Beta Golf the Beta Group Essay

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The start-up is a disaster for a boutique firm which has an "investment process that develops ideas and concepts" (Katz, L. et al., 2005). Beta would play a huge role in the marketing, distribution, and branding of this new firm, and even with "the recruitment of a management team with significant experience in the golf industry" (Katz, L. et al., 2005) the risk of misdirection and misallocation of capital are too great. Additionally, the competition in the industry would prove troublesome to advance a fledgling company, despite the models of Callaway and Odyssey. The acquisition also has a similar problem, notably that Beta would be entering the industry as a competitor to existing club companies, and would have responsibility to "try to revitalize the brand by introducing a new product line which incorporated Beta's HXL technology" (Katz, L. et al., 2005).
This option presents too much financial commitment, some 60 million dollars over three years to "revitalize a former leading golf brand"

Of the remaining options: licensing or the original equipment manufacturer model (OEM). The OEM model constitutes another foray into manufacturing which Beta has done, but is not necessarily their best of use of capital or resources, however, this option at least does not require Beta to run a golf business. The license model would be ideal because it presents the least financial risk with the greatest benefit "a six to ten percent royalty" (Katz, L. et al., 2005) depending on exclusivity. The license model also plays to Beta's strengths: ideas and research and development, and presents little actual exposure of the firm's balance sheet or cash flow to the golf industry.

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https://www.aceyourpaper.com/essays/beta-golf-beta-group-47326