I.

Summary of the main content of the situational minicase

1. History of Formation and Development of Essilor
Essilor is a leading global company specializing in the production of corrective optical
lenses. It was established through the merger of two French optical companies in 1972: Essel
and Silor. The company's products are exported through an international network of local
distributors. The company initiated a global strategy by opening its first international plant in
the Philippines and gradually acquiring local distributors since 1979.
The global development of the company has occurred through a combination of new
investments, acquisitions, and alliances. Between 2008 and 2010, it formed alliances with 83
companies and added 45 partner relationships from 2011 onwards. As of now, Essilor is the top
player in its field, holding a market share of approximately 25%. It has generated revenue of
7.2 billion euros with a profit of 757 million euros and employs 64,000 people worldwide.
In January 2017, Essilor announced a merger with the Italian company Luxottica, creating a
new entity with combined revenue exceeding 15 billion euros, over 140,000 employees, and
sales in more than 150 countries.
Business Process of Essilor
The business process of Essilor regarding corrective optical lenses is built upon five key
factors:
- Customer Approach: Essilor has an extensive network of independent eyewear stores
(300,000 stores) worldwide and numerous prescription laboratories to provide eye
examination services and information about Essilor lenses to customers. This ensures
easy access for customers to Essilor's products and services.
- Lens Production: Essilor employs advanced technology to manufacture high-quality
lenses, meeting customer needs and facilitating quick customer service. Orders are sent
to one of Essilor's 490 prescription laboratories or 33 lens manufacturing plants
worldwide. Essilor has 14 distribution centers to manage the transportation of raw
materials to factories and finished lenses to eyewear stores.
- Finished Lenses: Both sides of the lenses are produced at the factory and delivered to
eyewear stores.
 - Prescription Lenses: Only the front surface of the lens is manufactured at the factory, and
the back surface and coatings are applied later in one of the 332 laboratories for
completion. Once finished, the lenses are delivered to eyewear stores.
- Lens Distribution: Essilor has an extensive distribution network to ensure that lenses are
delivered to customers quickly and efficiently.
- Customer Service: Essilor provides comprehensive customer service to ensure customer
satisfaction with their experience with Essilor's products and services.
- Research and Development: Essilor invests significantly in research and development
to develop new lenses and improve the quality of existing products. With over 600
researchers in 10 R&D centers, Essilor is committed to innovation and continuous
improvement.
Strategy of Essilor
Essilor builds its market development strategy on four key strategic pillars
- Continuous Innovation: Essilor is committed to maintaining its leadership position by
constantly innovating in products, services, and marketing. Focusing on innovation
enables Essilor to flexibly meet the increasing demands of customers and build strong
relationships with optometrists worldwide.
- Growth in Emerging Markets: Essilor directs its development towards the average
markets in emerging countries. This is seen as a significant opportunity for Essilor with
high growth potential, simultaneously driving their global expansion.
- Acquisitions and Collaborations: Essilor actively seeks opportunities for acquisitions
and collaborations to expand its scale and operational scope. This strategic approach
helps them position themselves in a dynamic market environment and establish strategic
partnerships.
- Market Care in New Regions: Essilor not only focuses on providing products but also
expands its services by offering eye examinations and providing eyeglasses in hard-to-
reach areas. This not only broadens the customer base but also contributes to efforts to
improve global eye health.
These strategies demonstrate Essilor's commitment to maintaining its leadership position,
seizing opportunities in new markets, expanding through acquisitions and collaborations, and
ensuring special care for hard-to-reach markets. Essilor has achieved notable success, not only
as a leader in the eyeglasses and contact lenses market but also by expanding its global
footprint, embracing advanced technology, and contributing to the improvement of global eye
health. Essilor can continue to rise with its robust market development strategy, creating
significant successes in the future.
Question 1: Based on the description of the business system, what are the strategic and
organizational challenges for Essilor’s global management?
Answer
Based on the description of the business system and Figure 5.17, there are several
organizational and strategic challenges for Essilor's global management activities:
- Decentralized Management: Essilor's global presence and extensive network of optical
shops, prescription laboratories, factories, distribution centers, and research and
development centers create a decentralized management structure. Coordinating and
ensuring consistency across these diverse operations globally can be a significant
challenge.
- Cultural and Regulatory Diversity: Operating in multiple countries with diverse
cultures, languages, and legal regulations poses challenges for Essilor. Adapting to local
business regulations, managing diverse cultural expectations, and ensuring compliance
with various legal frameworks require a nuanced and flexible approach.
- Integration of Acquisitions: Essilor's growth strategy involves acquisitions and
alliances, as seen in the significant number of companies it acquired or allied with
between 2008 and 2010. Integrating these acquisitions smoothly into Essilor's existing
operations and culture, and achieving synergies, can be a complex organizational
challenge.
- Supply Chain Complexity: Essilor's complex and global supply chain, involving 33
factories and 14 distribution centers worldwide, presents challenges in terms of ensuring
consistency, efficiency, and compliance with production and distribution processes
across various countries and regions.
- Multinational Workforce Management: With employees and leaders from different
countries, Essilor must navigate the complexities of building and maintaining a
multicultural work environment. Ensuring uniformity in implementing rules, processes,
and core values across diverse locations can be demanding.
- Technological Advancements: Operating in the optical industry, where technology and
innovation are rapidly evolving, requires Essilor to continually invest in research and
 development. Staying ahead of technological advancements and ensuring that
innovations are implemented effectively across global operations is a strategic
challenge.
- Post-Merger Integration: The merger with Luxottica in 2017 creates additional
challenges in terms of integrating two large and distinct entities. Harmonizing different
organizational cultures, business processes, and systems can be critical for the success of
the merged entity.
- Market Access in Developing Regions: Essilor's strategy includes the growth and
development of middle markets in emerging countries. Ensuring effective market access,
addressing local needs, and navigating the unique challenges of these regions require
strategic planning and adaptation.

In summary, Essilor faces strategic and organizational challenges related to its global
footprint, cultural diversity, acquisitions, supply chain complexity, workforce management,
technological advancements, post-merger integration, and market expansion in developing
regions. These challenges require a carefully crafted global management approach to ensure
sustained success and growth.
Question 2: From Figure 5.18 it appears that the most potentially attractive markets are in
emerging countries.Do you think that Essilor’s strategic pillars are compatible with these
market prospects?
Answer
Figure 5.18 illustrates that the most attractive markets are in emerging countries. This is
because these markets are experiencing a rapid increase in the middle-class population,
individuals with the ability to afford higher-end products and services. Essilor's strategic pillars
include:
1. Innovation in products, services, and marketing, as well as maintaining quality
relationships with eye care professionals worldwide.
2. Growth and development in average markets in emerging countries.
3. Pursuing acquisitions and collaborations.
 4. Providing eye examination services and supplying eyeglasses in hard-to-reach areas
to develop new markets.
These pillars can collectively contribute to Essilor's success in emerging countries.
Specifically, Essilor's innovation pillar can help the company meet the growing demands of
consumers in emerging countries, where the middle class is rapidly expanding and has the
capacity to spend on premium products and services. Essilor can leverage its innovation
advantage to develop products and services that cater to the needs of these consumers.
Essilor may focus on developing affordable products and services that still meet high-quality
standards. The company can also concentrate on creating products and services tailored to the
specific needs of consumers in emerging countries. For instance, Essilor could develop
products and services designed to suit the climate or environment in these countries.
Furthermore, Essilor's quality relationships with eye care professionals could contribute to
the company's success in emerging countries. With a vast network of eye care professionals
globally, including in emerging countries, Essilor can reach potential consumers and provide
them with high-quality products and services.
Ĩn conclusion, Essilor's strategic pillars have the potential to lead to success in emerging
countries. However, adjustments to the company's strategy may be necessary to align with the
specific needs of these markets. Some specific examples of how Essilor could adjust its
strategy for emerging countries include:
1. Focusing on more affordable products and services.
2. Marketing its products and services in a way that aligns with the culture and lifestyle
of consumers in emerging countries.
3. Implementing training and professional development programs for eye care
professionals in emerging countries.
Essilor can apply these strategies to reach potential consumers in emerging countries and
provide them with the high-quality products and services they need.

Question 3: What issues would be involved in developing the business in China, India,
Indonesia and Russia?
Answer
Essilor is a business that specializes in the optical sector; it primarily produces and markets
lenses and other optical goods. The following problems and procedures could arise for Essilor
if it expands its operations in China, India, Indonesia, and Russia:
- Economic: The low level of consumer expenditure in developing nations like China,
India, Indonesia, and Russia makes it harder to market things. As a result, Essilor
modifies its pricing to make products in this market more accessible.
- Local marketplaces and customs: Every nation has its own distinct markets, laws, and
customs. For Essilor to maximize its business plan, it must comprehend this diversity
and adjust accordingly.
- Competitors: Competition among local competitors: These markets may have strong
local businesses. Essilor needs to build a competitive strategy to maintain and expand its
vision.
- Important rules and principles: Changes in policies and laws may have an impact on
the processes involved in manufacturing, importation, and distribution. Essilor must
keep an eye on these factors and adjust as necessary.
- Infrastructure and distribution: Infrastructure issues: Sometimes, infrastructure and
distribution related issues can affect the production and delivery process.
- Staffing and training: Finding and retaining staff: There may be rough formulas for
finding and retaining staff of sufficient quality to operate effectively in new schools.
- Technological transformation: Technological transformation: These markets may
require Essilor to adapt to rapid technological transformation and deliver
innovative products and services.
- Chain application management: Essilor must assess and enhance its supply chain
management procedure to guarantee product continuity and quality in the global
marketplace.
- Building reputation and brand: Essilor needs to start consulting on brand promotion
and building a positive reputation within the business community and consumers.