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Competitive Forces Model

Bargaining Power of Suppliers: LOW

Risk of Entry: LOW

  • Backward Integrated
  • Global Manufacturing Plants
  • Raw Materials Procurement Policy

  • Consolidated Industry
  • Exclusive Licensing Agreements
  • Absolute Cost Advantage
  • 7,000 Retail Stores
  • Acquisitions - Oakley

"All contractual constraints involving forms of dependence on a supplier must be avoided where possible."

-Luxottica Website

Horizontal Integration

Rivalry Among Existing Competitors: LOW

Global Market Share:

Over 80%

5.5%

- Bought out Oakley from Sunglass Hut

Threat of Substitutes: Moderate

Bargaining Power of Buyers: LOW

  • Contact Lenses
  • Laser Eye Surgery
  • Forward Integrated
  • Over 80% of the Market Share

"The eyewear industry is dominated by a single company that has been able to keep prices artificially high while reaping huge profits from consumers who have no other options."

-Warby Parker Website

Macro environment

Vertical Integration

  • Global
  • Technological
  • Economic
  • Demographic
  • Social
  • Political/Legal

Organization Structure

Value Statement

“We at Luxottica aim at protecting the eyes and enhancing the faces of men and women all over the world, by manufacturing and selling ophthalmic eyewear and sunwear characterized by their high technical and stylistic quality, in order to maximize our customers' wellbeing and satisfaction.”

http://www.luxottica.com/en/company/about-us/company-profile/organizational-structure

Background

- Italian Eyewear Company

- Founded in 1961, by Leonardo Del Vecchio

Business Model

- Controls over 80% of the worlds major eyewear brands.

- Net Sales over €7.6 Billion, in 2014

Luxottica operates in a continually evolving and highly competitive global market

- Wholes Sale Distribution Network:

Countries -- 130

Continents -- 5

http://www.ft.com/cms/s/0/45e55d3e-329e-11e4-a5a2-00144feabdc0.html#slide1 --- Will remove before presentation

- Design

- Production

- Retail Distribution

- Wholesale Distribution

- Logistics

Internal Analysis

Topics Covered

I. Background Info

II. Current Strategy

III. Evaluation of Current Performance

IV. Industry Analysis

V. Internal Analysis

VI. Recommendations

Profitability

Competitive Advantage

Distinctive Competencies

LUX - Luxottica Group SpA

1) Vertical Integration

2) Acquisitions

3) Logistics

4) Exclusive Designer Contracts

Luxottica dominates the global eyewear market and out performs all of the competitors.

  • Absolute Cost Advantage
  • 80% Market Share
  • Control of Distribution Channel

Luxottica: Strategic Analysis

Threats/Weaknesses

Glassdoor.com

"Company is more focused on profits than employee satisfaction"

"general lack of respect"

"Poor pay without any room to grow"

  • Worker Discontent

  • Imitation of Designer Styles (knock-offs)

Recommendations

  • Transition to creating better work environments for your employees
  • In 2014 for the 100 best companies to work revenues for those companies rose by 22.2% they also hired 5 times more than the national average (forbes.com)
  • Having constant high prices for optical correction can result in your customers to flee to Lasik.
  • Look at lowering costs in order to help people get corrective eye wear.
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