Case Study Description of Pearle Vision: Clearly Different?
Ohio-based optical retailer Pearle Vision, part of the vertically integrated Italian eyewear group Luxottica, sold glasses and offered in-store eye exams. Once the largest U.S. optical retailer, Pearle Vision, with 266 corporate stores and 356 franchised stores in 2012, was struggling to compete with and differentiate itself from industry leader LensCrafters, also owned by Luxottica. Increasing competition from low-price competitors, such as Wal-Mart's optical stores, were adding further competitive pressure. The case takes place in early 2013, with Pearle Vision's new CEO announcing his plans for revitalizing the chain. Will his strategy work?
Swot Analysis of "Pearle Vision: Clearly Different?" written by Rajiv Lal, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pearle Luxottica facing as an external strategic factors. Some of the topics covered in Pearle Vision: Clearly Different? case study are - Strategic Management Strategies, Health, Marketing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Pearle Vision: Clearly Different? casestudy better are - – increasing transportation and logistics costs, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Pearle Vision: Clearly Different?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pearle Vision: Clearly Different? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pearle Luxottica, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pearle Luxottica operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Pearle Vision: Clearly Different? can be done for the following purposes –
1. Strategic planning using facts provided in Pearle Vision: Clearly Different? case study
2. Improving business portfolio management of Pearle Luxottica
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pearle Luxottica
Strengths Pearle Vision: Clearly Different? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pearle Luxottica in Pearle Vision: Clearly Different? Harvard Business Review case study are -
Organizational Resilience of Pearle Luxottica
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pearle Luxottica does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Pearle Luxottica in the sector have low bargaining power. Pearle Vision: Clearly Different? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pearle Luxottica to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Pearle Luxottica is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Pearle Luxottica is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pearle Vision: Clearly Different? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Pearle Luxottica has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pearle Vision: Clearly Different? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Pearle Luxottica has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pearle Luxottica has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Pearle Luxottica is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Rajiv Lal, Natalie Kindred can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Pearle Luxottica has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pearle Luxottica to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Pearle Luxottica has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Pearle Vision: Clearly Different? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Pearle Vision: Clearly Different? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Pearle Luxottica is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Sales & Marketing field
– Pearle Luxottica is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Pearle Luxottica in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Pearle Luxottica has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Pearle Vision: Clearly Different? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pearle Vision: Clearly Different? are -
Low market penetration in new markets
– Outside its home market of Pearle Luxottica, firm in the HBR case study Pearle Vision: Clearly Different? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Pearle Vision: Clearly Different?, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Pearle Vision: Clearly Different? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Pearle Luxottica 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Pearle Vision: Clearly Different? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pearle Luxottica has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Pearle Vision: Clearly Different? HBR case study mentions - Pearle Luxottica takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Pearle Vision: Clearly Different?, it seems that the employees of Pearle Luxottica don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Pearle Luxottica products
– To increase the profitability and margins on the products, Pearle Luxottica needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Pearle Luxottica has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Pearle Vision: Clearly Different? should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Pearle Luxottica is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Pearle Luxottica needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pearle Luxottica to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pearle Vision: Clearly Different?, in the dynamic environment Pearle Luxottica has struggled to respond to the nimble upstart competition. Pearle Luxottica has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Pearle Luxottica supply chain. Even after few cautionary changes mentioned in the HBR case study - Pearle Vision: Clearly Different?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pearle Luxottica vulnerable to further global disruptions in South East Asia.
Opportunities Pearle Vision: Clearly Different? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Pearle Vision: Clearly Different? are -
Leveraging digital technologies
– Pearle Luxottica can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pearle Luxottica in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Pearle Luxottica can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Pearle Luxottica can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Pearle Luxottica has opened avenues for new revenue streams for the organization in the industry. This can help Pearle Luxottica to build a more holistic ecosystem as suggested in the Pearle Vision: Clearly Different? case study. Pearle Luxottica can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pearle Luxottica is facing challenges because of the dominance of functional experts in the organization. Pearle Vision: Clearly Different? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pearle Luxottica can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Pearle Luxottica can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Pearle Luxottica to increase its market reach. Pearle Luxottica will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Pearle Luxottica has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pearle Luxottica can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Pearle Luxottica can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pearle Vision: Clearly Different? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Pearle Luxottica can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Pearle Luxottica can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Threats Pearle Vision: Clearly Different? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pearle Vision: Clearly Different? are -
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pearle Luxottica can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pearle Luxottica can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Pearle Vision: Clearly Different? .
Stagnating economy with rate increase
– Pearle Luxottica can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Pearle Luxottica is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pearle Luxottica in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Pearle Luxottica will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Pearle Luxottica
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Pearle Luxottica.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Pearle Luxottica.
Consumer confidence and its impact on Pearle Luxottica demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Pearle Luxottica needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pearle Luxottica with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pearle Luxottica business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Pearle Vision: Clearly Different? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Pearle Vision: Clearly Different? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Pearle Vision: Clearly Different? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Pearle Vision: Clearly Different? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Pearle Vision: Clearly Different? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Pearle Luxottica needs to make to build a sustainable competitive advantage.
