When the Optometry Industry Wasn’t Looking
British optometry chain Specsavers arrived in Australian and changed the industry in a way that is too eerily similar to the fate of other sectors.
The market had always been dominated by OPSM and hundreds of small businesses scattered arounf Australia. Whilst OPSM is the dominant player, Specsavers has aggressively taken a large chunck of a fragmented market. It now has over 150 stores with an estimated revenue base $300 million.
Specsavers focussed its strategic growth plan by offering deep discount to customers, helping itself to the No.2 position. The implications of their strategy has been to force its competitors to lower price and more importantly slowed the rate of growth of its competitors.
Some of the collateral damage has also seen legal battles between the two groups that would make any lawyer teary eyed. However, the rising strength of the incredible Australian dollar has seen a fall in import prices for spectacles, frames and lenses and these benefits being passed on to consumers.
New technology will drive the growth the industry in a positive fashion and those businesses that are able to offer new product will be the real winners and help increase consultation revenues to offset the decrease in Medicare rebates.
The "budget" model continues to succeed in many industries – Walmart and Crazy Clarks are classic examples of providing product substitutes at cheap prices. Budget concepts ultimately change the competition and profitability of an industry – some in years and others overnight. The huge force drives consolidation and purchasing dynamics. Like any business, focussing on industry changes gives you an opportunity to stay competitive and ahead of the game. Strategy planning is so critical that its absence exposes small business to market forces that profoundly impact on future sustainability.
Looking at the optometry industry, some of the key success factors (listed below) that optometrists should be undertaking s part of the review and planning process are vital to ensure profitability and established strategic defenses.
Key success factors for operators in the industry
- Effective product promotion.
- Having an integrated operation
- Output is sold under contract - incorporate long-term sales contracts.
- Being part of a group buying, promotion and marketing scheme.
- Proximity to key markets.
- Having links with suppliers.
- Having a loyal customer base.
- Economies of scale.
For a free consultation contact us 07 38310077 / jeg@standardedge.com.au
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