Golflogix Case Study

Since a game usually consists of 4 players, only one of them would deed the device, regular players may share the cost. Although the distance-only system Is easy to get up and running, when sold directly to the golfers, the golfers would themselves need to outfit their green on the golf course. This would take away from the key value proposition to the golf courses that is ‘pace of play. Golf courses may need to charge an initial amount to the new customers (golfers) to take into account time spent in setting up the distance-only system.

Also with the technical setup requirements of the Complete-system, it would be almost impossible for a golfer to do It himself. Also, with the golf-course channel, It will be easier to lock-Len the golfers. The real benefit of the “Complete System” would be realizable to the end- user (golfers) when they see improvements in their game with their regular use of the system. Thus, locking the golf courses in who will push to throw in the system to the golfers per round would make its value proposition realizable.

Sales to golf courses involve a three year lease, thus a guaranteed three year revenue stream and also the equipment can be reused elsewhere. If Googol goes with both channels, one may end up cannibalizing the other.

If devices are sold directly to golfers, golf-courses may not see any value in buying them, since their revenue in turn on the rent of the devices would not be guaranteed. Similarly, golfers would not buy the system if they knew golf-courses already provided it with a nominal fee. It Is also noted that 80% of golfers played on public courses, which required a dally green fee.

This was promising for the public golf courses channel, since with a per round fees, golf courses would make up for the cost of the golf logic systems much faster. Within the golf-courses, it would be beneficial to begin with the public rouses.

Surveys performed by the Googol team, had compelling results. 80% of the golfers reported that they would regularly use the system If It were available on the courses teen played 3 per round. Appendix A is an income statement (with certain assumptions) that at the end lists the operating income per revenue stream.

We see that with the retail channel, we lose one revenue stream. Up-selling to a Complete-system becomes easier with golf- courses. And although even the sum of the revenues through golf-courses is lesser than the revenue for Distance-only for golfers, two key points need to be kept in mind: 1) The equipment with the golf-courses channel is reusable, and thus costs incurred in the next three years will be lesser, and 2) # of units sold to golfers may reduce by 4, since the game is played in groups