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Coastal Contacts' Business Development in the North

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Coastal Contacts' Business Development in the North View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Simon Fraser University Institutional Repository COASTAL CONTACTS’ BUSINESS DEVELOPMENT IN THE NORTH AMERICAN ONLINE RETAIL EYEGLASS MARKET by Curtis Petersen Bachelor of Commerce, University of British Columbia PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In the EMBA Program of the Faculty of Business Administration © Curtis Petersen 2011 SIMON FRASER UNIVERSITY Spring 2011 All rights reserved. However, in accordance with the Copyright Act of Canada, this work may be reproduced, without authorization, under the conditions for Fair Dealing. Therefore, limited reproduction of this work for the purposes of private study, research, criticism, review and news reporting is likely to be in accordance with the law, particularly if cited appropriately. Approval Name: Curtis Petersen Degree: Master of Business Administration Title of Project: Coastal Contacts’ Business Development in the North American Online Retail Eyeglass Market Supervisory Committee: ___________________________________________ Mark Moore Senior Supervisor Senior Lecturer ___________________________________________ Mark Selman, Second Reader Director, Learning Strategies Group Date Approved: ___________________________________________ ii Abstract The following paper is an analysis of Coastal Contacts Inc. and the North American retail eyeglass industry. Coastal Contacts is an online retailer of contact lenses and prescription eyeglasses. At the time of writing the company has recently entered the eyeglasses market. This industry has an underdeveloped online retail channel. The reason the channel has not developed as quickly as other products such as contact lenses is because eyeglasses are a more complicated purchase. As more purchases move online, retail market share for eyeglasses is expected to shift online. This paper looks at how Coastal Contacts can best position itself in order to maximize its benefit from this market shift. Keywords: Coastal Contacts; Online Retail; E-commerce; Market Share; Eyeglasses; Optical iii Dedication To Coco, if you read this I’ll be impressed. Scratch that; better not to read it. iv Acknowledgements Many thanks and love to Rachael; for being patient. v Table of Contents Approval ......................................................................................................................................... ii Abstract ......................................................................................................................................... iii Dedication....................................................................................................................................... iv Acknowledgements ......................................................................................................................... v Table of Contents ........................................................................................................................... vi Glossary ........................................................................................................................................... x 1: Introduction ................................................................................................................................ 1 1.1 Timeline .................................................................................................................................. 1 1.2 Background ............................................................................................................................. 1 1.3 Motivation for the Analysis ..................................................................................................... 2 1.4 Purpose of the Analysis ........................................................................................................... 2 1.5 Analysis Approach .................................................................................................................. 2 2: Company Background ............................................................................................................... 4 2.1 Ownership and Control ........................................................................................................... 4 2.2 Corporate Structure ................................................................................................................. 4 2.3 Corporate Scope ...................................................................................................................... 5 2.3.1 Businesses .................................................................................................................. 5 2.3.2 Geography .................................................................................................................. 5 2.3.3 Vertical Scope ............................................................................................................ 5 2.4 Products ................................................................................................................................... 6 2.4.1 Lenses ......................................................................................................................... 6 2.4.2 Frames ........................................................................................................................ 6 2.4.3 Designer Brands ......................................................................................................... 7 2.4.4 House Brands ............................................................................................................. 7 2.5 Customers ................................................................................................................................ 7 2.5.1 Existing Customers .................................................................................................... 7 2.5.2 Geography .................................................................................................................. 7 2.5.3 Age ............................................................................................................................. 8 2.5.4 Sex .............................................................................................................................. 8 2.5.5 Income ........................................................................................................................ 8 3: External Analysis ....................................................................................................................... 9 3.1 Industry Definition .................................................................................................................. 9 3.2 Industry Structure .................................................................................................................... 9 3.2.1 Industry Concentration ............................................................................................... 9 vi 3.3 Supply Chain ......................................................................................................................... 10 3.3.1 Brand Owners ........................................................................................................... 10 3.3.2 Brand License Holders ............................................................................................. 10 3.3.3 Frame Manufacturers ............................................................................................... 11 3.3.4 Lens Manufacturers .................................................................................................. 11 3.3.5 Optical Labs ............................................................................................................. 11 3.3.6 Retailers .................................................................................................................... 12 3.4 Strategic Groups .................................................................................................................... 12 3.4.1 Independents ............................................................................................................ 12 3.4.2 Retail Optical Chains ............................................................................................... 13 3.4.3 General Retailers ...................................................................................................... 15 3.4.4 Online Retailers ........................................................................................................ 16 3.4.5 Strategic Group Map ................................................................................................ 18 3.5 Industry Performance ............................................................................................................ 19 3.5.1 All Retail .................................................................................................................. 19 3.5.2 Online Retail ............................................................................................................ 20 3.6 Industry Attractiveness .......................................................................................................... 21 3.6.1 Porter’s 5-Forces ...................................................................................................... 21 3.6.2 Attractiveness of Online Retail ...............................................................................
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