Optical Distortion Harvard Business Case

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I. Executive summary:
A. Problem statement: Optical Distortion Inc.(ODI) is a small new company, not yet in business, with a patent for an innovative product designed to prevent chickens from cannibalism behaviors toward each other. These lenses are used instead of traditional way of debeaking. ODI must develop marketing strategies about targeting, positioning and optimal pricing to launch its new product.

B. Recommendation: The dilemma ODI faces is whether introduce its product at a higher price and continue process its multimarket strategy. Based on ODI limited resources and current situation of poultry industry in United States, ODI should target large farms have 50,000 chickens or over, and focus on the
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4) able to lower price as well as cost with high market power and high rate of market to compete with potential competitors.

D. Conclusions: ODI has sufficient evidence to target large farms have 50,000 chickens or over, and focus on market in California and south Atlantic region in the short term and set an initial high price of about $0.28 per pair. Although it may appear that ODI may have risk of introducing new products, this option is actually safest and most profitable for expected sales and penetration. Risk of reluctance to acceptance new technology, low trained salesforce and new competitors in the future may lead this strategy less efficient. It is suggested that ODI decrease the selling price of the lenses in the long term and focus on improving the quality and services and build a solid premium brand image in order to guarantee market share in the future. It would be better to find multiple ways of advertising and increasing the customers ' awareness and accessibility of products.

Appendix
Table 1: Farm size comparison

Table 2:
Savings calculation between debeaking and lenses

Reduce Cannibalism

Debeaking
ODI lenses
Cannibalism Rate
9%
4.5%
Purchase cost (per chicken)
$2.40
$2.40
Total cost
$0.216
$0.108
Savings (per chicken)

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