Case Study Analysis of Sof Optics
Solution
Sof-Optics – Background (External Factors)
Sof-Optics is a small (specialty-niche) player in a $155M contact-lens market. (Three competitors occupy 75% of this market (Bausch + Lomb (51%), American Optical (14%), Continuous Curve (10%); approximately twenty players (including Sof-Optics’ ~3%) occupy the remaining 25%.) This consumer space is already appreciable in size (~5M contact-lens wearers in 1980), and promises exponential growth in future years (only 10% of ~50M prospective lens-wearers in America have even tried soft contact lenses).
Contact-lens magnates recognize a dual-segmented product space – private practice (i.e., doctor/ophthalmologist supply) versus retail (i.e., health + beauty, pharmacy). Lost/broken lens replacement (constituting ~30% of sales) and lens supply products (roughly $50 per wearer per year) comprise strong subsidiary markets. In stark contrast to larger players’ generalist/mass-market offerings, Sof-Optics strives to differentiate itself as a higher-quality (often custom-fabricated) product supplier. This approach has borne some fruit; Sof-Optics lenses are widely perceived as having quality and standards superior to their Bausch + Lomb counterparts, granting Sof-Optics preferential reception in the specialty (doctor/ophthalmologist) lens segment.
Sof-Optics – Background (Internal Factors)
Sof-Optics, headquartered in San Francisco, was founded by ophthalmologist Carl Wagner and physicist Dr. Johan Schmidt in 1977. The corporation employs 248 staffers (including twelve customer-service agents and twenty geographically-distributed sales representatives), maintains a 50,000 sq-ft manufacturing facility (also in California), and produces ~2000 lenses (one-third of max theoretical capacity, using an advanced plastic-rod grinding/machining process) per day.
Sof-Optics fulfills two types of contact lens orders – “standard” (off-the-shelf preformed lenses, in forty variants, fitting ~75% of the human
Sof-Optics – Background (External Factors)
Sof-Optics is a small (specialty-niche) player in a $155M contact-lens market. (Three competitors occupy 75% of this market (Bausch + Lomb (51%), American Optical (14%), Continuous Curve (10%); approximately twenty players (including Sof-Optics’ ~3%) occupy the remaining 25%.) This consumer space is already appreciable in size (~5M contact-lens wearers in 1980), and promises exponential growth in future years (only 10% of ~50M prospective lens-wearers in America have even tried soft contact lenses).
Contact-lens magnates recognize a dual-segmented product space – private practice (i.e., doctor/ophthalmologist supply) versus retail (i.e., health + beauty, pharmacy). Lost/broken lens replacement (constituting ~30% of sales) and lens supply products (roughly $50 per wearer per year) comprise strong subsidiary markets. In stark contrast to larger players’ generalist/mass-market offerings, Sof-Optics strives to differentiate itself as a higher-quality (often custom-fabricated) product supplier. This approach has borne some fruit; Sof-Optics lenses are widely perceived as having quality and standards superior to their Bausch + Lomb counterparts, granting Sof-Optics preferential reception in the specialty (doctor/ophthalmologist) lens segment.
Sof-Optics – Background (Internal Factors)
Sof-Optics, headquartered in San Francisco, was founded by ophthalmologist Carl Wagner and physicist Dr. Johan Schmidt in 1977. The corporation employs 248 staffers (including twelve customer-service agents and twenty geographically-distributed sales representatives), maintains a 50,000 sq-ft manufacturing facility (also in California), and produces ~2000 lenses (one-third of max theoretical capacity, using an advanced plastic-rod grinding/machining process) per day.
Sof-Optics fulfills two types of contact lens orders – “standard” (off-the-shelf preformed lenses, in forty variants, fitting ~75% of the human