Case Study Of Oakley

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Case Study Of Oakley

  1. 1. Case study of Oakley, Inc. Prepared by Donatas Sumyla 12/14/2004
  2. 2. Company Overview <ul><li>Why Oakley? </li></ul><ul><li>Principal activities are to design, manufacture and distribute consumer products; </li></ul><ul><li>Products include performance and prescription eyewear, athletic equipment, apparel, footwear and watches; </li></ul><ul><li>Sold through various locations; </li></ul><ul><li>International; </li></ul><ul><li>Has 550 patents and 875 trademarks; </li></ul>
  3. 3. Company Overview (cont.) <ul><li>Revenue in 2003 - $521.5 million; </li></ul><ul><li>Net income after taxes - $38 million; </li></ul><ul><li>Revenues increasing every year; </li></ul><ul><li>Major competitors: </li></ul><ul><ul><li>Nike; </li></ul></ul><ul><ul><li>Reebok; </li></ul></ul><ul><ul><li>Luxottica; </li></ul></ul><ul><li>In 2003 employed 2,456 people; </li></ul>
  4. 4. E-Business Marketing Goal and Strategy <ul><li>New Product Development and Distribution Channel Processes : </li></ul><ul><ul><li>Idea generation; </li></ul></ul><ul><ul><li>Idea screening; </li></ul></ul><ul><li>Differentiation through: </li></ul><ul><ul><li>Category diversification strategy; </li></ul></ul><ul><ul><li>Distribution diversification strategy; </li></ul></ul>
  5. 5. E-Business Marketing Goal and Strategy <ul><li>Products: </li></ul><ul><ul><li>Great accuracy; </li></ul></ul><ul><ul><li>Latest technologies; </li></ul></ul><ul><ul><li>Latest scientific capabilities; </li></ul></ul><ul><li>Careful selection of the retailers for their ability to add value; </li></ul><ul><li>Staff education; </li></ul><ul><li>Focus on introducing new categories and products; </li></ul>
  6. 6. New Product Introduction (NPD) <ul><li>Oakley Thump ™ - world’s first performance eyewear combining patented optics with an internally integrated MP3 music player; </li></ul><ul><li>Launched on November 20 th , 2004; </li></ul><ul><li>Product launches in international markets too; </li></ul><ul><li>Expected success; </li></ul>
  7. 7. Oakley Apparel <ul><li>Fastest growing and largest newer category contributor for past two years; </li></ul><ul><li>Approximately 65% of sales generated from international markets; </li></ul><ul><li>Accessories represent the largest segment of this category; </li></ul><ul><li>Strong focus on sporting goods; </li></ul><ul><li>Women’s apparel represents close to 20% of the category; </li></ul>
  8. 8. Oakley Prescription Eyewear <ul><li>Focus on ophthalmic frame and prescription lens categories; </li></ul><ul><li>Launched 7 exclusive ophthalmic frame styles and 3 additional exclusive frame styles in 2003; </li></ul><ul><li>In-house lens processing labs’ goals: </li></ul><ul><ul><li>increase capacity to meet demand; </li></ul></ul><ul><ul><li>provide tighter quality control; </li></ul></ul><ul><ul><li>provide simplified ordering; </li></ul></ul><ul><ul><li>Increase margins; </li></ul></ul><ul><li>Increase prescription penetration; </li></ul>
  9. 9. Iacon – Sunglass Specialty Stores <ul><li>A sunglass retailing chain located in Scottsdale, Arizona; </li></ul><ul><li>Operated 80 mall-based stores/kiosks; </li></ul><ul><li>Sunglass Club – a new Iacon concept targeted towards outlet malls; </li></ul><ul><li>Oakley products increased from 28% of Iacon sales for 2001 to 32% for 2004; </li></ul><ul><li>Opportunity to expand retail operations and receive experienced retail management team; </li></ul>
  10. 10. Financial Overview
  11. 11. Financial Overview
  12. 12. Financial Overview
  13. 13. Financial Overview <ul><li>Key Growth Drivers : </li></ul><ul><ul><li>Development of electronics; </li></ul></ul><ul><ul><li>Proprietary advancements in eyewear technology and new styling; </li></ul></ul><ul><ul><li>Enhanced product assortment combined with an expanded distribution network; </li></ul></ul><ul><ul><li>Company-owned retail store expansion; </li></ul></ul><ul><ul><li>Strategic marketing initiatives; </li></ul></ul>
  14. 14. Primary Stakeholders <ul><li>Customers </li></ul><ul><li>Investors </li></ul>
  15. 15. Value Bubble <ul><li>Attracting phase; </li></ul><ul><li>Engaging phase; </li></ul><ul><li>Retaining phase; </li></ul><ul><li>Learning phase; </li></ul><ul><li>* Mostly refers to Oakley’s website; </li></ul>
  16. 16. Attracting <ul><li>Has website to let people know about the company; </li></ul><ul><li>Well known brand; </li></ul><ul><ul><li>Good positioning and branding; </li></ul></ul><ul><ul><li>Focus on younger crowd interested in winter and extreme sports; </li></ul></ul><ul><li>Content on the website; </li></ul><ul><ul><li>For customers; </li></ul></ul><ul><ul><li>For investors; </li></ul></ul>
  17. 17. Engaging <ul><li>To keep a visitor on the website; </li></ul><ul><li>Precise info about the product; </li></ul><ul><li>Toll-free number available for not technology savvy people; </li></ul><ul><li>Quick description of Oakley’s O Store®; </li></ul><ul><li>Easy navigation; </li></ul><ul><li>Categorization; </li></ul>
  18. 18. Retaining <ul><li>Easy to navigate website leaves a customer happy and willing to come back; </li></ul><ul><li>E-Newsletter; </li></ul><ul><ul><li>War Room News ; </li></ul></ul><ul><ul><li>New Product Releases ; </li></ul></ul><ul><ul><li>Holiday Purchases ; </li></ul></ul><ul><li>Privacy concern is a big issue for Oakley; </li></ul><ul><li>Focus on Customer Service; </li></ul>
  19. 19. Learning <ul><li>Through newsletters; </li></ul><ul><ul><li>Gathering information; </li></ul></ul><ul><li>Email: </li></ul><ul><ul><li>Feedback and comments; </li></ul></ul><ul><ul><li>Helps in upgrading or enhancing the website; </li></ul></ul><ul><li>Toll-free numbers; </li></ul><ul><ul><li>Gives a one-to-one contact with a customer; </li></ul></ul>
  20. 20. Conclusion <ul><li>Will likely to be successful; </li></ul><ul><li>At least for another few years; </li></ul><ul><li>Reasons: </li></ul><ul><ul><li>The sales forecast is looking good; </li></ul></ul><ul><ul><li>Company focuses on NPD and distribution expansion; </li></ul></ul><ul><ul><li>Positioning as a leader of the market; </li></ul></ul><ul><li>Questions? </li></ul>

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