Luxottica Group S.P.a - Cstr Course Project

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Luxottica Group S.p.A
Competitive Strategy course project
Term 2

7/16/2010

Group C 15

Jince Joy 61110096
Manas Lodhavia61110407
Piyush Nahar61110236
Saurav Atri61110185
Vikas Garikipati61110187

Contents

1. Executive Summary………………………………………….........3 2. Introduction…………………………………………....................4 3. Strategic Issues analyzed…………………………………………..8 a. Luxottica’s position in the US market……………………….8 b. Gain of market share in the US and international markets…8 c. Strategies in the current economic scenario………………...15 4. List of Exhibits……………………………………………………20 5. Bibliography………………………………………………..........21

1. Executive Summary
The eyewear industry is both a medical device industry meant to cure vision, and a high fashion industry revolving around design and fashion trends. Spectacles as we know them were invented in the early 1300s. Since then, functional tools have become much more ornate and design oriented, employing cutting edge manufacturing techniques.

Luxottica has been at the forefront of the high fashion eyewear revolution. In more than 130 countries, Luxottica is the largest eyewear manufacturer, with presence in wholesale as well as retail. In this report we analyze the company’s evolution into a leading player in the eyewear market even as others struggled. We shall try to understand how the competitive landscape is changing and how the company is coping with it. We also look at how the company has endured the economic recession and how is it positioned to take on the emerging markets such as India and China.

2. Introduction:
The Optical & Ophthalmic Industry in North America is a highly competitive industry, with a total estimated value of $26b. It is broken down into three key segments: 1) Medical treatment: These are doctors who perform general eye testing, glaucoma/cataract and even Lasik surgery. 2) Optical services: These are the retail store fronts that provide you with contact lenses and prescription eyewear. They are the point of contact for all end users. The stores are categorized as: A) Opticians: They are not allowed to issue prescriptions, but may accept or partner with optometrists. Their primary source of revenue is in lens cutting and fitting service. B) Optometrists: Licensed to give vision prescriptions. Currently, all optometrists partner with a vision insurance provider such as VSP (Vision Service Plan), as most patients have vision insurance through their employer. Looking to function more as a business operation than a medical clinic, doctors offer prescription filling (finished eyewear) by outsourcing labor to a lens cutting and fitting lab. C) Ophthalmologists: They may offer eyewear, but primary source of revenue is in Lasik, glaucoma, cataract and other specialized vision defect treatment. D) Retail chains: Stores like Wal-Mart, Costco, and Lenscrafters. 3) Eyewear/Optical supply: Suppliers are eyewear, contact lens and optical lens manufacturers. Eyewear as an industry is very unique because it caters to a very large proportion of the population by supplying an essential accessory, but at the same time it needs to constantly re-invent itself in the wake of the ever changing fashion preferences of its customers. 2.1 Luxottica Group S.p.A.

Luxottica is a leading manufacturer and retailer of eyewear with a leading market share in the luxury eyewear segment along with a significant presence in the prescription eyewear segment. Luxottica Group S.p.A, founded by Leonardo Del Vecchio in 1961, started out as a small workshop which supplied dies, metal components and other semi-finished goods for the optical industry. Mr. Vecchio soon realized the importance of transitioning the company into an independent producer, and the company announced its arrival at Milan’s MIDO (an international optics trade fair) in 1971, showcasing its eyewear. EXPANSION IN WHOLESALE

As an independent producer,...
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