Pearlvision Case Analysis
Essay by nyerram • September 22, 2017 • Case Study • 1,468 Words (6 Pages) • 1,168 Views
Pearle Vision Case Analysis
Course: MKTG_ 5604
By: Nagaraj Yerram
Overview
Pearl Vison was founded in 1961, by Dr. Stanley Pearle, whose novel business model combined optometry care with eyewear sales, allowing customers to receive an eye exam and buy glasses in one place. Become the world’s largest optical retailer, and continued to be the leader till 1994, when it was overtaken by rival LensCrafters. Since then Pearle Vison never fully rebounded for various factors. In 2004 it was acquired by Luxottica Group, the vertically integrated eyewear giant that also owned LensCrafters. Luxottica brought Srinivas Kumar on board in late 2011 to lead Pearle Vison.
Situation Analysis
Pearle Vison in 2012,
- Pearle Vision, with 622 stores (corporate 266 + franchised 356), was struggling to compete with and differentiate itself from industry leader LensCrafters, also owned by the same parent group Luxottica.
- Facing increasing competition from low-price competitors, such as Wal-Mart's optical stores, were adding further competitive pressure.
- Mr. Kumar identified issues such as Pearle Vison Identity, where does it fit in the marketplace, etc.
- After studying Pearle Vision for about a year, Mr. Kumar announces his plans for revitalizing the chain.
- Will his strategy work?
Eyewear Market and background
Below are some facts about eyewear market in 2012,
- 181 million people in the U.S. wore corrective eyewear, that is three fourths of U.S. adults.
- US vision care industry estimated worth was $35 billion. This included all types of care and wear.
- Consumers purchased new glasses every 2.2 years.
- Glasses were expensive.
- Four main drivers to purchase new eyewear are
- Medical need (new prescription)
- Replacement need (damaged or lost)
- Timing
- Update one’s look
- Consumers paid $255 on average on a complete pair of glasses.
Major Eyewear Retail players are
- LensCrafters (around 11% market share)
- Luxottica Retail - Pearle vision, & others except LensCrafters (Around 10% market share)
- Walmart (around 6% market share)
- HVHC (around 4% market share)
- Costco (around 3% market share)
- Others (around 66% market share)
SWOT Analysis
Strengths
- Established National Chain
- Pioneer in revitalizing eye care.
- Made eye care easy and convenient.
- Owned by Luxottica, who is one of the biggest player in eye care industry.
- Second-largest eye care insurance (EyeMed Vision care) owned by Luxottica.
Weaknesses
- Trusted but fading eye care brand.
- Diminishing identity or its value proposition.
- Outdated store appearance and environment.
- 15% franchise fee (advertising & royalties) but and not enough support to justify the amount.
- Poor customer satisfaction, which led to close the stores.
Opportunities
- Regain its identity in eye care with fashion eye wear. “Never compromise at Pearle Vision”. “We care your eyes with look”, etc.
- Focus more towards Franchisee owned store as they are outperforming than corporate stores.
- Reduce corporate store overheads.
- Improve compelling marketing.
- Improve new store design and appearance to latest market trends.
- Provide better frame collection with latest fashions.
- Improve customer service and relationship management.
- Improve the technology
- Valuing customer time and voice.
- Create a customer experience and standards.
- Design improved process and train employees and franchisee team.
- Improve franchise support system
- International expansion
Threats
- Increasing individual practices with retail stores.
- National largest retailers such as Walmart, Costco with customer loyalty
- More and more purchasing options such as online shopping with huge discounts. Online shopping options. Available at a such reasonable price so that most consumers can at least try once.
- Value chains such as Visionworks and America’s best. These chains are providing eyewear at a reasonable price.
Overall SWOT Analysis:
Of the above, the biggest strength of Pearle Vison was it created a new model for eye care, become the market leader before 1994. Its lost its market share to LensCrafters, which is focused on eyewear. I feel, either way it would have lost its market share. I don’t think competition alone contributed. After reviewing Harvard Business’s Pearle Vision case, it is clear that, Pearle Vision itself could not keep up its quality and commitment, and that caused to lose its market share. Conclusion, there were decent opportunities to regain its name, brand value and expand. Need to reposition and revamp with new vision and commitments. I will cover more details in following sections.
TOWS Analysis
[pic 1]
Case Analysis
Kumar’s Vision of Pearle Vison
Mr. Kumar took Pearl Vison lead position in late 2011 and started doing his ground work. He visited almost all the stores, and saw wide variation in operating practices, cohesion between retail staff and in-store eye doctors, and store setup; frustrated staff & franchisees. Big thing, despite its tagline, “Clearly different”, Pearle Vision lacked a distinctive value proposition.
In February 2013, Mr. Kumar unveiled of his plan for revitalizing Pearle Vision. Here are some of his plan details.
- The company would reduce corporate stores to 50 from 266, and use those for training, experimentation and franchise recruitment.
- He proclaimed Pearle Vison future was in franchising as he observed franchises were more profitable than corporate stores.
- Emphasize on eye health and doctor patient relationship, positioning Pearle Vision as a peer of independent optical practices.
Positioning of Pearle Vision brand in 2009.
[pic 2]
Source: Exhibit 10, Harvard Business Publishing Pearle Vision case.
Mr. Kumar created new Positioning plan, and did not want to segment with LensCrafters. Here are his Positioning plans.
[pic 3]
Source: Exhibit 16, Harvard Business Publishing Pearle Vision case.
Although, Mr. Kumar was optimistic about his plan, he acknowledged significant uncertainty ahead.
Pearle Vision in 2017.
As this was in 2013, if you check the current information of Pearle Vision, none of the Kumar’s plans got succeeded.
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