LensCrafters 2003 Annual Report Download - page 27

5352
COMPETITIVE ADVANTAGES
Management of Luxottica Group considers the following factors to be key to its success, past, present and future.
Vertical integration has allowed Luxottica Group to become the worldwide leader in the optical industry and to
manufacture high quality eyeglasses with the lowest production costs and the highest margins.
• All significant components of the eyewear production and distribution process are managed internally:
• design
• prototype manufacturing
• product development
• production of moulds and individual parts of the frames
• production of crystal and polycarbonate lenses for sunglasses
• Worldwide distribution through an extensive distribution network, both wholesale and retail.
Efficient and flexible manufacturing facilities allow the Group to fulfill the needs of the optical marketplace in a
timely and cost-effective manner, all of which while also being able to react promptly to changing market trends.
• The Italian manufacturing facilities are ISO 9001-certified, highly automated and rank among the most efficient in
the optical industry
• Each facility is tailored to a specific production technology, thereby enhancing both the productivity and quality of
products and operations
• Total control over all key phases of production allows for swift improvements in the manufacturing process and
research of new operating techniques, while stimulating technological development and improving quality
• To ensure product quality, each prescription frame and sunglass undergoes several stages of inspection, resulting
in a return rate for defective merchandise that is below one percent
• An advanced order and inventory control system allows Luxottica Group to closely monitor inventory levels.
Broad and diversified product lines has over the years allowed the Group to play a significant role in setting
new trends, the most important of which was changing the consumers’ perception of eyeglasses, from merely a vision
aid to a fashion accessory.
• Luxottica Group’s product lines represent one of the largest collections of frames available on the market
• Emphasis on design and continuous development of new styles to meet changing fashion trends and consumer
preferences.
Strong worldwide factory direct distribution network eliminates costly steps in the distribution chain,
providing customers with the absolute highest quality product at competitive prices.
• Through a unique and extremely efficient sales network, Luxottica Group distributes its products in approximately
120 countries, and operates 28 wholly- or partially-owned wholesale subsidiaries that are strategically located in
major markets worldwide. In markets where the Group does not have wholesale subsidiaries, independent
distributors sell Luxottica Group products.
• Each wholesale subsidiary operates its own network of sales representatives, most of whom are exclusive
• The Group’s control over the distribution network also allows it to provide superior customer service by efficiently
satisfying customer preferences and requirements both prior to and following a sale.
Excellent customer service that allows the Group to meet the unique tastes and requirements of customers in
different countries.
Luxottica Group offers:
• A broad array of distinct collections for each country
• A computerized ordering system to deliver frames in the shortest possible time, so that customers can more
dynamically control their inventory levels.
Strong presence in the retail business provides a major outlet for prescription frames and sunglasses
manufactured by Luxottica Group as well as an important opportunity to interact directly with the end consumer to
monitor changing fashion trends and consumer preferences.
• Through LensCrafters and Sunglass Hut International, Luxottica Group is the leader in the mid- to premium- priced
categories of the North American optical retail market both in the prescription and sun segments
• OPSM stores now provide the Group with market leadership in the important Australian market, as well as a retail
presence in other Southeast Asian markets
• Finally, Sunglass Hut International stores in Australia are key in the sun strategy of the Group.
Expertise in identifying, acquire and integrate complementary businesses has allowed the Group to
benefit from the resulting synergies while consolidating its leadership in the optical industry.