Luxottica's internationalisatoin and globalisation strategy Essay

Luxottica's internationalisatoin and globalisation strategy - Essay Example The researcher of the paper will examine the elements of the gradualist approach used by the company in its globalisation strategy. It will examine the competitive strengths of Luxottica. This will be followed by a critical view of the distribution strategy used by the company to capture the markets in the various countries it operates within. Corporate strategy refers to the long term, company wide plans instituted and implemented by top level management. Luxottica began in 1961 as a small obscure Italian optical manufacturer. It was originally set up to provide spectacles for the local markets and this was the main strategy employed in the first first decade of operations. Within this time period, the strategy was focused on establishment of the brand in Italy. This means that the owners just sought to provide for the local customer base in the home country. Within the first decade, the company grew sufficient competency and skills in the manufacture of spectacles. Whilst the compe tencies increased, the brand became admirable overseas. In 1971, the company made major contacts outside Italy and began to export. This strategy was simply based on the production for a larger customer base who dwelt outside Italy. The corporate vision was still local in nature. The only variation was the increase in demand caused by the introduction of new customers outside the borders of Italy. In the early 1970s, the plan was simply to manufacture and sell to wholesalers in foreign countries. The wholesalers in these foreign companies had to find ways of selling the Luxottica products. Luxottica remained Italian in outlook. In the 1980s, the focus changed. Luxottica decided to pursue an international corporate strategy. In this drive, they quit the strategy of just producing for wholesalers. They rather sought to produce the spectacles and get some control in the sales and distribution of the product in foreign markets. This led to the growth in international distribution networ ks and channels. In the 1990s, the Luxottica went public. It floated shares on the New York Stock Exchange and later the Milan Stock Exchange. This led to a solid capital base which provided the funding to expand and capture a larger market share in foreign countries. The strategy again changed in the mid-1990s where the company focused on the acquisition of new brands in the spectacles industry. This complemented the expansion of the distribution channel which led to the acquisition of more retail outlets in USA, Asia Pacific and the Rest of the World. International Marketing Strategy In 2007, there were over Luxottica centers around the world. This was made up of over 6,400 outlets globally. Luxottica's international strategy brings the firm a sales of over $6.4 billion each year. This is quite large and can be credited to the marketing strategy that it has developed over the past years. The international marketing strategy used by Luxottica is similar to what Professor Piercy wil l call 'the process of going to the market' (Piercy 13). It involves three steps: value definition, value creation and value deliver to customers (Piercy 14). In this process, the company's top level management examines international demands and expectations. This normally involves the critical examination of marketing trends and other financial indicators