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Business Model Evolution
March 21, 2007
Scott Olivet, Chief Executive Officer
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Agenda
§ Company Overview
§ The Changing World
§ Oakley Evolution
3
Company Overview
§ Founded in 1975
§ 2006 revenue: $762 million
§ Segment sales
– Optics 73% | AFA 21% | Other 6%
– Wholesale 77% | U.S. Retail 23%
– U.S. 56% | International 44%
§ Distribution
– 110+ countries through 20,000+ accounts
– 225+ company-owned retail locations
§ 3,400+ worldwide employees
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Phase IVPhase IIIOwned Retail
Oakley Stores
Sunglass Icon
Phase IIProduct
Diversification
Rx
Apparel
Footwear
Accessories
Phase I
Mad Science is Born
Hand Grips
Goggles
Sunglasses
Company Growth Phases
1975 2007+1997 2006
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The Changing World
1. Companies usually try to move beyond their core too quickly
2. True brand authenticity is hard to come by… and gettingharder to create
3. Consumer’s relationship to brands has changed forever
4. The consumer defines you (the brand and the company) by thelast touch point
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Oakley Evolution
The Changing World
1. Growing too fastbeyond the core
Oakley’s Evolution
§ Optics, optics, optics§ Fully utilize our strengths
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Before
Focus on the Core
SunglassesSunglassesGogglesGoggles
New New BusinessesBusinesses
• Rx• Apparel• Footwear• Accessories• Watches• Electronics
Now
OpticsOpticsApparelApparel
FootwearFootwearAccessoriesAccessories
• Sunglasses• Goggles• Rx• Electronically enabled eyewear
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Optics Growth Opportunities
Gender Product Use Style Influence
Multiple BrandsChannelGeography
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Utilize Our Strengths
575+ patents Oakley Hydrophobic Lens
Research & Design
Manufacturing Limited Editions
RadarTM
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Oakley Evolution
The Changing World
1. Growing too fastbeyond the core
Oakley’s Evolution
§ Optics, optics, optics§ Fully utilize our strengths
§ Everything connected to heritageand authenticity
§ Be unapologetic for who we are§ Multi-brand
2. Brand authenticityharder to create
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Brand Authenticity and Integrity
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Oakley: Authentic Across Sports Categories
Golf Skate Motocross
SnowSurf Motorsports
MTB Football Multi-sport
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Oakley: Iconic Product
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Oakley: Be Who We Are
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Market Positioning
PerformanceActive
LifestyleSport Inspired
Fashion Fashion$450
375
300225150
750
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Market Positioning
PerformanceActive
LifestyleSport Inspired
Fashion Fashion$450
375
300225150
750
BLOC
Brand: Above the Clutter
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Oakley Evolution
The Changing World
1. Growing too fastbeyond the core
Oakley’s Evolution
§ Optics, optics, optics§ Fully utilize our strengths
§ Everything connected to heritageand authenticity
§ Be unapologetic for who we are§ Multi-brand
2. Brand authenticityharder to create
§ Bring back emotional connection§ Allow fast but go deep§ Connect consumers to the culture,
not just the product
3. Consumer relationshipto brands continues tochange
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Flak JacketTMThump ProTM RadarTM
Sport Performance
Oakley Hydrophobic Lens
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Oakley Women’s Collection
SpeechlessTM
DisobeyTM
BehaveTM
DartTM
ScriptTM
GrapevineTM
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Multiple Campaigns – One Brand
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The Oakley Brand – Integrate
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The Oakley Brand – Communicate
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The Oakley Brand – Educate
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The Oakley Brand – Participate
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Oakley Evolution
The Changing World
1. Growing too fastbeyond the core
Oakley’s Evolution
§ Optics, optics, optics§ Fully utilize our strengths
§ Everything connected to heritageand authenticity
§ Be unapologetic for who we are§ Multi-brand
2. Brand authenticityharder to create
§ Bring back emotional connection§ Allow fast but go deep§ Connect consumers to the culture,
not just the product
3. Consumer relationshipto brands continues tochange
§ Improve service§ Tell our product and brand story
at retail
4. You are defined by thelast touch point
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Customer Service
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Retail – Oakley Stores
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Retail – Multiple Platforms
OpticalShop ofAspen
121 locations 20 locations 130 locations**Definitive agreement signed in January 2007
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Conclusion
Product
Consumer Experience
Brand
“For me to bepart of you,
you need to bepart of me.
And don’t findme, I’ll find
you.”
“I want it custom,now, free.”
“I want it when I want it, how I want it.”
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