Chapter 2: Strategic Planning for Competitive Advantage

Chapter 2:

Luxottica's SWOT Analysis.

Strengths – The strength of Luxottica at a business standpoint lies within the companies ownership of other eye wear brands and production and distribution of other luxury brands in the eye wear industry. Luxottica owns approximately 80% of the high end eye wear market yet few people know of the Luxottica group. Owning 80% of your business market share would be a strength to any company/business. Luxottica designs, produces, and distributes eye wear for many prestigious brands including but not limited to: DKNY, Bvlgari, Chanel, Polo Ralph Lauren, Versace, and Coach to name a few. They own some of the best selling eye wear brands including Ray Ban and Oakley. To own most of the share in the eye wear industry is a strength, however, it can also be seen as a weakness as consumers may question the exclusivity of certain luxurious eye wear and/or low end brands if they understood all products were designed and produced under the same company. That leaves us with Luxottica's weakness.

Weakness – Lets say you walk into LensCrafters (which, by the way, is owned by Luxottica) and you pick up a pair of Chanel eyeglasses and a pair of Mosley Tribes eyeglasses. The consumer (you) would look at many features of the product including the price, style, design, material etc. Most of the time, consumers tend to be more intrigued by the brand name. So even though the Chanel pair costs $404.99 and the Mosley Tribe pair is $135.99 most consumers will choose the Chanel pair because of what the Chanel brand has to “offer”. And I support this example as even I, a consumer, have before chosen a certain product specifically because the brand “means more to me”. But lets say that you went into LensCrafters and chose those same pair of glasses but before hand knew that they were designed and produced as well as distributed by the same company, how much will the 'Chanel' logo really influence your purchase knowing the quality were virtually the same? Would the name 'Chanel' logo justify the adjusted $269 price tag? If more consumers knew of this and knew that most of the eye wear products were made under the Luxottica powerhouse it will certainly affect product sales especially for the more expensive products.

Opportunities – In addition to designing and producing eye wear items for themselves and other brand name companies, Luxottica also owns the major eye wear retail stores in the world. Luxottica owns LensCrafters, Pearle Vision, and recently purchased, the worlds leader in the sunglass retail business, Sunglass Hut. With many of the big name retail shops under the Luxottica umbrella the opportunity is virtually endless. Since they own most of the businesses in the eye wear industry they can virtually dictate the prices on the various products they offer and be successful with its decision as they are the powerhouse in their market.

Threat – Being that Luxottica is the fore front runner and biggest player in the eye wear industry any company in their market holds a, most likely minimal, threat to Luxottica. Another threat Luxottica faces lies within consumers, and how they may feel deceived by the 'brand competition' if most brands' eye wear are being constructed under one house.