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The Luxottica Group, Case Study Example

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Case Study

Company history

Being the largest eyewear company in the world, Luxottica remains to be the creator and supplier of the most known eyewear brands that are not only recognized for their name but also for their quality. The market of Luxottica instills an effect on the two top-brackets of the economy, the elites and the ‘haves’. Creating delectable designs for Chanel and Prada this company spears head several other branded designs that are making a name in the industry.

Other branches of the company include providing vision support programs that further improves the manner by which they get involved in the industry for the sake of creating different possibilities for developing eye-care options for the market that they are serving. Through the years, Luxottica has been working for other known brands, and so far, being the primary supplier of these brands, the organization is able to maintain a reputable stance when it comes to defining the path by which they tend to be identified along with their capability to provide what their clients need and demand for.

Starting from 1961, the organization was established by Leonardo Del Vecchio in Italy. As Vecchio moved to Agordo in Belluno, he started Luxottica as a limited partnership business with Del Vecchio. At first, the business organizers only decided to create eyewears and have the said products distributed by other organizations in the market. However, at the turn of time, the organizers realized the higher returns of the possibility of having an allied company that would directly distribute their products. For this reason, they have acquired an alliance through vertical integration with Scarrone in 1971. From here on, the company started to grow towards the international market releasing products to both Germany and some parts of the US. Up to this point, the company operates under two particular function, one is that on manufacturing and another is on wholesale.

Vision and mission statement

The past and future success of the organization is strongly related to building customer and client trust. Being the manufacturers and distributors at the same time, there are two particular clients that the business serves; one is that of the distributing client and another is that of the direct-buying client. The distributing clients stand to be the businesses that are allied with the organization to stand as their release points in the market. These distributors serve as the middle-bridge between Luxottica and the direct buyers of the product that they offer in the market. On the other end, as direct connecting agents to the buying clients, it is important for the company to know how to carry their own brand separate from the other brands that they supply in the market. Setting an identity that would be known as Luxottica’s trademark alone is a hard condition to confer with especially if they are providing specific designs with high quality definition to other well-known brands. To go up against the same brands with the original form of quality that they provide would be both a challenge and a process by which competition itself is being set up.

To be able to come up with a specifically functioning system for the business, Luxottica follows a certain patter of operation. From the creation of design, the operation levels forward to the manufacturing of the actual product. From this point, the establishment of the prototypes for testing is handled. The approval of the products that passed testing would undergo logistics for shipping towards the distribution sections. These stores are the ones to present the integral part of sales to the clients in the market hence are likely carrying the name of the organization as the front players in the game as they are the ones to reach out to the buying end of the operation. Undergoing this particular pattern of operation has aided the business organizers to formulate a chain of command that would later on create an impact on how the end-users [the customers] would be satisfied on the product that they receive from the company.

Strategic elements of the history

Based from how the organization was able to survive different challenges in line with the function of the industry that they have chosen to join, it was evident how strategic planning based from effective business forecasting worked well for the entire business entity. For instance, the starting point of the business was rather plain and simple. The desire was to create eyewears and have the said items be sold by several different outlets in the market. This possibly lifted the challenges of putting up a known brand for their own.

Later on though, the expansion of the business needed more than just the manufacturing approach to gain the desired profit. A larger market of consumers has attracted the company’s operators hence pushing them to engage in actual connection with the end buyers. This raised a challenge of putting up their own name and own brand. Notably, this means that they would have to embrace a new culture of operation, which they did. Being able to establish an alliance with a direct distributor increased the chance by which they are to gain profit from every single product that they release in the market. True, from this point, it could be realized how business expansion does create a wide array of opportunities for business organizations as they consider the aspect of gaining more through extending their services further.

Assessment of mission and vision

The mission and vision of the company are both solid. Dedicated to serving the needs of the public and responding to their demands for design, convenience and quality, the organization continues to research upon the possible needs of the market. Hearing out from the feedbacks of their clients directly allows them to take note on what needs to be adjusted and what needs to be added into the products that they have already made that are ready for consumer appreciation. Along with this mission is the envisioning of the company’s desire of being able to serve clients in an international basis. These vision and mission are both effective especially in driving a culture that would define the condition of work that the business’ staffs should be subjected to hence making a distinctive condition by which they enjoin in the process of making changes and establishing good source of quality development in their own products.

Analysis of competitive position, opportunities and threats

While the eyewear industry continues to thrive, the need to innovate and offer more to the clients they serve is a constant need to respond to. What makes Luxottica a strong competitor in the field is the fact that the company’s administrators never run out of ideas on how a simple design of an eyewear becomes a phenomenon that the market would not only love, but would also appreciate fully because the product’s functionality. Reputation is an important aspect of existence for the company and up to now, the administrators are trying the best they could to handle the need of understanding the market needs and refining their procedures of operation to respond to such conditions of the market.

References

“Luxottica to Buy a U.S. Sunglasses Maker”. in The New York Times June 21, 2007. 2007-06-21.

Brett Arends, “Are Designer Sunglasses Worth the Price?”, Wall Street Journal, July 22, 2010.

“Luxottica Past and Present”. Luxottica Group S.p.A. http://www.luxottica.com/en/company/history. (Retrieved on November 9, 2012).

“Sticker shock: Why are glasses so expensive?”  60 Minutes (CBS News). October 7, 2012. http://www.cbsnews.com/8301-18560_162-57527151/sticker-shock-why-are-glasses-so-expensive/. (Retrieved on November 9, 2012).

 

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