Whilst this is an older article, the issue of centralisation and decentralisation of management structures remain valid considerations for your exam.


Expansion within IC Optical (the May 2016 scenario) is driven by an ageing population across Ceeland, in the same way an ageing UK population increases demand on healthcare and social services.

All Ceeland citizens receive a free eye test every two years, for which the government pays a fixed fee currently set at C$100 for each test carried out. This in itself represents a risk for IC Optical, should there be pressure on government finances.

The fact that 65% of Ceeland’s population over the age of 16 wears glasses or contact lenses, I find rather surprising. The market is clearly large and attractive to new entrants (consider Porter’s Five Forces Analysis). Newspecs and their rapid expansion represents a threat to IC Optical, despite the benefits consumers receive from competition within a market.

In order to remain competitive and defend IC Optical’s position, cost savings could be realised from a centralisation or decentralisation strategy. Other issues potentially include offshoring or process automation.

I’ll save any other thoughts for the upcoming sessions.