Case Study of Vistakon and Disposable Contact Lenses
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 Acuvue.
Competition
Vistakon's major competitors within the disposable contact lens market are Bausch & Lomb ("B&L") and Ciba. With a 23% and 21% share respectively in 1994, they led the soft contact lens market. In addition, both B&L and Ciba offered high margin cleaning solutions products for conventional lens. These competitors, therefore, were seen as being reluctant to immediately launch their own equivalent product of 1-Day Acuvue, which will undermine their highly profitable solutions business.
In launching their new product, Vistakon needs to predict two scenarios: competitors' "defensive" and "offensive" actions against the launch of 1-Day Acuvue. The "defensive" scenario anticipates significant price reduction and/or launching of aggressive marketing campaigns by these competitors once 1-Day Acuvue proves successful enough to cannibalize their sales. The "offensive" scenario is where the competitors will launch a similar product to the 1-Day Acuvue. As stated above, based on the potential to undermine their solutions business we anticipate that the probability of an "offensive" response is low for the time being.
Customer
Based on the result from the Western regional launch, we project the potential
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 Acuvue.
Competition
Vistakon's major competitors within the disposable contact lens market are Bausch & Lomb ("B&L") and Ciba. With a 23% and 21% share respectively in 1994, they led the soft contact lens market. In addition, both B&L and Ciba offered high margin cleaning solutions products for conventional lens. These competitors, therefore, were seen as being reluctant to immediately launch their own equivalent product of 1-Day Acuvue, which will undermine their highly profitable solutions business.
In launching their new product, Vistakon needs to predict two scenarios: competitors' "defensive" and "offensive" actions against the launch of 1-Day Acuvue. The "defensive" scenario anticipates significant price reduction and/or launching of aggressive marketing campaigns by these competitors once 1-Day Acuvue proves successful enough to cannibalize their sales. The "offensive" scenario is where the competitors will launch a similar product to the 1-Day Acuvue. As stated above, based on the potential to undermine their solutions business we anticipate that the probability of an "offensive" response is low for the time being.
Customer
Based on the result from the Western regional launch, we project the potential