Case study of Oakley, Inc.

1
Case study of Oakley, Inc.

• Prepared by Donatas Sumyla
• 12/14/2004

2
Company Overview

• Why Oakley?
• Principal activities are to design, manufacture
  and distribute consumer products
• Products include performance and prescription
  eyewear, athletic equipment, apparel, footwear
  and watches
• Sold through various locations
• International
• Has 550 patents and 875 trademarks

3
Company Overview (cont.)

• Revenue in 2003 - 521.5 million
• Net income after taxes - 38 million
• Revenues increasing every year
• Major competitors
• Nike
• Reebok
• Luxottica
• In 2003 employed 2,456 people

4
E-Business Marketing Goal and Strategy

• New Product Development and Distribution Channel
  Processes
• Idea generation
• Idea screening
• Differentiation through
• Category diversification strategy
• Distribution diversification strategy

5
E-Business Marketing Goal and Strategy

• Products
• Great accuracy
• Latest technologies
• Latest scientific capabilities
• Careful selection of the retailers for their
  ability to add value
• Staff education
• Focus on introducing new categories and products

6
New Product Introduction (NPD)

• Oakley Thump - worlds first performance
  eyewear combining patented optics with an
  internally integrated MP3 music player
• Launched on November 20th, 2004
• Product launches in international markets too
• Expected success

7
Oakley Apparel

• Fastest growing and largest newer category
  contributor for past two years
• Approximately 65 of sales generated from
  international markets
• Accessories represent the largest segment of this
  category
• Strong focus on sporting goods
• Womens apparel represents close to 20 of the
  category

8
Oakley Prescription Eyewear

• Focus on ophthalmic frame and prescription lens
  categories
• Launched 7 exclusive ophthalmic frame styles and
  3 additional exclusive frame styles in 2003
• In-house lens processing labs goals
• increase capacity to meet demand
• provide tighter quality control
• provide simplified ordering
• Increase margins
• Increase prescription penetration

9
Iacon Sunglass Specialty Stores

• A sunglass retailing chain located in Scottsdale,
  Arizona
• Operated 80 mall-based stores/kiosks
• Sunglass Club a new Iacon concept targeted
  towards outlet malls
• Oakley products increased from 28 of Iacon sales
  for 2001 to 32 for 2004
• Opportunity to expand retail operations and
  receive experienced retail management team

10
Financial Overview
11
Financial Overview
12
Financial Overview
13
Financial Overview

• Key Growth Drivers
• Development of electronics
• Proprietary advancements in eyewear technology
  and new styling
• Enhanced product assortment combined with an
  expanded distribution network
• Company-owned retail store expansion
• Strategic marketing initiatives

14
Primary Stakeholders

• Customers
• Investors

15
Value Bubble

• Attracting phase
• Engaging phase
• Retaining phase
• Learning phase
• Mostly refers to Oakleys website

16
Attracting

• Has website to let people know about the company
• Well known brand
• Good positioning and branding
• Focus on younger crowd interested in winter and
  extreme sports
• Content on the website
• For customers
• For investors

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Engaging

• To keep a visitor on the website
• Precise info about the product
• Toll-free number available for not technology
  savvy people
• Quick description of Oakleys O Store
• Easy navigation
• Categorization

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Retaining

• Easy to navigate website leaves a customer happy
  and willing to come back
• E-Newsletter
• War Room News
• New Product Releases
• Holiday Purchases
• Privacy concern is a big issue for Oakley
• Focus on Customer Service

19
Learning

• Through newsletters
• Gathering information
• Email
• Feedback and comments
• Helps in upgrading or enhancing the website
• Toll-free numbers
• Gives a one-to-one contact with a customer

20
Conclusion

• Will likely to be successful
• At least for another few years
• Reasons
• The sales forecast is looking good
• Company focuses on NPD and distribution
  expansion
• Positioning as a leader of the market
• Questions?