Entrepreneurship: Opportunity Analysis and Development of Sunglasses

This report reflects on a venture to market high-end sunglasses in the United Kingdom, focusing on the opportunity to launch a venture called Economic Glasses (EG). It identifies the problem of high prices charged by major brands like Ray-Ban and Prada compared to the low manufacturing costs, exploiting customers. EG aims to offer premium quality bipolar sunglasses with advertisement and LCD blockers at affordable prices, targeting consumers involved in sports and driving. The value proposition includes providing sunglasses in both physical and digital markets, ensuring accessibility to a broad customer base. The report also discusses the origins of the entrepreneurial opportunity, the brand's potential to attract middle and upper-class customers with its pricing strategy, and the business model's key partnerships, activities, and customer relationships. The analysis incorporates cognitive entrepreneurial theories to highlight the strategic decision-making involved in developing the venture.

Running head: PRICING OF SUNGLASSES
Pricing of Sunglasses
Name of the Student
Name of the University
Author note

1
PRICING OF SUNGLASSES
Table of Contents
Section 1. Introduction:...................................................................................................................2
Section 2. Opportunities:.................................................................................................................4
(i) Problem perceived:.................................................................................................................4
(ii) Origins of entrepreneurial opportunity and proposed venture:..............................................5
(iii) Value proposition:................................................................................................................6
Business model analysis:.............................................................................................................7
Diagram:..................................................................................................................................7
Analysis of the business model:..............................................................................................8
Section 3. Opportunity development:............................................................................................12
Use of cognitive entrepreneurial theories:.................................................................................13
Section 4: Conclusion:...................................................................................................................14
References:....................................................................................................................................15

2
PRICING OF SUNGLASSES
Section 1. Introduction:
The venture that I would reflect on is a venture to market high-end sunglasses in the
United Kingdom. The study opens with an analysis of an article published on CBS News which
mentions that most of the high-end glasses like Ray Ban and Prada are actually manufactured by
an Italy based company named Luxotica (Cbsnews.com. 2018). The emphasis of the paper would
remain on the supplier aspect of Luxotica which would bring into light the opportunity to launch
a venture called Economic Glasses.
The problem which I seek to bring forward is that the cost of manufacturing of pairs of
sunglasses are very low compared to the high price the marketing companies like Prada and
Ravban charge which means that they cheat the customers. The article brings into light that
though the global spectacle market is dotted with several big brands, these brands are dependent
on one supplier of glasses which manufacture pairs of glasses for them. The article further points
out that it is Luxotica which embosses the trademarks of the brands on the pairs of glasses
according to which these pairs of glasses are priced. Thus, it can be argued that this disparity
between cost of production and sales prices of the glasses is actually unjustified and
exploitation of customers. I can also reflect on the fact that Luxotoca, being apparently the
largest suppliers of finished products to these companies utilises its position to charge immense
prices from these companies. This also raises the prices of the sunglasses which the customers
have to bear. This gap between the customer expectations and the actual marketing mixes of the
high-end spectacles marketers would form the base of the new venture. The new venture would
aim to acquire pairs of glasses directly from China and market them under its trademark which
would read EG.

3
PRICING OF SUNGLASSES
My value proposition for the new sunglasses marketing venture would be offering of
premium quality bipolar sunglasses with advertisement and LCD blockers at affordable
prices. The main attribute of the pairs of double polarised sunglasses which EG would market in
the market of the United Kingdom would the lenses would enable in reducing the glare of sun
and protecting the wearer from the glare of the screens. Pinder et al.(2016) mention that the sun
rays get polarised on falling on flat surfaces. This results in glare in the eyes in people driving or
working in the sunlight and LCD displays. The divers, boatmen and pilots have also reduced
reduced visibility and glare due to its polarised effect. It can be inferred from the discussion that
glare poses serious risk to the people involved in dangerous activities like boating in the open
sea. The double polarised IRL (It’s a real life) lenses would allow the viewers reduce the glare
light and LCD screen of the lenses, thus enhancing view. Thus it can be pointed out that sun-
glasses would not only enable the consumers look good but also enhance their safety (Herhausen
et al. 2015). This means target customer segments of EG would primarily consist of people
involved in sports like diving and skiing. The target customers would also drivers who are
distracted due to led screens. This means that the demographically the customer segments
can also be divided into upper class and middle class. The geographic segmentation of the
customer segments would consist of people living in the cities (Daronkola 2017). This would
allow the firm to make international quality pairs of glasses available to large middle class
consumer base, the target customer segment in the United Kingdom at reasonable rates,
thus creating value for the latter. The second value proposition which EG would provide the
customers in the United Kingdom would be that the pairs of bipolar sunglasses would be
available in a wide range of places, both in the physical market as well as digital market (Jung et

4
PRICING OF SUNGLASSES
al. 2017). The customers in the United Kingodm wpuld be able to buy the pairs of sunglasses at
the outlets of EG as well as at the retail chains. The fim, in order to gain deeper market
penetration would also make some of the models, especially low price models would be
available in the third party retail stores. This would enable the customers residing in the small
towns and villages avail the pairs of sun glasses. As far as the digital market place is concerned,
EG wpould market the sunglasses on its official website as well as on third party ecommerce
websites. I have learnt from the discussion that while the first unique value proposition
relates to the product and pricing component of the marketing mix, the second value
proposition rests on the place and promotion aspects of the marketing mix of EG (Vilnai-
Yavetz and Tifferet 2015).
Section 2. Opportunities:
(i) Problem perceived:
I observed that the customers buying premium quality sunglasses have to pay high prices
which rests only on the brand value of the company marketing the pairs of sunglasses to a great
extent which uncovers several problems in the marketing mixes of the eyewear marketing
companies. The first problem I recognised upon reflection is that the supplier of most of the high
end sunglasses namely, Luxotica literally a sort of monopolistic position in the global premium
sunglasses industry. The marketers of the sunglasses like Rayban are dependent on the supplier
and this allows the latter to charge high prices for each model of sunglasses. The companies like
Prada are high-end premium fashion firms, are forced to acquire the finished products, the pairs
of sunglasses at high prices. The second problem which I have recognised is that the companies
marketing high-end pairs of sunglasses add their goodwill value to the costs of the sunglasses
which in turn raises the prices of the sunglasses. It can also point out that the strategic raw

5
PRICING OF SUNGLASSES
materials like frames and lenses are not expensive. This means that the cost of production of
pairs of sunglasses is very low compared to the exorbitant prices the customers have to pay. The
third problem which can be pointed out from the discussion that the marketers of the pairs of
sunglasses like Prada to a certain extent are exploited by the supplier, Luxotica. The leading
marketers of the high-end designer glasses in order to maintain their market position and retain
their customer bases are dependent on Luxotica to supply them with readymade pairs of
sunglasses bearing their respective names. It can also be pointed out that installing an in-house
manufacturing process would require the companies to invest immense amount of capital to
acquire technology, machinery and human resources. Thus, the companies in order to keep their
operation costs low are compelled to outsource their manufacturing operations to a number of
large scale suppliers like Luxotica. Thus, it can be inferred from the discussion that Luxotica,
owing to its almost monopolistic position in the market of designer eyewear is able to exploit not
only the customers but the marketers of the high-end sunglasses as well.
(ii) Origins of entrepreneurial opportunity and proposed venture:
The opportunity I see is launching of a new business venture of acquiring sunglasses
from suppliers in China and market the same in the United Kingdom under the name Economic
Glasses or EG. The new business venture would have lesser brand value then the designer wears
like Prada. Apparently, this fact looks like a disadvantage but the firm would form strategies to
take advantage of this lower brand value. It can be pointed out that brand value of products are
assets to the respective companies owning them. Thus, it this respect it can be pointed out the
companies add a portion of their goodwill to the prices of the products to get positive returns on
the investments which they bear in holding these products. It can be pointed out in this respect
that EG owing to its lower brand value at the initial stage would be able to charge lower prices

6
PRICING OF SUNGLASSES
for its models of sunglasses. I can further point out that this idea is used by companies marketing
consumer goods in order to achieve deeper market penetration right in the initial stage of
introducing new products. The low prices enables large population of middle class customers to
purchase the products which in turn enables the marketer of the goods generate immense
revenue. In fact, it can be pointed out that its pricing strategy is more effective in earning returns
on investments at a faster pace compared to target a small number of consumers with high priced
products. EG would market high quality pairs of sunglasses at reasonable prices which would
allow it to attract customers from both middle class in the United Kingdom. I can also opine in
this case that EG by the virtue of offering high quality sunglasses at reasonable prices would also
be able to attract upper class customers in the country. The proposed venture called Economic
Glasses would conduct business within the shores of the United Kingdom. The firm would then
embark on expanding its business to other markets like the United States. The firm would
maintain its unique selling propositions namely high quality products and reasonable prices
while operating in the United States as well. It can also be pointed out that the firm in order to
gain access to market capital to operate in the British and American market as well as continue
its foreign expansion strategy would get listed on the London Stock Exchange. This would
enable it to source capital from the securities market in Britain. The firm would then launch its
branded premium high priced sunglasses range which would target primarily the upper class
customers. The sunglasses would be bipolar in nature and would be available in large numbers of
shades. The models would also be available in variety of shapes to suit customers with varying
face contours and colour preferences.

7
PRICING OF SUNGLASSES
(iii) Value proposition:
The value proposition method of Economic Glasses would be offering high quality
double polarised LED blocker sunglasses at affordable prices. This would enable the customers
from the middle class obtain sunglasses which would protect their eyes and make them look
stylish at the same time. The company in order to enhance value creation for customers would
also offer contact lenses, at a later stage. The firm besides marketing high quality and stylish
sunglasses would also market lense cleansers at reasonable prices. The cleansers would be
compatible for the branded models of sunglasses as well like Prada. Thus, here again the venture
would create value for both the middle and upper class customers. I can further reflect that the
value proposition of ED would expand into its place strategy as well. ED would make the
sunglasses models available in both its own branded outlets as well as retail chains. The firm, in
order to gain deeper penetration in the eyewear industry in the United Kingdom, which is already
extremely competitive would make selected models available at the retail stores as well. This
means that the value creation proposition of the brand would also take into account its
distribution chain to gain deep market penetration. The sunglasses marketed by ED would also
be available to customers on its official shopping portals as well as third party ecommerce
portals like Amazon.
Business model analysis:
Diagram:
Key Partners Key activities Value proposition Customer
relationship
Customer
segments

8
PRICING OF SUNGLASSES
Chinese
manufacturer
(manufacturer
and supplier of
sunglasses)
Distributors
Retailers
Retail chains
Banks(finance
providers)
Marketing high
quality polarised
sunglasses,
marketing of lense
cleaning solution and
after sales services
Marketing high
quality bdouble
polarised sunglasses
with LED blcokers
Helping customer
segments to solve the
issue of glare.
Polarised sunglasses,
lense cleansers and
product bundles
consist of these two.
Satisfying the needs
of customers of
eyewears which
enable them to deal
with the issue of
glare.
Minimum viable
product consist of
sunglasses
Building
relationship with
customers with
high quality
polarised
sunglasses.
Geographic
segments:
Urban people
living in cities
and town.
Psychographic
segmentation:
Sports loving
people and
people
involved in
risky
profession like
drivers
Key Resources Channels
Financiala resources
Human resources
Tecnnologcial
resources
Knwoledge
Distruction channels:
Offline as well as
online
Revenue streams-
sales of goods
Sales outlets
Retail chains
Retail stores
Online marketing
portals
Cost structure Revenue structure
Fixed costs: Rent of property, Loans,
Taxes on property, warehouse
expenses
Variable costs: Salary of employees,
stationary, marketing expenses,
inventory costs
Key resources which expensive:
Fininshed goods from China
Key activities which are expensive:
Purchase of finished
products(spectacles), payment
gateways and online marketing portals
Customers are ready to pay for high-quality polarised
sunglasses at affordable
Currently they have to pay high prices for high quality
sunglasses which is unjustified considering the low cost of
production of sunglasses
Revenue model would consist of sale of sunglasses both in
the brick and mortar outlets as well as on ecommerce
portals.
Pricing tactics would consist of offering discounts on
product bundles as well on single units during festive
seasons around the globe.
Analysis of the business model:
The business model of the new proposed business venture namely, Economic Glasses
would aim to boost the productivity of the polarised sunglasses marketing firm. The business
model would consist of nine blocks as per Blank (2013). The following are the analysis of the
nine blocks:
Key partners:

9
PRICING OF SUNGLASSES
The key partners of EG would be the IRL glasses manufacturer located in China, the
international firm from which the former would buy the pairs of sunglasses. Porter and
Heppelmann (2014) mention that in order to maintain the competitive advantage in the market, it
has become important for marketer companies to maintain specific product standards. This fact
can be applied for EG as well, as the venture being new in the market of the United Kingdom
already dominated by brands like Prada. Hence EG in order to maintain the product standards
would source finished goods, pairs of polarised sunglasses from the Chinese manufacturer. The
other key partners would consists of distributors, retailers and retail chains which would enable
EG to sell the pairs of polarised sunglasses to the end consumers.
Key Activities:
The key activities of which the value proposition of EG would require would consist of
offering high-quality sunglasses to customers at affordable (Hair et al. 2015). The distribution
channels would aim to ensure maximum market penetration for companies. This is required to
gain strong competitive advantage in the market and generate high amount of revenue (Jensen
2017). The distribution channel would consist of its own outlets, retail chains where its products
would be available and smaller retailers especially in the semi-urban areas. The firm would aim
establish and maintain long term customer relationship. The firm would build this relationship by
offering high-end glasses at affordable prices (Rodriguez, Peterson and Ajjan 2015). The revenue
streams of the firm would consist revenue earned by marketing the polarised sunglasses in the
market of the United Kingdom.
Value propositions:

10
PRICING OF SUNGLASSES
The value proposition of EG would consist of marketing if high-end polarised sunglasses
to its customers which would value to the customers. Skålén et al. (2015) mention creation of
value of firms depend on their power to introduce products which are capable of address and
solving existing problems customers are facing. Considering the case study, it can be pointed out
that the customers are facing the problem of having exorbitant prices for buying branded
sunglasses (Cbsnews.com. 2018). EG would aim to solve this problem by offering sunglasses of
same standard as its competitors at less prices.
The bundles of products which EG would offer would be polarised sunglasses, cleansers
or their bundles. The product bundles would enable customers to buy more products at
discounted prices (Macdonald, Kleinaltenkamp and Wilson 2016).
Customer Relationships:
Economic Glasses would aim getting, maintaining and growing customers by offering
high quality products. The firm would establish relationships with both middle and upper class
customers. Creation if customer relationships would be connected all the other blocks. For
example, establishment of customer relationship paves way for revenue generation and cost
diversification which corresponds to revenue streams and cost structure blocks respectively.
Customer relationships are costly since attract high prices in the initial phase also increase the
cost of production (Pisano 2015).
Key resources:
The key resources for value propositions are financial resources, material resources,
human resources, technological resources and knowledge resources. The distribution channel
would consist of online and offline channels. The customer relationships would be created by

11
PRICING OF SUNGLASSES
offering high-quality polarised sunglasses at affordable prices and by maintaining continuous
communication with customers. The company for this purpose would acquire and manage
immense body of customer data (Santos and Spring 2015). Lemon and Verhoef (2016) propose
that the companies can utilise the customer data to manage customer journey by using the
customer experience mapping in order to create positive customer experience by offering
appropriate products. EG following this opinion would stress on creating positive customer
experiences by mapping the customer data in its possession. This would lead to generation of
high revenue by offering appropriate products.
Channels:
The customer segments of EG want to be accessed through both online and offline sales
channels. Dinner et al.(2014) point out that in keeping with customer preferences business
organisations use omnichannel to sell products to customers. EG following this opinion and suit
of its competitor companies, would use both online channels like ecommerce and offline
channels like retail chains to market its products. However it can be pointed out that online
channels like ecommerce channels as well as official website portal attract maximum number of
customers to ascertain more sales. The sales channel choice is matched by EG using its customer
data by forming appropriate customer persona mapping to offer appropriate products to
customers (Gallino and Moreno 2014).
Cost structure:
The cost structure of EG would be divided into fixed costs and variable costs (Campbell
et al. 2015). The fixed costs would include rent of property, interests on bank loans and
taxes on property, warehouse expenses. Taxes the firm would pay on its net profits would