Product Management CASE STUDY

1. CIBA VISION : THE DAILY
DISOSABLE LENS PROJECT
PRODUCT MANAGEMENT CASE
STUDY -2
PRESENTED BY GROUP-
ADITYA M. KARWA
NAGESH KONDALWADE
ANUJ SHANDILYA
MANISH PRASAD

2. MAJOR PLAYER IN CONTACT
LENS MARKET

3. 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

4. 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???

5. 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
COMPANY’S CAPABILITY TO COMPETE IN
THIS SEGMENT

6. 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 “

7. 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 SEGMENT’S WERE
ERODING

8. FINAL DECISION TO TAKE
ON ALL THE QUESTION’S
ON THE SAME DAY!!

9. COMPANY INDUSTRY BACKGROUND-
SUBSIDARY 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%

11. 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

12. 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

13. 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

14. MAJOR PRODUCT IN MARKET LASTLY-
7-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

15. BUYING BEHAVIOUR

16. 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

17. PROBLEMS IN PROJECT-
• CONFLICT 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 RESULT

18. • 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

19. 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”

20. 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

21. 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 –VETOWARDS MARGINS

22. 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 ME2 PRODUCTS
ADVANCED DEVELOPMENT INITIATIVES
THE EXTENDED WEAR PROJECT

23. IT WAS A VERY AMBITIOUS PROJECT AND HAD MANY
ADVANTAGES FOR USER CONVINIENCE
USER DON’T 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

24. 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 LOSEGAME FOR HIM

25. THE DAILY DISPOSABLE
PROJECT PROPOSAL

26. 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

27. • 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 COMPETITOR’S THREAT J AND J MAY
COME UP WITH THIS PRODUCT
• SO HAVE TO DEVELOP BEFORE THEM
• AS HUGE FIRST MOVER ADVANTAGE IS THEIR
• AS USERS AND DOCTORS DON’T SWITCH THEIR
BRANDS UNLESS THERE IS PROBLEM

28. 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

29. 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

30. RECOMMENDATION’S
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 SCIENTIST’S THEY WILL
BE 101% COMMITED TO THIS PROJECT NO SHUFFLING
SAPERATE RESOURCES FOR THIS PROJECT

31. 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

32. 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

33. CIBA’S DAILY DISPOSABLE LENS IN MARKET

34. FEEDBACK….
WRITE US TO ON …
Aditya.karwa@ubs.org.in
Nagesh.kondalwade@ubs.org.in
THANK YOU….