Case Study of Vistakon and Disposable Contact Lenses

1413 WordsSep 9, 20066 Pages
Case Study of Vistakon and Disposable Contact Lenses Vistakon is a well-established, overwhelming market leader in the disposable contact lens industry, based on strong brand equity and channels of distribution. Additionally, as a subsidiary of Johnson and Johnson, Vistakon has considerable resources at its disposal. The launching of 1 Day Acuvue, with newly invested manufacturing technology in place, provides a great opportunity to preempt competition and thus enhance its positioning. However, 1 Day Acuvue potentially flourishes by cannibalizing the company's existing product lines such as Acuvue and Surevue. With a major portion of its sales ($250 million) coming from these products, Vistakon faces significant risk in launching 1 Day…show more content…
The Value proposition of 1-Day Acuvue In summary, we propose the value proposition of the product that "1 day Acuvue produces high "quality" comfortable and convenient disposable soft contact lenses for customers who are active, part time contact lens users. 1-Day Acuvue offers flexibility in use relative to the conventional contact lenses and eyeglasses, and quality relative to Bausch & Lomb and Ciba Vision products. Pricing From Exhibit 21 of the case, we can calculate the previous annual cost to the customers and the equivalent 1 Day Acuvue lens price to show the different magnitude of economics based on days of use in a week. (see Exhibit 3) Vistakon can consider multi tier pricing to exploit such opportunities. However, from the ECP's standpoint, based on the Western launch pricing strategy we find that they can potentially gain more contribution by selling disposables rather than 1-Day Acuvue. This shows that ECP is not fully incentivized to sell 1-Day Acuvue over disposables. Recommendation The following are the different options available for the 1-Day Acuvue: • Penetration / Low Price - This option puts them at risk for prisoners dilemma and cannibalization of current product lines with less profitability. Therefore, this is not a sensible option. In addition, lowering the
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