Operations Strategy
LensCrafters’ operations strategy focuses on providing an efficient, comprehensive, quality eyewear experience. The main strategic aim is to give customers a wide selection of eyewear, including glasses and prescription sunglasses. Customers are able to obtain an eye-exam, select frames, watch their glasses being made, and pay for their glasses within one hour. LensCrafters also seeks to provide customers with a high-quality product and superior customer service. The company’s seeks to create a competitive advantage by offering a high-quality product, combined with high-quality service. LensCrafters’ competitive advantage is also built on the idea of delivering the product and service in a combined fashion that does not lead to unnecessary wait times. Employees are trained to pay attention to the individual preferences of customers and ensure that they are completely satisfied with their purchases.
LensCrafters’ operational strategy is not necessarily unique enough to prevent imitation from competitors, particularly competitors that have significant financial resources and a solid retail distribution network. The idea of “one-stop shopping” for consumers is not new, but is merely transferred from other business models to that of prescription eyewear. Organizations such as Wal-Mart and Target use a similar operational strategy, but apply it consumers that wish to purchase a variety of general merchandise and food items from a single location. One can argue that superior customer service and high-quality products are not necessarily incorporated into Wal-Mart and Target’s operational strategies. Unlike LensCrafters, both retailers are classified as mass merchandise discount retailers. Yet similar to LensCrafters both retailers seek to create a high level of value for consumers. Given the fact that LensCrafters competes with traditional optometrists, the company’s operational strategy and competitive advantage is effective since it reduces wait time, is hassle-free, gives consumers more options, and implements the advantages of a retail format.
Operation Management Activities
Operation management activities can have a direct impact on the customer experience since managerial decisions determine what products are offered to consumers, employee staffing levels, job functions, employee training, and organizational culture (Hayes, 2002). Managers have typically made operational decisions based on business units or divisions. For example, LensCrafters’ retail operations are likely divided into regional units based on geographic location. In addition, there could be additional business units within the company’s retail operations. Revenues earned from eye exams could be separated from frame sales and prescription lens sales. In considering which types of frames and lenses to make available to consumers in its retail stores, managers may consider historical and projected sales volumes for individual products. This directly affects the lines of products customers are able to choose from when they visit a LensCrafters location.
Managers face several different challenges when making operational decisions. One of those challenges is the traditional view that competitors are to be treated as enemies. In an increasingly interdependent economy, manages have had to shift this viewpoint to one of increased cooperation (Hayes, 2002). The challenge is to make decisions that establish and leverage cooperative relationships with competitors and still maintain a unique identity in the marketplace. A second operational challenge is controlling a company’s fixed costs. Traditionally, operational managers have focused on controlling and reducing variable costs. These costs are often associated with unit production expenses and labor expenses. Within the past decade, fixed costs have begun to surpass variable costs (Hayes, 2002). This makes it more difficult for managers to manipulate profit margins, while maintaining adequate levels of customer service and quality.
LensCrafters’ Value Chain
LensCrafters’ value chain consists of a combined product and service. The service component includes the eye exams performed by independent doctors and the assistance customers receive from employees in selecting frames and lens options. Employees also provide assistance with ensuring the glasses are a good physical fit, as well as any necessary returns and exchanges. The product component consists of the glasses, but this product is also provided with high levels of efficiency. In terms of quality, LensCrafters’ operational strategy is effective at providing the same level of service and types of products consumers can obtain from traditional optometrists. The company offers professional eye exams, eyewear fittings, and adjustments. Quality can be measured in a variety of ways, but some common measurement tools include satisfaction rates, complaints, the existence of a quality control plan, and quality training/development for employees (Moleshi, Manesh, & Asiabar, 2015).
LensCrafters’ value chain certainly provides quality measures in terms of the manufacture of its products, the equipment used to manufacture those products within its retail locations, and employee customer service training. In addition, lab technicians and doctors display their degrees and certifications. Customers are also able to watch their lenses being made. This adds to the level of quality that LensCrafters provides its customers. Not only do the customers participate in the process, but the company demands that employees are formally educated and maintain professional standards.
The company’s business model creates value for customers by allowing them to not only participate in the manufacturing process, but to drive it. When customers enter a LensCrafters location, they are within immediate eyesight and greeting distance of employees. An employee greets customers to offer instance assistance and direct them towards the entire process. The doctors’ exam rooms and waiting areas are located near the front of the store. In fact, a store’s entire layout is designed to accommodate each step in the process in a sequential manner. Arguably, the store layout assists with efficiency and the company’s ability to provide a combined service and product within one hour.
An additional point of value that the retail store locations create for consumers is a wide selection of frames. Consumers can view separate wall of male and female designs. They are able to not only see the frame options, but try them on to see if they are a good cosmetic fit. Store employees help guide consumers to an applicable range of options, based on individual needs. For example, one consumer might need reading glasses for occasional use while another needs bifocals for daily wear. A significant portion of LensCrafters’ value creation comes from the level of individual service employees provide consumers. Typically, one associate assists a consumer through the entire purchase process, from frame selection, lens selection and personalized fittings.
Customer satisfaction is paramount to LenCrafters’ business model. The company’s thirty-day refund and exchange policy ensures that customers are completely satisfied with the products they receive. According to the policy, customers can obtain an exchange or refund within thirty days of the product’s original purchase. Customers are only required to pay additional funds if an exchange involves receiving an alternative product that has a higher value than the original product. The company has an “unconditional” exchange and return policy, meaning that consumers can exchange or obtain a refund even if they find that the color of the frames is not a good fit. Besides the unconditional exchange and return policy, LensCrafters’ offers a replacement discount for glasses that are broken within the first year of purchase. These policies likely increase customer satisfaction since they allow room for flexibility and service recovery.
Performance Measurements
The performance of LensCrafters’ service-delivery system design can be measured according to the number of repeat sales and use of LensCrafters’ professional services by individual customers. In other words, how many individual customers continue to visit LensCrafters for annual eye exams, eyewear purchases, and adjustments to existing eyewear. Do customers visit LensCrafters because it is accepts their insurance plans or for additional reasons? These measures of performance go beyond the generic assessment of customer satisfaction and are considered highly independent. Highly independent metrics measure root causes and are considered assumption-based measures (Apgar, 2011). By measuring the number of repeat visits by individual customers and the reasons why they continue to visit LensCrafters, managers would essentially be identifying the root causes of customer satisfaction (or dissatisfaction).
A second performance measure for the service-delivery system design could be the amount of returns and exchanges at individual retail locations. The measure would need to go beyond the mere number of returns and exchanges to identifying the reasons, and whether the customers’ return or exchange experience resulted in repeat business. The number of returns and exchanges (along with the underlying reasons) is directly related to product and service quality. A high number could indicate problems with employee service levels and/or product quality. It could also indicate problems with employees’ abilities to provide personalized service and clearly identify customers’ needs. Whether a customer’s return and exchange experience resulted in repeat business would further identify whether quality and service standards were being met. It would also identify customer loyalty, which is often directly related to high levels of satisfaction and product quality.
Technologies
The case indicates that advanced technology is used in the lab to manufacture the eyewear. This advanced technology aids in meeting industry specifications. Lab facilities and store areas are kept clean, modern and professional. Besides the professional eye exam rooms that contain professional equipment, the retail locations are equipped with professional mirrors and fitting stations. Employees use professional equipment to adjust frames and customers are allowed to examine the look of the product in the mirrors. The professional equipment throughout the location adds to the value of the LensCrafters’ experience by ensuring customers that they are receiving a high quality product/service. Since eye exams and eyewear fall under the realm of healthcare and healthcare services, professional equipment ensures that customers feel safe, confident and assured. It also lends credibility to the skills of the employees.
Since LensCrafters locations are located in high-traffic shopping centers and shopping malls, the retail format can give the impression that employees are not as qualified as a traditional doctor’s office. The professional atmosphere, equipment, waiting rooms, state of the art eye exam equipment and professional, clean labs help counteract those impressions. The labs where the lenses are manufactured are enclosed in clear, glass doors and windows. This alone allows the customer to not only view the process, but see that a professional job is being performed. Lab technicians are dressed in white coats, which add to the image of competent employees. Customers can rest assured that they are not purchasing a discount product, similar to what they might find in a drug store or a discount retail store. They are receiving the same level of care and professionalism that they would from a traditional doctor’s office, but have the opportunity to exercise a greater degree of control over the process.
References
Apgar, D. (2011). Assumption-based metrics: Recipe for success. (cover story). Strategic
Finance, 93(5), 27-33.
Hayes, R. H. (2002). Challenges posted to operations management by the “new
economy”. Production & Operations Management, 11(1), 21-32.
Moslehi, S., Manesh, P. A., & Asiabar, A. S. (2015). Quality measurement indicators for Iranian
health centers. Medical Journal Of The Islamic Republic Of Iran,291-5.
