Case Study: Optical Distortion Incorporation
Optical Distortion, Inc. HBS Case Study 9-575-072 Marketing Management MKT 6301.002 – Fall 2012 Team Members Young soo Han Kevin Yang Jay Chi Lenny Liao Brad Standridge
As of 1974 the chicken population in the US is already in excess of 400 million birds, with slow but steady growth expected through 1980. Given that fact that a great many of these birds live in tight quarters on very large chicken farms, a means of combating the chicken’s natural instinct to peck other chickens is needed. Pecking can actually lead to high mortality rates in flocks (cannibalization), which in turn raises the costs of farming. Debeaking has been used for some time with good results, but it has its own set of drawbacks. The lens developed by Optical Distortions, Inc. (ODI) holds the promise of reducing the threat caused by pecking, without some of the issues associated with debeaking. The specific advantages of these lenses will be discussed in the following report, as will a plan for marketing this new product.
By permanently inserting a pair of sight distorting lenses into the eyes of an egg-laying hen, studies have shown that cannibalization can be reduced from 9% to 4.5%. Moreover, feed loss due to “billing” is substantially reduced relative to debeaked birds, allowing for much greater efficiency in feed consumption (less waste). Finally, given that lens insertion does not inflict the same trauma that debeaking does, egg production is not adversely affected.
Given the above advantages, it is expected that farmers could increase their profit from egg sales by more than one-third (37%) simply by employing the use of the ODI lenses (Exhibit 1).
Although the potential impact of the ODI lenses is substantial, there are some important assumptions underlying the anticipated value to farmers. For example, one of the biggest financial gains could be in the reduction in feed waste, so the assumption that hens with lenses will “bill”
As of 1974 the chicken population in the US is already in excess of 400 million birds, with slow but steady growth expected through 1980. Given that fact that a great many of these birds live in tight quarters on very large chicken farms, a means of combating the chicken’s natural instinct to peck other chickens is needed. Pecking can actually lead to high mortality rates in flocks (cannibalization), which in turn raises the costs of farming. Debeaking has been used for some time with good results, but it has its own set of drawbacks. The lens developed by Optical Distortions, Inc. (ODI) holds the promise of reducing the threat caused by pecking, without some of the issues associated with debeaking. The specific advantages of these lenses will be discussed in the following report, as will a plan for marketing this new product.
By permanently inserting a pair of sight distorting lenses into the eyes of an egg-laying hen, studies have shown that cannibalization can be reduced from 9% to 4.5%. Moreover, feed loss due to “billing” is substantially reduced relative to debeaked birds, allowing for much greater efficiency in feed consumption (less waste). Finally, given that lens insertion does not inflict the same trauma that debeaking does, egg production is not adversely affected.
Given the above advantages, it is expected that farmers could increase their profit from egg sales by more than one-third (37%) simply by employing the use of the ODI lenses (Exhibit 1).
Although the potential impact of the ODI lenses is substantial, there are some important assumptions underlying the anticipated value to farmers. For example, one of the biggest financial gains could be in the reduction in feed waste, so the assumption that hens with lenses will “bill”