The growth was because of good tangible innovations, not because of fancy adds. When meaningful and separating innovations ran out, so did the growth. There are too many good players in the market that were and di eventually catch-up. This was bound to happen (i.e., decline in growth). I mean they still have 30% of market share, make solid products and are still profitable. It's not like they are in process of filing bankruptcy or anything.

The few 'screw ups' like Jetspeed and SLDR, etc. don't amount to having to put the company on sale. I used to have a Jetspeed and the thing hit a ton.

They are on sale by Adidas because the low hanging fruit is gone, not because there is none to be had.

I had no major complaints with the SLDR set I played with.

[GolfLug]

16 hours ago, newtogolf said:

What innovation are you referring to?  The marketing was much stronger than the technology innovation they claimed in their ads.  The white head was more about making their clubs stand out on television (stolen idea from Canon DSLR lenses) than it was about any technology otherwise they and others would be making white club heads.  

Adjustable COG with movable weights for draw/fade bias, hot face (COR) woods and SLDR (COG towards face rather than towards the back) were all genuinely good innovations. White head, racing stripes, graphics type that you mention are obviously aesthetics that don't give yards, forgiveness or improved ball direction in a tangible way. Others did not make white heads because I would think they didn't want to be called out for being lame copycats. That would be TOO obvious.

Look, others like Callaway, PING, Titliest, Cobra (Titleist) all have caught up in optimized fitting, better harmonized clubhead to shaft (and even grip) combinations, crown materials, adjustable COG locations, max COR, etc., i.e., anything that truly gave TM woods/drivers a noticeable advantage, they all offer one or more of those too now. The performance distinction is all but gone. Something that happens in most industries with similar competition scene.   

Anyway, I have no disagreement that their eyes got bigger than their stomachs, and they lost control at some point similar to when you put dish detergent in a dishwasher (don't try it!). But I don't think these were fatal as the article/Erb seems to insist. Heck I would say any of the other OEs would have behaved similarly if they came upon the kind of innovation driven windfall that TM did.

If Adidas chose too they can become conservative TODAY and get back to a solid performance company. They do still make great products. I just don't think Adidas has that much interest left in it.   

[newtogolf]

55 minutes ago, GolfLug said:

Adjustable COG with movable weights for draw/fade bias, hot face (COR) woods and SLDR (COG towards face rather than towards the back) were all genuinely good innovations. White head, racing stripes, graphics type that you mention are obviously aesthetics that don't give yards, forgiveness or improved ball direction in a tangible way. Others did not make white heads because I would think they didn't want to be called out for being lame copycats. That would be TOO obvious.

Look, others like Callaway, PING, Titliest, Cobra (Titleist) all have caught up in optimized fitting, better harmonized clubhead to shaft (and even grip) combinations, crown materials, adjustable COG locations, max COR, etc., i.e., anything that truly gave TM woods/drivers a noticeable advantage, they all offer one or more of those too now. The performance distinction is all but gone. Something that happens in most industries with similar competition scene.   

Anyway, I have no disagreement that their eyes got bigger than their stomachs, and they lost control at some point similar to when you put dish detergent in a dishwasher (don't try it!). But I don't think these were fatal as the article/Erb seems to insist. Heck I would say any of the other OEs would have behaved similarly if they came upon the kind of innovation driven windfall that TM did.

If Adidas chose too they can become conservative TODAY and get back to a solid performance company. They do still make great products. I just don't think Adidas has that much interest left in it.   

Other vendors like Mizuno offered movable weights on a track in 2007 / 08.  Why TM was more successful is they took those concepts and combined it with a better marketing plan to build hype.  

Adidas has it's own issues, the two Dassler brothers (Adolf and Rudolph, founders of Adidas and Puma respectively) sought world domination of the sport shoe industry.  Initially they focused on field and track, then soccer and it expanded to all sports.  

I wouldn't be shocked if Adidas only acquired TM and poured money into it just to boost sales of their golf shoes and apparel.  Adidas now has a well established position in golf shoes and apparel so the need for a golf hard goods division that isn't maintaining the expected level of profit margins is no longer critical to the business and can be sold off.  

[Rainmaker]

Interesting article - oddly, perhaps, I was a fan of TM drivers *until* RocketBallz.  I thought the R11 was fantastic looking.  I wanted one . .except I never buy new drivers.  That is probably, in large part, because of Taylormade . .why buy a new driver for big $$ when you can wait a little bit and get it way cheaper used? 

Then RocketBallz came out and TM lost me.  I hated the name, hated the commercials, etc.   

 I never did get an R11 - I still have and use my Burner.  It's pretty well time for me to get a new (used) driver.  In the past I barely considered other brands but this time it's highly likely my new driver will not be a TM. 

I've always hated their irons, btw.

[GolfLug]

1 hour ago, newtogolf said:

Other vendors like Mizuno offered movable weights on a track in 2007 / 08.  Why TM was more successful is they took those concepts and combined it with a better marketing plan to build hype.  

Adidas has it's own issues, the two Dassler brothers (Adolf and Rudolph, founders of Adidas and Puma respectively) sought world domination of the sport shoe industry.  Initially they focused on field and track, then soccer and it expanded to all sports.  

I wouldn't be shocked if Adidas only acquired TM and poured money into it just to boost sales of their golf shoes and apparel.  Adidas now has a well established position in golf shoes and apparel so the need for a golf hard goods division that isn't maintaining the expected level of profit margins is no longer critical to the business and can be sold off.  

Not saying marketing didn't help cash in the windfall. Something Mizuno as your example missed out on. Just saying eventually the luster faded like it always does and other start getting wiser and caught up. I will say this, instead of Mizuno, if Callaway had the same concept, they would have been more popular.

I think your take on Adidas strategy as a shoe/apparel company using golf to get in and sustain themselves in general makes sense.  They just might not need it anymore.

I hope TM gets bought by a proper golf equipment interested group. TM still a very valuable brand name.  

32 minutes ago, Rainmaker said:

Interesting article - oddly, perhaps, I was a fan of TM drivers *until* RocketBallz.  I thought the R11 was fantastic looking.  I wanted one . .except I never buy new drivers.  That is probably, in large part, because of Taylormade . .why buy a new driver for big $$ when you can wait a little bit and get it way cheaper used? 

Then RocketBallz came out and TM lost me.  I hated the name, hated the commercials, etc.   

 I never did get an R11 - I still have and use my Burner.  It's pretty well time for me to get a new (used) driver.  In the past I barely considered other brands but this time it's highly likely my new driver will not be a TM. 

I've always hated their irons, btw.

I never let branding, commercials etc. turn me off..... or on for that matter. Don't judge till you hit a few. Proof is in the pudding and not the packaging. You can CHOOSE to not be confused. People lose out on good stuff because of pre-conceived notions. You just never know how gaudy or dull something might look or how silly their commercials are and might turn out to be the best thing that ever worked for you.

Agree on the 'wait till price drops' strategy. Never spent more than $150 on a driver.

[newtogolf]

13 minutes ago, GolfLug said:

Not saying marketing didn't help cash in the windfall. Something Mizuno as your example missed out on. Just saying eventually the luster faded like it always does and other start getting wiser and caught up. I will say this, instead of Mizuno, if Callaway had the same concept, they would have been more popular.

I think your take on Adidas strategy as a shoe/apparel company using golf to get in and sustain themselves in general makes sense.  They just might not need it anymore.

I hope TM gets bought by a proper golf equipment interested group. TM still a very valuable brand name.  

I never let branding, commercials etc. turn me off..... or on for that matter. Don't judge till you hit a few. Proof is in the pudding and not the packaging. You can CHOOSE to not be confused. People lose out on good stuff because of pre-conceived notions. You just never know how gaudy or dull something might look or how silly their commercials are and might turn out to be the best thing that ever worked for you.

Industry rumors claim TM will be acquired by a Chinese Investment Group but that could be impacted by an agreement TM just entered into with a Japanese firm (Fortress / Newcastle) to form a new business called "Drive Shack Holdings" to create Top Golf like facilities in Asia.