Elvis Golf Ltd.

Elvis Golf Ltd. (EGL) manufactures the King 460cc driver, a $79 copycat of a far more
expensive golf club from a well-known brand. The King is manufactured at the
company’s small Memphis, Tennessee, factory and is shipped to major sporting goods
retailers. EGL uses a mass production strategy to gain economies of scale and high labor
productivity. This strategy is coupled with a MTS assembly process, and goods are
produced in anticipation of demand.
The company has experienced a sales slump over the last three quarters. In response,
EGL sent their sales team to the World Golf Expo, a major trade show. The goal of this
trip to the Expo was to boost awareness of the King, gain retailer feedback, and generate
orders. The sales team set up a display booth and had plenty of literature to distribute.
The trip wasn’t successful from an order standpoint, but the sales team gained valuable
insights from the Expo attendees. At a post-trip meeting, the following information was
shared with EGL executive management:
• Retailers liked the novelty and price of our product but having only one model
available—a right-handed, 43-inch, 10-degree loft, steel shaft driver with a tacky
grip—limits the market appeal.
• Competitors at the event were offering semi-customizable clubs similar to the
King at a $119 price point. Options included left-handed clubs, a choice of three
different grips, steel or graphite shaft, and six shaft length/flex combinations.
• A few retailers commented that sales would explode if EGL offered an optional
package deal—the King, a blue suede head cover, and a golf hat with “Elvis”
written on it.
Tom Parker, the company CEO, was intrigued by the customization angle. He liked the
higher price and believed that the input component costs wouldn’t be much higher than
the current model of the King. “Let’s get started right away,” he said.
“But that will add great complexity to our supply chain and production operations,”
replied Pat Boone, vice president of manufacturing. He noted that the company would
now have to manufacture 72 different models based on all the possible configurations of
club heads, shaft types, shaft length/flex options, and grips. “Creating a forecast will be a
nightmare and we’ll have to hold finished goods inventory of every model,” he added.
“And don’t get me started on that package deal mess either. Blue suede head covers, how
tacky is that?”
“Well, Mr. Boone, you’d better figure it out,” replied Parker. He went on to talk about
the need for EGL to adopt a more modern and agile manufacturing strategy. “We need to
respond to our customers, and offering semi-customized clubs sounds like a good idea to
me,” he added. “If that is too much to ask, then I may need to think about outsourcing our
manufacturing and your job!”
CASE QUESTIONS
1. In terms of production strategy, should Boone stick with mass production or try
something else? Explain.
2. Is the make-to-stock assembly process well-suited to Parker’s desire to make semi-
customized clubs? What other assembly options could be considered?
3. What do you think of Parker’s idea to outsource the manufacturing of the King