GolfLogix

CASE BREIF 1 GOLFLOGIX Submitted By Prarabdh Saxena NJIT ID : 31368973 Q1 What should GolfLogix do? Should they go with the sell their services through the course only or through retail only? Explore the pros and cons of the both options. GolfLogix currently offers two solutions: The Distance Only System and the Complete System. They have two distribution options Course only and Retail. Below is a list of the pros and cons for each system. Course Only Pros Cons o With more and more courses o The complete system is adopting the system there quite expensive to maintain will be a higher brand value and low adoption rates of o Leasing the system the complete system will hurt the revenues generates huge revenues o With more courses picking up on the system the adoption rate will be higher

Retail Pros o Distance only system is a low cost system and it will likely be well adopted o Possibility of having lower equipment maintenance costs

Cons o The devices can not be used without mapping the courses and hence there is a requirement for additional effort to first map the course o It will be very difficult to increase the database of golf courses o They will face competition from the golf courses itself because for a golfer renting the system for a nominal

price is a better option o The USGA does not allow electronic mapping for handicap purposes and hence people will not want to own something which they can not use for professional golf. As we can clearly see that the pros and cons of the Course only approach outweigh the pros and cons of the Retail approach. What GolfLogix should do? They should stick to the course only approach and focus on improving their software and making optimum use of the Garmin hardware. Try to rope in more courses on the 30 day trial and expect them to lease the systems. This will build them a greater brand value and improve acceptance if they are to go retail in the future. In its incumbent stage they should not explore with the system because even they do not know where the system can go. What GolfLogix did? They did exactly that and stuck by the course only approach. Only in 2006 when the USGA lifted off the rule for electronically noted rounds for handicap calculation it was a major turning point for them and then they went retail and had a huge success with that. Q2 Compare and Contrast the complete system with the distance only system. Should GolfLogix offer the complete system?

GolfLogix initially came up with two solutions for the golf courses, The Distance Only System and The Complete System. The only similarity in the two systems was that they used GPS to track the distance to the center of the green. Distance Only System The distance only system is the easier of the two systems to understand and to install on the golf courses. The only piece of data required for this system was the GPS reading for the center of every hole. This data could easily be collected in 2 hours and it would take about two more hours to load the information onto the xCaddie units. The labor cost was estimated to be around $500. As far as playing with the distance only xCaddie system was concerned, it employed an easy to use scrolling feature and a golfer would simply scroll to the hole that he/she was playing, stood over the ball and get the distance to the center of the green. For a first time user, the pro shop employee would have to take a mere two minutes to explain the system to the golfer. The Complete System The Complete System was a much more complex system. In addition to knowing just the coordinates of the center of the holes, the system also needed to know the exact location of the tee boxes, hazards, bunkers, etc. Some 20 to 30 GPS location readings for every hole were required for this system to work. This took almost double the time it took for the Distance Only System and then another 8 hours were

required to produce a digital map of the entire golf course. The labor cost for the data acquisition of the Complete System was much more expensive and was estimated to be at around $2000. In addition to the labor costs, costs for the website, printing machine and the kiosk were also incurred. All in all the Complete System was a much more expensive system. On the playing front, the Complete Systems tells the golfers how far they are hitting the ball, how accurate they are with a particular club and how many putts they are taking on each hole. This device takes the pro shop employee a lot more time to explain to the first time golfer. In contrast to the Distance Only system, the golfer has to input the kind of club he/she is using before hitting every shot and then towards the end the number of putts taken to finish the hole. After the round is over t he golfer enters the data into the kiosk and gets a printout of the statistics of the round. This data is also made available on the GolfLogix website, where the golfer could also view all the data from the previous rounds. The Complete System is a useful tool for improving the game whereas, the Distance Only system is a tool to help amateur golfer in knowing the distance to the center of the green. While the complete system is far more costly than the distance only system, it is more attractive to the core and avid golfers because of what the complete system offers. It is a great tool to improve and

understand your game and hence GolfLogix should offer the complete system.

Q3 How is GolfLogix positioned today in the market? When GolfLogix started out there were a lot of “conventional” competitors of the Distance Only System like the yardage markers, sprinklers, yardage booklets and rangefinders and around 2005 there were other high tech options like the cart mounted systems and the PDA based systems. In contrast to the distance tracking, there were no competitors to the Complete System for performance tracking. There was no other way to track your score and the accuracy of shots with each club other than making handwritten ledgers, which was obviously a cumbersome process. It took GolfLogix a while to have a good year financially and when it did, it took the market by a storm. In an interview in 2013, Peter Charleston (President, GL) said “The goal was, in truth, an online golf community collaborating over their handicaps, efforts to improve, and the love of golf… a golf Facebook, five years before Facebook launched.” And that is exactly what GolfLogix did. They put GPS tracking in the palms of golfers before smartphones did. With the launch of BlackBerry in 2008 they were again very quick to realize the potential smartphones had. They started developing an app for the BlackBerry; They did suffer initially because people were reluctant to move to the smartphones. Luckily for them most of the

golfers usually come from higher sections of the society and most of the golfers used BlackBerrys. With smartphones they were not bound to the hardware from Garmin and they could explore with the app as much as they wanted. They were on the iTunes store when there were less than 30k apps. Smartphones was a huge pivot in the success of GolfLogix and they were right in jumping to the new platform immediately. Today, almost 15 years later GolfLogix is celebrated as the most popular sports application ever with over 3 million regular users and a database spanning over a multitude of nations across the globe. The vast database of golf courses is the reason why it is doing so well and people prefer using the app even though a lot of other cheaper alternatives are there. I think it would be very safe to say that GolfLogix is the current market leader in Golf apps.

Q4 Is their current business model sustainable? Evaluate the possible growth areas and threats that the company faces today. Back in early 2000 GolfLogix stuck to a course only approach and even though they did not have any competition, the success of their product entirely depended on how well the course adopted their system and passed it on to the other golfers. While the surveys said that golfers were willing to use both the systems with fairly high acceptance rates.

The major drawback of the complete system was that it was quite a time consuming system with the golfer having to select the club prior to hitting every shot and the clubs accepting the system entirely depended on the golfers adapting to the system. So that was a major potential threat to their business model. The growth areas for them back then would be to increase their database and to make the system more customer friendly. Currently, GolfLogix sells the Garmin hardware based systems as well as the app for smartphone usage. Since it is clearly the market leader there are no real threats to the company other than complacency. The growth areas in the smartphone app would be to make improvised smartwatch apps and maybe include a system which does 3D mapping of the course and instead of just having a 2D aerial image, have an interactive golfcourse on their smartphone app.