Specsavers
Case Study
Specsavers
Case Study

Ilyas Morrison
Ilyas Morrison

Table of Contents
Summary 3
Results and Discussion Experiment 1 3 Task 1 5

Experiment 2 6 Task 2 6

Experiment 3 7 Task 3 8 Task 4 9 Task 5 12 Task 6 13 Task 7 14

Experiment 4 15
Task 8 15
Task 9 21
Task 10 22

Conclusion 24

References 25

a) Why might solving a problem present a business opportunity?
Discuss with explicit reference to at least 3 of the guest speakers.
An intrinsic quality of a problem is demand itself. Demand is a major, if not the most influential variable on a business opportunity, whether that be from a single individual or the entire population. As a result, a problem is arguably the primary source of an unexploited populace and/or economy and drive of innovation. The scale to which the problem is solved, measured relative to its complete effectiveness. In reference to a business opportunity I will refer to the definition according to Daniel Myska, “A business concept that, if turned into a tangible product or service offered by a business enterprise, will result in a financial profit”. It is explicit the effectiveness of which the product/service itself approaches a problem will directly correlate to the unconditional demand said product/service will receive and is paramount to the likelihood of a successful business idea. As well as this level of effectiveness of the idea, the degree to which objectives are achieved and the extent to which targeted problems are solved₃ also has incomparable influence, creating the most revolutionary strides in industry specific markets.
I believe all sources of innovation arise for a solution to a problem but for my first example, I will draw from the experience of Eliska Finley, the founder of A Dictionary Hotel. It is a great example where, due to previous experience in the market Eliska was able to spot a growing problem amongst the population; the increasing need for safe, clean and affordable shelter in central London. As a result of knowing and understanding her audience, the rise in worldwide travel and housing prices, also prompted by huge level of demand for youth accommodation caused her to seek a solution in the form of her company. She draws the magnitude of her success and quick growth solely due to the unwavering levels of demand caused by the problem becoming so prominent.
Secondly, Arthur Kay has foreseen the exponential rises of population density particularly within urban areas, causing a perpetual inability of supply to meet housing needs especially as urban areas run out of land to build. In addition the consumption of energy and the consequent growth of waste in landfills, he noticed using statistical evaluations, will boom exponentially and in order to meet growing demands sought the solution in the form of bio-bean, clean energy by harvesting what would have been waste, solving several conundrums at once, ergo his source of his innovation.
Finally, it was due to the fact Alex Siljanovski had worked on and had to cope with the problems first hand while on a construction site. He noticed not just inefficiencies but immobility’s of the workforce and the time wasted avoiding or trying to run on site construction fluently. His experience caused him to found Basestone, allowing construction companies to join together several operations in real time from a handheld device, solving the problems of communication and cutting huge inefficiencies.

b) In addition to solving a problem, what are the other ways of identifying a business opportunity? Draw on the talks from at least 3 guest speakers.
To elaborate on the identification of a business opportunity (as defined previously) in the greatest possible detail, I will utilise the DIFA business model of opportunity. The model is simple but appropriate in many circumstances and illustrates how particular variables exploit gaps in the industry or revolutionise the market, exploiting unrealistic profit for an indefinite period of time. These variables vary between models but the ones I believe of greatest relevance I have described below each with examples of entrepreneurs who have actively or unsuspectedly taken advantage of such a model. | E.g. Entrepreneur and Company | DemandThe ability of the idea to generate income stems from its ability to generate demand or the inelasticity of its already existing demand. If the demand is unconditional or very inelastic, profit margins are high and you can afford to remain out of reach of the consumers with a lower budget constraint. If this condition is satisfied the opportunity will generate easy revenue even if not of maximum efficiency and/or minimum costs making it less risky and very attractive to an individual and shareholders to invest in the idea. | The most appropriate example is of The Dictionary Hotel found by Eliska Finley. Her ideology behind its success before promoting the opportunity lay prominently on its unconditional rising demand from her growing target market. This meant after all the boundaries of gaining and utilising capital, at no point was steady cash flow an issue for the company. | InnovationIf the idea is unusually innovative, it has a high chance of being revolutionary to the market. There is less if any competition and profit is likely unrealistic for a relatively long period of time. | For bio-bean, innovation is soul of its success. The ability to utilise a previously unused waste product meant no competition for its demand consequently allowing the company to be paid for its removal. The market and technology lies within his control and is likely to experience unrealistic profit as he remains a monopoly. | FeasibilityThe idea must be possible and necessary technology available for the idea to be deemed an opportunity. If it is within easy reach and the initial consensus suggests few or no serious boundaries which would prevent short or long term growth in any sector, it would be deemed a great one. | Before Basestone made its first real steps, Alex Siljanovski knew he not only had the applicable knowledge for the task ahead but acquiring experts, for example for helping him design the software or market the company, was only a small hurdle. His initial capital was suggestively relatively low and at the point of opportunity, no major boundaries to entering the market. | AttractionThe best opportunities will have clear benefits including individual passion for the project, to the entrepreneur, its customers and possible shareholders or investors. Easily generating capital and providing a source of motivation when sacrifice is required. | Phil Pinnel, Co-founder of Scratch created the idea simply due to this own passion for food and the need for him personally to acquire ready meals during a busy working lifestyle. He also knew and believed in raising the comfort of the millions of people in a similar position and of course with such high proposed consumer demand pleased investors. |

a) Why is a strong organizational culture important for a start-up? And why was it so important for Specsavers in particular?
Strong organisational culture refers to the emphasis the surrounding environment places on several behavioural factors as a team. These factors depend on a range of components such as the management style, strategy and fundamental accomplishments in the work place. It is evident all around us and statistically (Abstract- Figure 1), factors such as these will affect many necessary and positively provocative characteristics required for exponential growth such as the handling strategy of the human resources department for the motivation and productiveness of the workforce.
For a start-up it becomes paramount to initial growth to counter act the liability of newness. Small companies cannot usually compete with cost or sales so it becomes more important to benefit and out compete on a strategic level, where management structure and praising particular characteristics would allow a start up to provide a more personalised or bespoke service, exploiting a niche. For example, this characteristic was the importance of innovation lead growth and promoted all aspects of possible change within Specsavers. Mary was regularly praised for her organisational skills and her ability to pass those good qualities not only on to the company structure but the employees themselves.
It was particularly important for Specsavers because of the small founding team and capital, which meant they had to focus on a brand image lead by the experience of a family run enterprise which the larger firms couldn’t compete with. In addition, they were the first to jump on to the advertising hole that had opened up and in order to maintain a head start, could not afford to waste any time or finance involving themselves in non-productive or non-beneficial practises. This was capable by not diversifying too early which would induce greater fixed costs, providing bespoke services raising brand loyalty, praising and rewarding hard work while enforcing all means of innovation in the workplace. Furthermore to continue this trusting persona of the brand they believed keeping it within the company would best suit the company long term focus even now they own the majority of market share, by means of nurturing their own children in the running of Specsavers.

b) What are other reasons for continuous innovation at Specsavers?
Innovation can be viewed as the application of better solutions that meet new requirements, inarticulate needs, or existing market needs₆. Ab ovo, Specsavers flourished and improved dramatically due to its ability to adapt to change and innovate around the systems and markets they were in. They knew there would be rising competition and where they couldn’t challenge on size, needed to adapt more effectively to a forcibly changing market.
‘Complete Price’
Specsavers was the first company to introduce a one off purchase for the frames and lenses, introducing transparency into the system. The company knew this would save time for the consumer, reduce the stress and effort while shopping and slowly but effectively reduce the perception of the elongated process, all in all drawing in demand from previously unexploited populace. Lens Mail
The service provided home delivery for contact lenses which would previously have to be collected. Knowing the aggravation this caused to consumers working life, the thought of not having to leave the home appealed to the masses and less mobile audience all the while encouraging a sense of brand loyalty for the perceived bespoke service. Raising barriers to entry for possible competition. Kids Go Free
Providing price discrimination to children meant the experience for the consumer dramatically became more cost efficient and pleasant due to a non-monetary motivated image perceived by the consumer. It also rose their target market and appealed to a larger audience in the short and long term; hoping the children will remain with the same service as they grow up. Direct Contact with Managing Director
This would have had a positive effect on the mentality of the working employees. The ability to talk to someone of genuine importance and power within the company developed a sense of family and promote any alleged innovation due to the individual sense of accomplishment and perceived employee influence.
All of these ideas in one way or another attempted to gain demand, loyalty and change the meaning of shopping for glasses by improving the experience. By commercialising the idea, competition which especially due to the sudden deregulation, was all around them, could not out compete even if the larger supermarkets who were diversifying their sales to lenses, attempted to exploit economies of scale and compete on price or even try predatory pricing. This increased competition was able to be controlled and out compete due to rapid growth as a result of the sources of innovation described above.

a) What is a new-venture team? Who are the primary participants in a start-up’s new-venture team? What was special about Specsavers’ new venture team?
A new venture team is an assembly of founders, key employees and advisers that move a new venture from an idea to a fully functioning firm. These advisers may have no connection to the firm and members of the new venture team may not be paid by the company at all, this includes boards of directors, boards of advisers and external professionals and experts. The new venture team is of utmost importance in determining the future of the firm thus the skills and knowledge of the individuals as well as their ability to connect as a team may be the main success of failure factor. The primary participants include a broad range of additional personnel to the original founder(s) as graphically represented below in figure 1.
₄
Figure [ 1 ]. Diagram of a new venture team participation.
For Specsavers, who placed great emphasis on the talent and ability of their team, was an example of individual passion from the founders. Mary had driven herself into the middle of a male dominated market with huge success with help from her husband. Her involvement subsequently raised the involvement of many more women evident within their headquarters and total company with the greater proportion of women in the workforce. Arguably more importantly, the success of the company was driven by the skills, knowledge and abilities of the new venture team. The treatment of the invaluable members of the firm not only motivated them to push the firm forward for personal gain but encouraged the sense of family, passively raising employee loyalty. This allowed them to invest in their team and nurture any talent which in turn could be reaped by the enterprise. This is evident with the promotion of training opportunities for all staff and even one day courses for board members to improve their expertise, with the majority accepting it raised day to day morale and stimulated them to work harder (77%).

b) What is liability of newness? What can a new-venture team do to overcome the liability of newness? Was it an issue for Specsavers?

The liability of newness is by definition the qualities of detriment that provoke risk, intrinsic to a company just starting up. It is well summarised by the author of its original use Arthur Stinchcombe, Stinchcombe's implicit characterisation of the liability of newness is that ‘new organisations face a constellation of problems associated with their newly founded status which renders them particularly prone to failure’₅. This high propensity to fail is induced, in general, from the firm’s inability to adjust efficiently and promptly to new roles and consequent requirements. As well as a lack of knowledge and contacts of and in the market.

The solution to such risk can be overcome in a variety of methods depending upon the specific cause of liability. Newness in itself is unavoidable however being new suggests particular barriers: i. A lack of knowledge * The solution lies is filling in the gaps, in this case gaining knowledge of the market, product or audience or finding someone who does i.e. hiring experts of that field. This encourages the formation of a talented and experienced new venture team which will overcome such newness. It could also be reduced by having previous experience in the industry which leads on to; ii. Lack of/difficulty to acquire, contacts * By having been in the industry you have trusted contacts for supply or possible clients as well as a relationship which could financially benefit you without economies of scale. In addition, competing in or involving oneself in well-known new venture events where big names will be participating and accolades available, promoting the company name, entrepreneur and priceless advertising to the point relevant and interest parties approach you. iii. Organisational culture and human capital training * To prevent the team being unprepared/unequipped for consistent and drastic changes, training and encouraging learning in their fields’ will improve the teams’ individual and joint ability to cope with a more diverse change of events. All the while staying on top of all the variations in company stature due to organisation. For Specsavers just like any start-up, it was an issue. However, was minimised due to Marys’ efforts and general pre-requisite to the company. The lack of knowledge was not so much of an issue when both Mary and Douglas had worked in the optometry markets before and Mary had even run a similar company from a young age. When their knowledge was not substantial, they were quick to hire experts and avoid as many hurdles as possible. Furthermore, the previous experience of the two and Mary’s own father resulted in an already existing extensive contact list, with people they had previous experience with and/or trusted. Lastly, the emphasis placed on talent, innovation and the working team created a family like culture where human capital was rewarded and trained regularly not only ensuring sufficient knowledge to improve personal expertise and overcome unpredicted change but also motivate them to want the company to do well.

References
(3) www.businessdictionary.com
(4) A primer in Entrepreneurship - Prof. Dr. Ulrich Kaiser
University of ZurichFall
(5) www.blackwellreference.com
(6) Maranville, S (1992), Entrepreneurship in the Business Curriculum, Journal of Education for Business, Vol. 68 No. 1, pp.27-31. www.en.wikipedia.org www.moodle.ucl.ac.uk - Specsavers Case Study Lecture slides MSIN7007B