Warby Parker case study

Warby Parker’s environmental trends are the demographic trends of aging in society, where they market more eyeglasses to senior citizens due to growing eye issues. Another trend that works with and against Warby Parker is a technology that is available through the internet. Customers can preview and purchase their items at their leisure thanks to online shopping. The same effect is going against it because some customers are skeptical of internet shopping and choose to buy in person. The desire of the group to outsource the manufacture of frames and lenses to China and Italy is one of the industry phenomena that is working for it.

2. Warby Parkers social mission has had a tremendous effect on the firm’s success by boosting its sales volume. According to research, this is because a majority of American consumers are likely to switch brands and buy products of a company that supports a noble social cause provided the price and quality are equal.

3. Warby Parker may choose to expand into products beyond glasses if it finds market gaps in the perceived industry it’s eyeing and could make a good profit in it. It could also diversify into other products as a means of boosting its revenues especially if the eyeglasses industry is not growing.

4. The reasons that would support Warby Parker not to diversify may include too many restrictions in the perceived industry for new firms such as government and legal barriers. Also if getting into the new business require massive amounts of money for a start-up. Also, if competitors are operating under large economies of scale thus lowering their average cost and prices, it would make Warby Parker encounter losses from high costs of production.

5. Firstly, Warby Parker success in disrupting a Luxottica near monopoly of the industry came from its resolution to do an end-run around Luxottica and manufactured its glasses. Secondly, the company’s choice to sell online drastically lowered its prices to just $95 compared to Luxottica’s $700. Thirdly, the company created a brand which made people passionate about boosting its sales. Lastly, its social cause to give away a pair of glasses to the poor for every pair sold increased its customer base and sales.

6. Entrepreneurs learn that the first thing crucial of any business startup is being able to study the industry they are venturing in and finding market niches which can be a huge chance for their success.

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Application Question

1. She risks failing to secure funding. The reason is that she will not be adequately prepared because she does not understand the industry too well like her competitors and opportunities in it thus the investor will not gamble with their money.

2. The environmental and business trends favoring Ubersense’s unique approach and service is their innovative and cutting edge application which offers special functions unavailable to its competitors and which enables coaches, player, and parents to get feedback to improve their performance.

3. According to Porter’s five forces model, Eric Andrews is most likely to be affected by the threat of new entry into the industry. The reason behind this is, his business being quite a simple one and which require less capital to start is likely to attract new firms offering the same service and products especially if entrepreneurs’ do an industry analysis and find it to be lucrative.

4. Panera Bread being an established chain of restaurants has a well-established casual dining segment which has received positive feedback from its clients and partners. Any firm that is trying to penetrate this market would need to make a massive investment to compete fairly with Panera Bread being a huge chain restaurant which operates at high economies of scale. Also, its specialty food has made it a leader in the nation fitting the consumers changing preferences. Firms may, therefore, find it difficult to penetrate a market which the company enjoys national support.

5. Silk Soymilk’s success in the mature industry market was as a result of innovation and creativity in which the corporation came up with an entirely new product which the rivals never thought. The company was able to provide a perfect substitute with more nutritional value for its clients than just regular milk.

6. I would advise her to venture into the business and be creative in the products that she produces. Creativity would attract new clients to her business being a mature industry and also act as a barrier entry especially if her rival would not match her exemplary fashion in creativity.

7. The motor industry may be affected by economic changes such that the more money in consumers’ pocket will drive them to purchase more motorcycles. High fuel prices will force consumers to buy bikes for cars. Demographic changes will increase motor vehicle sales since scare resources will force people to look for a cheaper alternative to car transport. The regulatory changes will be for less air-polluting machines on the road giving motorcycles industry a high edge concerning sales.

8. The advice I would give my friend is that despite his novel cleaning product being superior to others, Walmart can use the “buyer group concentration” power to force him cut down his prices because many substitute products are available which are competing to be bought by the few large companies like Walmart. I would also advise him that his product being undifferentiated from other suppliers except in quality can make Walmart play him against other suppliers to get a price reduction.

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9. Considering that the soft drink industry is dominated by two global companies operating at massive economies of scale, my advice to her would be to try and bring down her prices to the industry’s level and perhaps volunteer to donate a portion of her profit so a social cause. This move would attract new customers who feel that she is undertaking a just course.