Ch. 5 - Developing a Global Vision

Luxottica was founded in 1961 in Italy by Leonardo Del Vecchio. He started out as a tool and die maker in Milan and later changed his work to producing eye glasses. The company was very successful through its first years and Del Vecchio felt expansion was in the companies best interest. He was convinced that the company was in need of vertical integration (when a company expands its business into an area that are at different points on the same production path) to prevent the 'hold-up problem'. In 1974 he acquired Scarrone, a distribution company, which ultimately led the company to its first international expansion located in Germany. In the 80's Luxottica's acquisition of other distributors and the opening of branches and joint-ventures in other foreign markets allowed for Luxottica to operate in many foreign countries.

 Luxottica started a commercial partnership in Germany in 1981 which led to the acquisition of Avant Garde Optics Inc. Avant Garde Optics Inc., was a distributor with strong ties and a major distributor on the the United States market.

This move introduced Luxottica to the eye wear market in the US. In 1990 Luxottica listed in New York which allowed the company to raise money to acquire brands for expansion such as LensCrafters (1995), RayBan (1999), Sunglass Hut (2001), OPSM (2003) and many others. Luxottica's first partnership with a high fashion company came in 1988 through a license agreement with Giorgio Armani. Since then Luxottica has made major license agreements with top brands including Versace, Prada, Chanel, and Dolce & Gabana. 

Today Luxottica Group is a multinational company which operates in 130 countries across five continents with approximately 72,000 employees world wide. They have 20 distribution centers around the world and have their products designed and manufactured at six plants in Italy, two in China, one in Brazil, and one in the US, which is devoted to the production and manufacturing of sports eye wear. Luxottica's global vision and vigorous marketing and business executions make it the successful company it is today. Operating in these many markets around the world is the primary reason why they are the industry leaders in the eye wear business.