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Challenges and Solutions

The following excerpts from the December 2012 Financial Statement (published February 14, 2013) document decisions taken by Dunlop Sports Co. Ltd.

Our group is working to accelerate our drive for global business expansion, becoming a corporation whose presence is felt in golf product markets around the world. Particularly in the US, the world’s largest market, we are solidifying our operating base by strengthening the management structure of Cleveland Golf, which coordinates our US marketing efforts, while working to increase our share of the US golf club and golf ball markets. To achieve these objectives, we are striving to recapture a stable top share for our strong-selling Cleveland brand wedges, in addition to expanding sales of Srixon brand golf balls. Also, in the rapidly expanding Asian market, we are working to increase brand recognition and expand golf club sales, with a focus on the same XXIO brand as in Japan.

Golf clubs and golf balls, our flagship products, require advanced technological expertise. Dunlop Sports employs designs created using our own proprietary Digital Impact computer simulation technology based on analyses and evaluations carried out using high-precision data measurements taken at our Golf Science Centers in Japan and China. This allows us to develop golf clubs and golf balls with the superior flight distance performance our customers demand.

Furthermore, in addition to our own independent research, we also engage in collaborative research with public research institutions such as universities and materials manufacturers to further strengthen our product development capabilities.

Our group is pressing forward with marketing activities designed to promote the brand values of our Dunlop, XXIO, Srixon, and Cleveland Golf lines, in accordance with the distinctive characteristics of the regions in which they are sold. We are also working to promote increased brand recognition and reputation by entering into user agreements with well-known skilled, prominent players.

In addition to leveraging these brand assets, we continue to promote increased corporate recognition and enhanced corporate value.

Our group places the highest priority on building a close relationship with players through our products.

Efforts to accomplish this in our golf operations include installation at retail outlets of equipment capable of on-site measurement and analysis of product behavior at moment of impact as well as services offered by specialized ‘Club Doctors’ to advise golfers on appropriate club selection. In our tennis operations, we are increasing opportunities for contact with players to facilitate a stronger relationship through activities such as the rollout of the Dunlop Swing Lab, which uses scientific swing analysis to advise players on optimum racquet selection.

In addition to our own independent market activation efforts, we also participate in planning for the Golf Market Activity Committee (GMAC) and the Committee of Activating Tennis (COAT), in an effort to expand the circle of players who enjoy golf and tennis.

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