Mission and Strategy
Being a global leader in the design, manufacture and distribution of sun and prescription eyewear with high technical and design standards, Luxottica’s mission is multifold.
• Vertical Integration
• Brand Portfolio Management
• Design and Technological Innovation
• Market Expansion
• Financial Discipline
Mission and Strategy
Being a global leader in the design, manufacture and distribution of sun and prescription eyewear with high technical and design standards, Luxottica’s mission is multifold: to improve the well-being and satisfaction of its customers while simultaneously creating value for its employees and the communities in which the Group operates.
a unique vertically integrated business model
The Strategic Pillars
Luxottica’s long-term strategy is to continue to expand in the eyewear and eye care sectors by growing its various businesses, whether organically or through acquisitions. The Company will continue to focus on the following strategic pillars:
One of the competitive advantages underpinning the Group’s past and future successes is the vertically integrated business model that Luxottica has built over the decades.
The Group’s present structure, covering the entire value chain, is the result of a far-sighted choice made by the Company’s founder and current Chairman, Leonardo Del Vecchio, who understood the potential of a vertical integration strategy when he decided to make entire frames rather than just components. Vertical integration of manufacturing was gradually accompanied by the expansion of distribution, first wholesale and, from 1995, retail and by the creation of a key presence in the high value-added business of lens finishing.
Over the decades, the Company has vertically integrated all phases of the production process to attain a level of efficiency in line with the quality of products and services it offers. Direct control of the entire production platform makes it possible to verify the quality of both products and processes, introduce innovations, identify synergies and new operating methods and optimize time and costs.
Direct distribution enables Luxottica to offer its products in major developed and emerging markets and achieve a unique understanding of consumer needs and tastes both globally and locally. This capability is viewed as a strength by fashion houses that come to Luxottica to produce their eyewear collections and access the Group’s global and widespread distribution network.
The Company has a strong and well-balanced brand portfolio that includes a number of proprietary and licensed brands. Its composition is gradually modified by the acquisition of new brands and the addition of new licensing agreements along with the withdrawal of brands no longer deemed strategic. These actions are taken in order to continually attract a wide range of consumers around the world with different tastes and lifestyles.
The Company differentiates its products not only through innovation in style and design but also through a commitment to technological innovation.
As growth in wearable technology creates a new playing field for innovation, in 2014 Luxottica announced strategic partnerships with Google and Intel. Both collaborations will expand the limits of what eyewear can be by creating frames that are as intelligent and functional as they are beautiful.
Luxottica’s eyewear professionals and Google’s high-tech developers are devoted to designing, developing and distributing a new breed of eyewear for Google Glass and the multi-year R&D collaboration between Luxottica and Intel is aimed at fusing premium, luxury and sports eyewear with smart technology.
Luxottica is committed to maintaining and strengthening its leading position in the markets in which it operates.
It also focuses on evaluating opportunities to further penetrate emerging markets, a key driver of its longterm growth strategy. Luxottica aims at increasing its market expansion through stronger retail distribution while consolidating its wholesale network and further growing its presence in e-commerce, department stores and travel retail.
Luxottica has delivered solid sales growth, while maintaining a strong focus on operating profitability, return on investment and cash flow generation in order to provide a solid basis for future profitable and sustainable growth. The Company closely monitors working capital management and continuously focuses on debt optimization to help further strengthen its financial position, accomplish its key objectives, and ultimately improve the rate of return for shareholders.
Eyewear industry secular growth drivers
The eyewear industry is a structurally growing market.
It is estimated to grow by approximately 30% over the next five years, from today’s sales of approximately 900 million frames to approximately 1.2 billion, driven by the demand in both emerging markets and developed markets.
There are three main structural drivers behind this expected growth, which are described below.
- Additional 500 million vision correction wearers by 2020
- Increased need for eye correction due to behavioral changes
- 60% of global population has vision needs but only 25% gets vision correction
- Evolving and elevating the eyewear category in all markets and channels
- The smallest and fastest growing category within accessories