PRODUCT MANAGEMENT

CASE STUDY -2
CIBA VISION : THE DAILY
DISOSABLE LENS PROJECT
PRESENTED BY GROUPADITYA M. KARWA
NAGESH KONDALWADE
ANUJ SHANDILYA
MANISH PRASAD

MAJOR PLAYER IN
CONTACT LENS MARKET

CASE FACTS
ON AUGUST 2, 1992, TOP
MANAGEMENT MEETING AT
CORPORATE HEDQUARTER
BALUCH
MAJOR AND RAGED DISCUSSION
ABOUT PROPOSED PRJECT TO
DEVELOP
DAILY DISPOSABLE CONTACT LENS
MANI COMPETITOR AND CIBA WERE
OFFERING A SAME PRODUCT NOW 7
DAY DISPOSABLE

SOME PEOPLE CONSIDERED HUGE

POTENTIAL
AS IT OFFERS MANY CONSUMER
BENEFITS AND HASTLEFREE
USSAGE
MAJOR QUESTION WAS??
WILL IT BE CIBA OR COMPETITION
TAKE LEAD???

PRODUCT IDEA WAS ACCEPTED

UNIVERSALLY IN ORGANIZATION,
FROM R & D TO MARKETING
SOME PEOPLE WANTED TO
CONDUCT A EXTENSIVE MARKET
RESARCH BEFORE LAUNCHING
SOME PEOPLE WERE HAVING DOUBT
ON COMPANYS CAPABILITY TO
COMPETE IN THIS SEGMENT

RICAHARD FRANCIS,
MARKETING HEAD,US. SAID-

OUR CORE COMPETENCY IS

DIFFRENCIATION
IN THIS SEGMENT WE NEED TO
FIGHT ON COST AND WE WILL NOT
BE ABLE COMPETE WITH J & J ON
HIGH VOLUME

MAJOR CHALLENGES/ PROBLEMS

IN CASE LACK TECHNOLOGY UPGRADATION AT
R&D
LACK OF NECESSORY COMPETENCIES
LACK OF COMMITMENT FOR THE IDEA
CONFLICT ON - PROPOSAL TO
CREATE ISOLATED TEAM FOR
PROJECT
DOMINANT MARKET SHARE ERODED
BY J & J
CONVETIONAL MARKET SEGMENTS

FINAL DECISION TO
TAKE ON ALL THE
QUESTIONS
ON THE SAME DAY!!

COMPANY INDUSTRY
BACKGROUNDSUBSIDARY OF CIBA GEIGY ESTB. 1980
1994 SALE WAS 22 BILLION

UNDER LICENSING AGREEMENT WITH

GERMAN CO. TITMUS EUROCON

THEN SERIES OF ACQUISITION IN US

AND ALL OVER THE WORLD MARKET
SHARE GLOBALLY WAS 15%

INDUSTRY AND COMPETITORS

8 COMPANIES DOMINATED MARKET

COMBINED BY REVENUE 75%
BAUCH AND LAUMB- 18%
J & J 16%
CIBA VISION- 15%
MENICON- 8%
NOTE- J & J DOMINATED HIGH VOLUME
SHARE WITH 85% MARKET SHARE

CIBA COMPANY DETAILS-

LOCATION- HEADQUARTER BULACH

LARGEST R AND D ATLANTA
SMALLER UNITS- GERMANY
CONTACT LENSE SOLUTION PLANT- CANADA,
GERMANY,ENGLAND
EVERY PLANT WERE PLAYING THE ROLE OF
GLOBAL AND DOMESTIC SUPPLIER WITH DOMESTIC
MARKETING TEAM

LENS MARKET TRENDS

INNOVATION
HIGH TECHNOLOGY INVOLVED
CIBA WERE HAVING 20 LINES OF
PRODCUTS
2LACK SKU GIVING MAJOR SALES
J AND J WERE OFEERING 2 PRODUCT
LINES AND 1000 SKU
HIGH TECHNOLOGY AND QUALITY
MATTERED AND RECCOMENDATION
BY SPECIALIST DOCTORES

MAJOR PRODUCT IN MARKET

LASTLY7-DAY DISPOSABLE LENS
IT CAN BE WORN CONTINEOUSLY FOR
7DAYS AND DISCARDED
BEFORE LAUNCHING THIS GREAT R & D
WORK TOOK PLACE AND J & J
PATENDED PROCESS TO IT AT LOW
COST

BUYING BEHAVIOUR

CIBA VISION LAUNCHED THEIR

PRODUCT IN 1988 ACUVE IN
SAME CATEGORY
CIBA VISION STRUGGLED AT INITIAL
LEVEL AT PRODUCTION DUE TO
EXCLUSIVE CONTRACT OF J AND J
LATER THIS SEGMENT WAS GOING
FOR PRICE WAR
CIBA VISION TO REDUCE
PRODUCTION COST STARTED A
PROJECT GODZILLA

PROBLEMS IN PROJECTCONFLICT IN R & D AND

PRODUCTION TEAMS
RESOURCE SCARCITY
CHANGING TEAMS
TOO MUCH OVERLOAD
TOO MANY PROJECT AT THE SAME
TIME
RESEARCH CHEMIST AWAY FROM
GROUND REALITY
IN 3 YEARS TALKS AND TALKS NO

 CEO WAS FRUSTETED DONE

INVESTMENT IN NEW PLANT AT
INDONESIA DUE TO CERTAN
ADVANTAGES
MORE PROBLEMS AT GERMANY PLANT
COST OF PRODUCTION WAS THRICE
THAN ATLANTA
ANALYSIS SHOWED TO TRANSFER
MANUFACTURING OF PRODUCTS TO
ATLANTA AND IN INDONESIS

PRODUCT DEVELOPMENT
DIFFRENTIATION STRATEGY OF CIBA- VISION
WAS GETTING AFFECTED
DEVELOPMENT OF MANY PROJECTS WERE
STALLED
LONG TERM CONCERNS AS COMPANY WAS
LOOSING THEIR INNOVATIVE EDGE
TWO INTERNAL REVIEWS WERE CONDUCTED
ON NEW PRODUCT LAUNCH PROCESS OF
NEW PRODUCT EXCELENS

FIRST SOFT LENS IN 20YEARS IT WAS VERY

HIGH QUALITY PRODUCT , HIGH
EXPECTATIONS FROM IT AFTER CLINICAL
TRIALS

BIG

FALIURE IN FACTORY
0% YIELD

FACTORY WAS UNABLE TO REPLICATE R

& D PROCESS DUE TO 0%
INTEGRATION BETWEEN 2
DEPARTMENTS

LATER PULLED OUT FROM THE

MARKET
THE COST WHICH WAS DECIDED TO BE
$5/LENS
IT CAME TO AROUND

$15/LENS
ONE YEAR MORE IN R & D STILL LOW YIELD
AND COST WAS HIGH SO IN 1992 EACH
EXELENS SOLD CONTRIBUTED
TOWARDS MARGINS

VE

IT WAS REAL EYE OPENER FOR CO AS 20 R &

D PROJECT WERE WORKING ON
INCREMENTAL REFINEMENTS OF EXISTING
PRODUCTS IN MARKET

WHICH WERE BASICLY

PRODUCTS

ME2

ADVANCED DEVELOPMENT
INITIATIVES
THE EXTENDED WEAR PROJECT

IT WAS A VERY AMBITIOUS PROJECT AND HAD

MANY ADVANTAGES FOR USER CONVINIENCE
USER DONT NEED TO REOMOVE IN THE
NIGHT BEFORE SLEEPING, HE CAN WEAR IT
FOR SEVERAL WEEKS
IN SENIOR MANAGEMENT MEETING AT
BULACH UNIVERSALLY AGREED TO CARRY
OUT THE PROJECT
CONSIDERING EARLIER FAILED ATTEMPTS
SPECIAL TEAM WAS APPOINTED BUDGET WAS
$5MILLION FOR 2 YEARS
IF VIABLE THEN BUDGET WOULD ESCALATE
DRATICALLY

IT WOULD BE DONE BY COLLABORATING

WITH CIBA GIEGY CENTRAL RESEARCH IN
,BASEL AND CRCER ONE OF THE MOST
LEADING CONTACT LENS RESEARCH FIRM IN
AUSTRALIA
FIRST TIM EIN THE HISTORY OF CIBA- VISION
ENTIRE RESPONSIBILITY OF PROJECT WAS
GIVEN TO ONE MAN
IT WAS GIVEN TO MR. NICK LEONARD THAT
WAS

WIN OR LOSE GAME FOR HIM

THE DAILY
DISPOSABLE

CHALLENGES-

FINACIAL ASPECT IT INVOLVED HUGE

INVESTMENT
CHANGING PERCEPTION ABOUT
DISPOSABILITY
CONVINCING INTERNAL TEAM TO GET
FULL COMMITMENT
ISSUE OF CANNIBALIZATION 50%
REVENUE FROM CIBA VISION LENS
CARE SOLUTION WILL BE EATEN UP

 TECHNICAL ASPECTS MAKING IT AT

LOWEST COST
NO MORE THA $0.20/LENS CANNOT BE
SOLD MORE THAN $0.30/LENS
J $J WAS PODUCING 7 DAY DISPOSABLE
AT 0.85$
TO DEVELOP ENTIRELY NEW
BREAKTHROUGH PROCESS
BIGGEST IS COMPETITORS THREAT J
AND J MAY COME UP WITH THIS
PRODUCT
SO HAVE TO DEVELOP BEFORE THEM
AS HUGE FIRST MOVER ADVANTAGE IS
THEIR

PROPOSALS GIVEN
A.CREATING A AUTONOMOUS PROJECT TEAM
UNDER ONE LEADER AND TAKING EXTERNAL
SUPPORT AND THEIR PACKAGES WILL BE TIED
UP WITH SUCCES OF THE PROJECT
2ND WAS LOCATING A TEAM IN GERMANY TO
AVOID INFLUENCE OF R AND D TEAM IN
ATLANTA THIS WAY DDL TEAM WILL BE
PHYSICALLY AND ORGANIZATIONALLY
SAPERATE

ARGUMENTS BY EXECUTIVE MEMBERS

NO POINT IN SETTING UP A NEW SAPEARTE

PROJECT TEAM LIKE ANOTHER COMPANY
WHICH WILL REPORT TO ONE PERSON ONLY
WE HAVE NOT DONE IT BEFORE
NO POINT IN SETTING UP A PLANT IN
GERMANY AS GERMANY IS 3 TIME COSTLIER
THAN ATLANTA AND TARGET MARKET IS IN
USA

RECOMMENDATIONS
SET UP SAPERATE CROSSFUNCTIONAL
PROJECT TEAM
UNDER ONE PROJECT MANAGER WHICH
WILL REPORT DIRECTLY TO CEO AND
GIVE THEM EXTERNAL TECHNICAL
SUPPORT
SET UP PLANT
IN ATLANTA ONLY BUT
COMPLETELY DIFFERENT TEAM OF R AND
D SCIENTISTS THEY WILL BE 101%
COMMITED TO THIS PROJECT NO
SAPERATE SHUFFLING
RESOURCES FOR THIS
PROJECT

GERMANY IS NOT RECOMMENDED AS

COST IN 3 PERCENT HIGH AND
INVESTMENT WILL BE MUCH HIGHER
PROFITS WILL BE REDUCED

COST OF PRODUCTION IN $3.23 ATLANTA

$ 7.32 IN GERMANY

NEED TO WORK ON IT VERY FAST WITH

EXTERNAL AND INTERNAL SUPPORT
NEED TO DEVELOP IT BEFORE J & J AS
REGISTERING IT WILL GIVE EXCLUSIVE
RIGHT TO CIBA VISION

WHILE LAUNCHING INTRODUCING THE

PRODUCT WITH EXTENSIVE MARKETING
CAMPAIGN SHOWING CONVINIENCE AS
BENEFIT FOR CERONSU

CIBAS DAILY DISPOSABLE LENS IN

MARKET

FEEDBACK.
WRITE US TO ON
Aditya.karwa@ubs.org.in
Nagesh.kondalwade@ubs.org.in

THANK YOU.