Luxottica

Case study

Luxottica

– Italian company with headquarters in Milan– Largest manufacturer and wholesaler of

optical products in the world– Own brands such as Ray-Ban, Person and

Vogue, and licenses other brands including Bvlgari, Chanel, Versace and Prada

Current capabilities

• Owns 26 brands• Huge (under 6000 stores globally –

about 4000 optical stores and nearly 2000 Sunglass Hut stores – and growing (from 150 to 220 stores in Australia in three years))– 2006 net sales were $AUD7.8 billion)

Opportunities

• Opportunity for vertical integration as manufacturer, wholesaler and retailer

• Move into the eyewear business in the mid ’90s, buying Lenscrafters in the US

• Acquired American company Sunglass Hut around 2000

• Purchased Australian company OPSM a few years back

Opportunities

• Huge growth in luxury good globally

Challenges

• Segmentation– Fragmented market in Australia

• Sunglasses sold at service stations, chemists and department stores – on the streets too

– Seasonal industry – Integration

Goals

• Enter one country a year• Categorised emerging markets into

three tiers: ready now; watching; and not quite ready

• Idea based on local level of sophistication

Strategy

• Expand the Sunglass Hut business as quickly as they can– Currently have six stores in Hong Kong,

220 in Australia and New Zealand– By December, 10 stores in Singapore– Looking at other countries

Positioning

• Fashion and luxury segment

Sample ads

Unique value propositions

• Smarter value propositions• Better store environments• Better guarantees and better service

– Open sales

Target market

• Targets people with higher disposable income

• Middle/upper end of the fashion sector• Fashionable females, aged between 25

and 35

Consumer behaviour

• People are buying emotions• Europeans have fashion running

through their veins (Everyone wants fashion)

• Australian, Hong Kong and Singaporean consumers are very sophisticated in their knowledge of brands

Consumer behaviour

• Asians don’t wear sunglasses as much as other Western markets

• For example, in Thailand, culturally, girls don’t like to cover their eyes, because it looks like they are being too confident or forward

Consumer behaviour

• Young Chinese wear sunglasses exclusively on their heads

ROI

• Met targets in the second year and exceeded in the third