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CIBA VISION : THE DAILYDISOSABLE LENS PROJECTPRODUCT MANAGEMENT CASESTUDY -2PRESENTED BY GROUP-ADITYA M. KARWANAGESH KONDA...
MAJOR PLAYER IN CONTACTLENS MARKET
CASE FACTSON AUGUST 2, 1992, TOP MANAGEMENTMEETING AT CORPORATE HEDQUARTER“BALUCH”MAJOR AND RAGED DISCUSSION ABOUTPROPOSED...
SOME PEOPLE CONSIDERED HUGEPOTENTIALAS IT OFFERS MANY CONSUMER BENEFITSAND HASTLEFREE USSAGEMAJOR QUESTION WAS??WILL IT BE...
PRODUCT IDEA WAS ACCEPTED UNIVERSALLYIN ORGANIZATION, FROM R & D TOMARKETINGSOME PEOPLE WANTED TO CONDUCT AEXTENSIVE MARKE...
RICAHARD FRANCIS,MARKETING HEAD,US. SAID-OUR CORE COMPETENCY IS DIFFRENCIATION“IN THIS SEGMENT WE NEED TO FIGHT ONCOST AND...
MAJOR CHALLENGES/ PROBLEMS IN CASE-• LACK TECHNOLOGY UPGRADATION AT R & D• LACK OF NECESSORY COMPETENCIES• LACK OF COMMITM...
FINAL DECISION TO TAKEON ALL THE QUESTION’SON THE SAME DAY!!
COMPANY INDUSTRY BACKGROUND-SUBSIDARY OF CIBA GEIGY ESTB. 19801994 SALE WAS 22 BILLIONUNDER LICENSING AGREEMENT WITHGERMAN...
INDUSTRY AND COMPETITORS8 COMPANIES DOMINATED MARKET• COMBINED BY REVENUE 75%• BAUCH AND LAUMB- 18%• J & J 16%• CIBA VISIO...
CIBA COMPANY DETAILS-• LOCATION- HEADQUARTER –BULACH• LARGEST R AND D ATLANTA• SMALLER UNITS- GERMANY• CONTACT LENSE SOLUT...
LENS MARKET TRENDS-• INNOVATION• HIGH TECHNOLOGY INVOLVED• CIBA WERE HAVING 20 LINES OF PRODCUTS• 2LACK SKU GIVING MAJOR S...
MAJOR PRODUCT IN MARKET LASTLY-7-DAY DISPOSABLE LENSIT CAN BE WORN CONTINEOUSLY FOR 7DAYSAND DISCARDEDBEFORE LAUNCHING THI...
BUYING BEHAVIOUR
CIBA VISION LAUNCHED THEIR PRODUCT IN1988 “ACUVE” IN SAME CATEGORYCIBA VISION STRUGGLED AT INITIAL LEVEL ATPRODUCTION DUE ...
PROBLEMS IN PROJECT-• CONFLICT IN R & D AND PRODUCTION TEAMS• RESOURCE SCARCITY• CHANGING TEAMS• TOO MUCH OVERLOAD• TOO MA...
• CEO WAS FRUSTETED DONE INVESTMENT IN NEWPLANT AT INDONESIA DUE TO CERTAN ADVANTAGES• MORE PROBLEMS AT GERMANY PLANT COST...
PRODUCT DEVELOPMENTDIFFRENTIATION STRATEGY OF CIBA- VISION WASGETTING AFFECTEDDEVELOPMENT OF MANY PROJECTS WERE STALLEDLON...
FIRST SOFT LENS IN 20YEARS IT WAS VERY HIGHQUALITY PRODUCT , HIGH EXPECTATIONS FROM ITAFTER CLINICAL TRIALSBIG FALIURE IN ...
LATER PULLED OUT FROM THE MARKETTHE COST WHICH WAS DECIDED TO BE $5/LENSIT CAME TO AROUND$15/LENSONE YEAR MORE IN R & D ST...
IT WAS REAL EYE OPENER FOR CO AS 20 R & D PROJECTWERE WORKING ON INCREMENTAL REFINEMENTS OFEXISTING PRODUCTS IN MARKETWHIC...
IT WAS A VERY AMBITIOUS PROJECT AND HAD MANYADVANTAGES FOR USER CONVINIENCEUSER DON’T NEED TO REOMOVE IN THE NIGHT BEFORES...
IT WOULD BE DONE BY COLLABORATING WITH CIBAGIEGY CENTRAL RESEARCH IN ,BASEL “AND CRCER” ONEOF THE MOST LEADING CONTACT LEN...
THE DAILY DISPOSABLEPROJECT PROPOSAL
CHALLENGES-• FINACIAL ASPECT IT INVOLVED HUGE INVESTMENT• CHANGING PERCEPTION ABOUT DISPOSABILITY• CONVINCING INTERNAL TEA...
• TECHNICAL ASPECTS MAKING IT AT LOWEST COSTNO MORE THA $0.20/LENS CANNOT BE SOLD MORETHAN $0.30/LENS• J $J WAS PODUCING 7...
PROPOSALS GIVENA.CREATING A AUTONOMOUS PROJECT TEAM UNDERONE LEADER AND TAKING EXTERNAL SUPPORT ANDTHEIR PACKAGES WILL BE ...
ARGUMENTS BY EXECUTIVE MEMBERSNO POINT IN SETTING UP A NEW SAPEARTE PROJECTTEAM LIKE ANOTHER COMPANY WHICH WILL REPORTTO O...
RECOMMENDATION’SSET UP SAPERATE CROSSFUNCTIONAL PROJECT TEAMUNDER ONE PROJECT MANAGER WHICH WILL REPORTDIRECTLY TO CEO AND...
GERMANY IS NOT RECOMMENDED AS COST IN 3PERCENT HIGH AND INVESTMENT WILL BE MUCHHIGHER PROFITS WILL BE REDUCEDCOST OF PRODU...
NEED TO WORK ON IT VERY FAST WITH EXTERNAL ANDINTERNAL SUPPORT NEED TO DEVELOP IT BEFORE J & JAS REGISTERING IT WILL GIVE ...
CIBA’S DAILY DISPOSABLE LENS IN MARKET
FEEDBACK….WRITE US TO ON …Aditya.karwa@ubs.org.inNagesh.kondalwade@ubs.org.inTHANK YOU….
Product management case study ciba vision
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Transcript of "Product management case study ciba vision"

  1. 1. CIBA VISION : THE DAILYDISOSABLE LENS PROJECTPRODUCT MANAGEMENT CASESTUDY -2PRESENTED BY GROUP-ADITYA M. KARWANAGESH KONDALWADEANUJ SHANDILYAMANISH PRASAD
  2. 2. MAJOR PLAYER IN CONTACTLENS MARKET
  3. 3. CASE FACTSON AUGUST 2, 1992, TOP MANAGEMENTMEETING AT CORPORATE HEDQUARTER“BALUCH”MAJOR AND RAGED DISCUSSION ABOUTPROPOSED PRJECT TO DEVELOP“DAILY DISPOSABLE “CONTACT LENSMANI COMPETITOR AND CIBA WEREOFFERING A SAME PRODUCT NOW 7 DAYDISPOSABLE
  4. 4. SOME PEOPLE CONSIDERED HUGEPOTENTIALAS IT OFFERS MANY CONSUMER BENEFITSAND HASTLEFREE USSAGEMAJOR QUESTION WAS??WILL IT BE CIBA OR COMPETITION TAKELEAD???
  5. 5. PRODUCT IDEA WAS ACCEPTED UNIVERSALLYIN ORGANIZATION, FROM R & D TOMARKETINGSOME PEOPLE WANTED TO CONDUCT AEXTENSIVE MARKET RESARCH BEFORELAUNCHINGSOME PEOPLE WERE HAVING DOUBT ONCOMPANY’S CAPABILITY TO COMPETE INTHIS SEGMENT
  6. 6. RICAHARD FRANCIS,MARKETING HEAD,US. SAID-OUR CORE COMPETENCY IS DIFFRENCIATION“IN THIS SEGMENT WE NEED TO FIGHT ONCOST AND WE WILL NOT BE ABLE COMPETEWITH J & J ON HIGH VOLUME “
  7. 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 CREATEISOLATED TEAM FOR PROJECT• DOMINANT MARKET SHARE ERODED BY J & J• CONVETIONAL MARKET SEGMENT’S WEREERODING
  8. 8. FINAL DECISION TO TAKEON ALL THE QUESTION’SON THE SAME DAY!!
  9. 9. COMPANY INDUSTRY BACKGROUND-SUBSIDARY OF CIBA GEIGY ESTB. 19801994 SALE WAS 22 BILLIONUNDER LICENSING AGREEMENT WITHGERMAN CO. TITMUS EUROCONTHEN SERIES OF ACQUISITION IN USAND ALL OVER THE WORLD MARKETSHARE GLOBALLY WAS 15%
  10. 10. INDUSTRY AND COMPETITORS8 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 SHAREWITH 85% MARKET SHARE
  11. 11. 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 ANDDOMESTIC SUPPLIER WITH DOMESTIC MARKETING TEAM
  12. 12. 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 LINESAND 1000 SKU• HIGH TECHNOLOGY AND QUALITY MATTEREDAND RECCOMENDATION BY SPECIALISTDOCTORES
  13. 13. MAJOR PRODUCT IN MARKET LASTLY-7-DAY DISPOSABLE LENSIT CAN BE WORN CONTINEOUSLY FOR 7DAYSAND DISCARDEDBEFORE LAUNCHING THIS GREAT R & D WORKTOOK PLACE AND J & J PATENDED PROCESS TO ITAT LOW COST
  14. 14. BUYING BEHAVIOUR
  15. 15. CIBA VISION LAUNCHED THEIR PRODUCT IN1988 “ACUVE” IN SAME CATEGORYCIBA VISION STRUGGLED AT INITIAL LEVEL ATPRODUCTION DUE TO EXCLUSIVE CONTRACT OFJ AND JLATER THIS SEGMENT WAS GOING FOR PRICEWARCIBA VISION TO REDUCE PRODUCTION COSTSTARTED A PROJECT GODZILLA
  16. 16. 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 GROUNDREALITY• IN 3 YEARS TALKS AND TALKS NO RESULT
  17. 17. • CEO WAS FRUSTETED DONE INVESTMENT IN NEWPLANT AT INDONESIA DUE TO CERTAN ADVANTAGES• MORE PROBLEMS AT GERMANY PLANT COST OFPRODUCTION WAS THRICE THAN ATLANTA• ANALYSIS SHOWED TO TRANSFER MANUFACTURINGOF PRODUCTS TO ATLANTA AND IN INDONESIS
  18. 18. PRODUCT DEVELOPMENTDIFFRENTIATION STRATEGY OF CIBA- VISION WASGETTING AFFECTEDDEVELOPMENT OF MANY PROJECTS WERE STALLEDLONG TERM CONCERNS AS COMPANY WAS LOOSINGTHEIR INNOVATIVE EDGETWO INTERNAL REVIEWS WERE CONDUCTED ON NEWPRODUCT LAUNCH PROCESS OF NEW PRODUCT“EXCELENS”
  19. 19. FIRST SOFT LENS IN 20YEARS IT WAS VERY HIGHQUALITY PRODUCT , HIGH EXPECTATIONS FROM ITAFTER CLINICAL TRIALSBIG FALIURE IN FACTORY 0% YIELDFACTORY WAS UNABLE TO REPLICATE R & DPROCESS DUE TO 0% INTEGRATION BETWEEN 2DEPARTMENTS
  20. 20. LATER PULLED OUT FROM THE MARKETTHE COST WHICH WAS DECIDED TO BE $5/LENSIT CAME TO AROUND$15/LENSONE YEAR MORE IN R & D STILL LOW YIELD AND COSTWAS HIGH SO IN 1992 EACH EXELENS SOLDCONTRIBUTED –VETOWARDS MARGINS
  21. 21. IT WAS REAL EYE OPENER FOR CO AS 20 R & D PROJECTWERE WORKING ON INCREMENTAL REFINEMENTS OFEXISTING PRODUCTS IN MARKETWHICH WERE BASICLY ME2 PRODUCTSADVANCED DEVELOPMENT INITIATIVESTHE EXTENDED WEAR PROJECT
  22. 22. IT WAS A VERY AMBITIOUS PROJECT AND HAD MANYADVANTAGES FOR USER CONVINIENCEUSER DON’T NEED TO REOMOVE IN THE NIGHT BEFORESLEEPING, HE CAN WEAR IT FOR SEVERAL WEEKSIN SENIOR MANAGEMENT MEETING AT BULACHUNIVERSALLY AGREED TO CARRY OUT THE PROJECTCONSIDERING EARLIER FAILED ATTEMPTS SPECIAL TEAMWAS APPOINTED BUDGET WAS $5MILLION FOR 2 YEARSIF VIABLE THEN BUDGET WOULD ESCALATE DRATICALLY
  23. 23. IT WOULD BE DONE BY COLLABORATING WITH CIBAGIEGY CENTRAL RESEARCH IN ,BASEL “AND CRCER” ONEOF THE MOST LEADING CONTACT LENS RESEARCH FIRMIN AUSTRALIAFIRST TIM EIN THE HISTORY OF CIBA- VISION ENTIRERESPONSIBILITY OF PROJECT WAS GIVEN TO ONE MANIT WAS GIVEN TO MR. NICK LEONARD THAT WAS WINOR LOSEGAME FOR HIM
  24. 24. THE DAILY DISPOSABLEPROJECT PROPOSAL
  25. 25. CHALLENGES-• FINACIAL ASPECT IT INVOLVED HUGE INVESTMENT• CHANGING PERCEPTION ABOUT DISPOSABILITY• CONVINCING INTERNAL TEAM TO GET FULLCOMMITMENT• ISSUE OF CANNIBALIZATION – 50% REVENUE FROMCIBA VISION LENS CARE SOLUTION WILL BE EATENUP
  26. 26. • TECHNICAL ASPECTS MAKING IT AT LOWEST COSTNO MORE THA $0.20/LENS CANNOT BE SOLD MORETHAN $0.30/LENS• J $J WAS PODUCING 7 DAY DISPOSABLE AT 0.85$• TO DEVELOP ENTIRELY NEW BREAKTHROUGHPROCESS• BIGGEST IS COMPETITOR’S THREAT J AND J MAYCOME UP WITH THIS PRODUCT• SO HAVE TO DEVELOP BEFORE THEM• AS HUGE FIRST MOVER ADVANTAGE IS THEIR• AS USERS AND DOCTORS DON’T SWITCH THEIRBRANDS UNLESS THERE IS PROBLEM
  27. 27. PROPOSALS GIVENA.CREATING A AUTONOMOUS PROJECT TEAM UNDERONE LEADER AND TAKING EXTERNAL SUPPORT ANDTHEIR PACKAGES WILL BE TIED UP WITH SUCCES OF THEPROJECT2ND WAS LOCATING A TEAM IN GERMANY TO AVOIDINFLUENCE OF R AND D TEAM IN ATLANTA THIS WAY“DDL” TEAM WILL BE PHYSICALLY ANDORGANIZATIONALLY SAPERATE
  28. 28. ARGUMENTS BY EXECUTIVE MEMBERSNO POINT IN SETTING UP A NEW SAPEARTE PROJECTTEAM LIKE ANOTHER COMPANY WHICH WILL REPORTTO ONE PERSON ONLY WE HAVE NOT DONE IT BEFORENO POINT IN SETTING UP A PLANT IN GERMANY ASGERMANY IS 3 TIME COSTLIER THAN ATLANTA ANDTARGET MARKET IS IN USA
  29. 29. RECOMMENDATION’SSET UP SAPERATE CROSSFUNCTIONAL PROJECT TEAMUNDER ONE PROJECT MANAGER WHICH WILL REPORTDIRECTLY TO CEO AND GIVE THEM EXTERNALTECHNICAL SUPPORTSET UP PLANT IN ATLANTA ONLY BUT COMPLETELYDIFFERENT TEAM OF R AND D SCIENTIST’S THEY WILLBE 101% COMMITED TO THIS PROJECT NO SHUFFLINGSAPERATE RESOURCES FOR THIS PROJECT
  30. 30. GERMANY IS NOT RECOMMENDED AS COST IN 3PERCENT HIGH AND INVESTMENT WILL BE MUCHHIGHER PROFITS WILL BE REDUCEDCOST OF PRODUCTION IN $3.23 ATLANTA $ 7.32 INGERMANY
  31. 31. NEED TO WORK ON IT VERY FAST WITH EXTERNAL ANDINTERNAL SUPPORT NEED TO DEVELOP IT BEFORE J & JAS REGISTERING IT WILL GIVE EXCLUSIVE RIGHT TOCIBA VISIONWHILE LAUNCHING INTRODUCING THE PRODUCT WITHEXTENSIVE MARKETING CAMPAIGN SHOWINGCONVINIENCE AS BENEFIT FOR CERONSU
  32. 32. CIBA’S DAILY DISPOSABLE LENS IN MARKET
  33. 33. FEEDBACK….WRITE US TO ON …Aditya.karwa@ubs.org.inNagesh.kondalwade@ubs.org.inTHANK YOU….
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