(FORTUNE Magazine) – Filling Ely Callaway's golf shoes was never going to be easy. As FORTUNE reported in July (see "One Town, Two Rivals" on fortune.com), the founder of the famed golf-equipment business that bears his name was as dynamic as they come--a gifted salesman, a visionary entrepreneur, and a hardscrabble competitor. But he was also stubborn about giving up control. The octogenarian, who is credited with making golf easier for millions of hackers, didn't name a replacement until a few months before his death in 2001--and his choice was an executive who seemed his exact opposite. That decision has come back to haunt Callaway's shareholders.

With the stock more than 70% below its all-time high and the outlook for sales bleak, in early August the company announced the resignation of CEO Ron Drapeau. Interim CEO William Baker hasn't said anything publicly about who will ultimately run the company or which other executives might be pushed out. Speculation is that current president Patrice Hutin, a dynamic Frenchman who once ran rival clubmaker TaylorMade, could get the nod. Whoever gets the top job, however, will face the greatest challenge in Callaway's history. The company has suffered through a series of poorly received products that have failed to replicate the success of the touted Big Bertha driver. At the same time aggressive competition from TaylorMade, a unit of Adidas-Salomon, as well as other deep-pocketed powerhouses such as Fortune Brands (parent of Titleist) and Nike has cut into market share. That has led to talk that Callaway, with an $800 million market cap and nearly $1 billion in sales, will have to merge with a larger company.

In a FORTUNE interview shortly before his departure, Drapeau complained that TaylorMade had launched a price war to steal market share. "We've had enough. We're not going to sit here and take it anymore," he said. Apparently Callaway's board felt the same way. --David Rynecki