The’Future’of’’ - mbacasecomp.com · KTown’Consul,ng’Group K C G Core’Competences 9 January6,2015 CurrentSituaon# Analysis# Alternaves# Implementaon# Conclusion Social#

K-‐Town Consul,ng Group

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The Future of Warby Parker

Mee'ng with Mr. Gilboa and Mr. Blumenthal

January 5, 2014

TU Kaiserslautern

Nicole Muskalla

Andreas Seegmueller

Philip Tent-‐Beaumont

Marius Vennemann

K-‐Town

Consul'ng

Group

January 6, 2015 1


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Main challenge

January 6, 2015 2

How can Warby Parker increase both their sustainable growth and their

social commitment?


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Agenda

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• Current situaFon

• Analysis

• AlternaFves

• ImplementaFon

• Conclusion


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Key Issues Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 4

Strong compeFFon

Access to rural area

Low staFonary market presence

Low brand recogniFon


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Objec,ves Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 5

Increase Sales Stay socially responsible

Penetrate rural area

Increase brand recogniFon


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Business Model

January 6, 2015 6

Lifestyle affordable for everyone

Design External ProducFon MarkeFng

Warby Parker Classroom

Showroom

Online Store

Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

Value Chain

Customer Service InnovaFve

Business model

Price/ Quality RaFo

Social response-‐bility

Core Competences Facts

Revenue: $ 5,000,000 Product sold in: 24 countries Employees in HQ: 300


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Core Competences

January 6, 2015 7


Social Responsibility

Reasonable Prices

Customer Service

InnovaFve Business model

DonaFons: -‐ for every sold pair of glasses one pair is donated


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Core Competences

January 6, 2015 8



Reasonable Prices

Customer Service


-‐  IntuiFve online stores

-‐  Personal assistance from well educated employees

-‐  Free shipping



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Core Competences

January 6, 2015 9



Price/Quality raFo

Customer Service



-‐  InnovaFve design

-‐  ProducFon at same facility like compeFtors

-‐  Direct sales

-‐  IntuiFve online stores

-‐  Personal assistance from well educated employees

-‐  Free shipping

à Strong core competences can be used to reach objecFves


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Customer Segmenta,on Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 10

Social responsibility

Income

low

high

low high

à Use of trend towards social responsibility


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Market Posi,oning Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 11

Price

Quality

low

low

à Strenght: price/quality raFo

high

high

Luxo^ca

Warby Parker


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BCG-‐Matrix Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 12

Price

Market Share

à Market share too low, high growth à  investments needed

high

Market Growth

Warby Parker Glasses

low high

high

low


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External Analysis Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 13

Rivalry

Entry Barriers

Bargaining power of customers

SubsFtutes

Bargaining power of supplier


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January 6, 2015 14


Rivalry Bargaining power of customers

Entry Barriers SubsFtutes

-‐  High number of suppliers for material -‐  High number of producers -‐  No Special resources needed


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-‐  One big compeFtor -‐  Luxo^ca: 80% -‐  Several small compeFtors


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-‐  Increasing demand -‐  Aging society -‐  Growing populaFon -‐  Limited number of supplier


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-‐  No huge investments needed -‐  No special technology needed


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-‐  No real alternaFves, customers depend on product -‐  Contact lenses, operaFons


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à High market potenFal


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Market Analysis Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 20

Europe

Slow popula'on growth

Aging society

Only small cultural differences

Stable poli'cal situa'on

Asia

Huge popula'on growth

Purchasing power of people increases

Governmental regula'ons: coopera'on partner needed

Cultural differences

à Europe promising market


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SWOT Analysis Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 21

-‐  Innova've business model

-‐  Social responsible acFons

-‐  High quality, lifestyle products

-‐  Low prices -‐  Customer Services

S W-‐  Low marke'ng

investments -‐  Dependence on

stakeholder -‐  Small product

porbolio -‐  Low number of

stores

-‐  Increasing demand -‐  Aging society -‐  PopulaFon growth -‐  Expansion to other

countries

O T -‐  Power of Luxo\ca à Buy out Warby Parker -‐  CompeFtors copy

business strategy


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Main challenge

January 6, 2015 22


social commitment?


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•  Increasing physical stores (↔ online presence)

•  Increasing rural presence

•  MarkeFng acFviFes for higher brand awareness

Alterna,ves Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 23

Following alternaFves will all aim at...


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January 6, 2015 24

Focus on domes'c market

Focus on worldwide expansion

Stay with current product por]olio Focus on U.S. Focus on expansion

Increase product por]olio Diversify products Globalize and diversify


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January 6, 2015 25

Increase sales Stay socially responsible

Penetrate rural areas

Increase brand

recogni'on

Focus on U.S.

Focus on expansion

Diversify products

Globalize and diversify

Objec'ves

Alterna'ves


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January 6, 2015 26

Increase sales Stay socially responsible

Penetrate rural areas

Increase brand

recogni'on Rank

Focus on U.S. + + + ++ 1

Focus on expansion ++ + + + 1

Diversify products + + + o 2

Globalize and diversify + o + o 3

Objec'ves

Alterna'ves

è Concentrate on U.S. market in short term while preparing the European expansion for the long-‐term


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Implementa,on Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 27

< 2 years >2 years

Building the business

US

Global

Being socially

responsible

US

Global

MR Set up Stores

MR

MR

Management Team

Set up Stores

Modify Busses Drive Busses

OpFonal Price Increase

Donate Bubble Glasses to NPO

Drive Busses


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Building the Business Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 28

•  Increase number of physical stores •  Market research to find real estate and profitable

locaFons •  Focus locaFon on state capitals •  Set up 10 stores per year

Building the domesFc Business


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•  Employ new staff to manage market entry •  Find real estate in Europe to manage from •  Set up 5 stores per year •  Focus locaFon on country capitals •  First: Germany, Sweden, Finland, France and Norway

Building the global Business


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Implementa,on Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 30

< 2 years >2 years

Building the business

US

Global

Being socially

responsible

US

Global

MR Set up Stores

MR

MR

Management Team

Set up Stores

Modify Busses Drive Busses

OpFonal Price Increase

Bubble Glasses

Drive Busses


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January 6, 2015 31

•  Evaluate rural areas with demand

•  Buy and modify busses to expand WP Class Trip •  •  Frequent the areas

Being socially responsible domesFcally


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January 6, 2015 32

•  Offer customers to donate 2$

•  Donate bubble glasses to NPO e.g. Unicef for use in Africa

Being socially responsible globally


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Net Present Value Analysis in US$ Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 33

Net Present Value Analysis in US$ Cost of Capital 15%

U.S. expansion European expansion

Year 2014 2015 2016 2017

Sales 7,000,000.00 14,000,000.00 18,000,000.00 22,000,000.00

Material Costs 1,400,000.00 2,800,000.00 3,600,000.00 4,400,000.00

Ren'ng costs 3,120,000.00 6,240,000.00 7,800,000.00 9,360,000.00

Personnel Cost 1,500,000.00 3,000,000.00 3,750,000.00 4,500,000.00

Investment Costs 2,000,000.00 1,500,000.00

Net income -‐1,020,000.00 1,960,000.00 1,350,000.00 5,700,000.00

Present Value -‐1,020,000.00 1,704,347.83 1,020,793.95 3,747,842.52

Net Present Value 5,452,984.30

èVery profitable project with a NPV of approx. US$ 5.5m


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Net Present Value Analysis Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 34

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

2014 2015 2016 2017

Expected Sales Development in US$:

47,5m 61,8m 80,3m 104,4m

54,2m

75,4m

98,4m

126,6m

Without expansion project With expansion project


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Risk and Con,ngencies Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 35

Impact

Probability high

high

low

low

1.  HosFle takeover

2.  Rising material costs

3.  No acceptance in Euro[pe

1

2

3


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Objec,ves Current SituaFon Analysis AlternaFves ImplementaFon Conclusion

January 6, 2015 36

Increase Sales Stay socially responsible

Penetrate rural area

Increase brand recogniFon


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Main challenge

January 6, 2015 37

Short-‐term: -‐  Focus on domesFc market -‐ Expand WP Class Trip

Long-‐term: -‐  Increase presence in Europe


social commitment?


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Thank you for your aPen,on!

Mee'ng with Mr. Gilboa and Mr. Blumenthal

January 5, 2014

TU Kaiserslautern

Nicole Muskalla

Andreas Seegmueller

Philip Tent-‐Beaumont

Marius Vennemann

K-‐Town

Consul'ng

Group

January 6, 2015 38

Documents

The’Future’of’’ - mbacasecomp.com · KTown’Consul,ng’Group K C G Core’Competences 9 January6,2015 CurrentSituaon# Analysis# Alternaves# Implementaon# Conclusion Social#