Corporate Analysis of Oakley

Oakley

Oakley is a respected sunglasses manufacturer attempting to spread into new product categories. Founded in 1975, Oakley has transformed from a company providing a single product line into a diverse action sports brand. Strong brand equity and innovative design command premium prices and make Oakley the brand that it is today.

Culture devoted to innovation

Oakley's culture has been dedicated to innovation since its inception. The company's first mover status began with a revolutionary product in motocross. Former CEO Jim Jannard developed a handgrip with a rubber "O" design to prevent hand slippage. The unique handgrip developed brand equity, while at the same time providing unmatched practicality. The history of innovation has been persevered as Oakley expanded from eyewear into apparel, accessories, prescription eyewear, footwear, wristwatches and consumer electronics.

Although the work environment at Oakley is casual, everyone works hard. Self-initiative is a requirement for Oakley employees. The typical employee is positive, a team player, and a self-starter. The employees are "constantly driven to challenge conventional wisdom" in order to create novel products.

Strategy based on practicality and design

Oakley's core strategy is the combination of science and art to create high quality products. Oakley is viewed as a lifestyle oriented brand with a leading sunglass position. Using the leverage granted by its brand recognition and more specifically its modern design capabilities, Oakley has been able to enter new product categories. Sales of the new product category rose 25% in 2004, showing that the diversification is paying off.

Currently, Oakley is adding new distribution channels to deepen its penetration into the consumer market. In the past, Oakley has been largely dependent on its sunglass sales to Sunglass Hut. Sunglass Hut, however, has recently been acquired by the Luxottica Group, and future relationships are uncertain at best. Oakley has started opening department store shops designed to showcase Oakley products in Macy's and Parisian stores. Oakley is also opening retail stores called "O Stores". By opening these new channels of distribution, Oakley will be able to eliminate its dependency upon a single customer.

Future