Differentiation strategy in the high-end sunglasses market. Ranking of top 5 companies both in the US and in Europe and analysis of their competitive advantage.

Abstract

The analysis is deeply rooted in the following research question and relative subquestions which have represented the guidelines for developing this study with a consistent and focused approach. Research Question: what are the different strategies and business models used by the Top 5 manufacturing companies in the sunglasses market? Subquestions: • How is the high-end sunglass industry structured? How has it changed in the last 10 years? Who are the key manufacturing companies in Europe and in the US? • What is the business model of the main players operating in the industry? Does it change depending on the geographical location or is it the same globally? How do these players build their competitive advantage? Is this sustainable over the long-term? • How are these companies internally organized to run their business? How are the business units structured? Is there any difference in the internal organization between the companies under scrutiny? The Thesis aims to fill these research gaps by providing a plain view of the industry dynamics and the distinctive features of the leading manufacturing companies. The main findings firstly define who are the most relevant sunglasses manufacturers on the basis of their brand portfolios, sales volume and internationalization of activities. On the other hand the study reveals the entry of new potential players that have already begun to challenge incumbents. The analysis shows that nowadays the sunglasses industry is highly concentrated market with huge margins in the hands of few companies. An impressive market share belongs to a single company, that has been able to create a rift between its business and the one of the other competitors. The explanation to this gap has been identified in the strategies adopted by the companies, especially regarding more downstream steps of the value-chain, that are distribution and marketing activities. The interesting insight that emerges is that leading sunglasses manufacturers are enlarging their core business, driven by an increasing market orientation. The largest firms have been able to overcome the wholesale business and they earned the chance to compete also in the distribution field, acquiring existing retailing chains and opening new stores around the world. The analysis shows that, by doing so, they are able not only to increase their sales but also to push competitors’ products out of the market. Since we are talking about high-end products, further finding shows the key-role played by licenses entrusted by the major fashion houses. The analysis of recent cases has disclosed the importance of having a well balanced brand portfolio: manufacturers need to orientate investments for enhancing the value of house brands rather than focusing on licensing agreements.