Vistakon is a well-established market leader in the disposable contact lens industry. It is a subsidiary of Johnson and Johnson and has grown from a specialty manufacturer in 1987 with $20 million annual sales to a market leader in the contact lens industry in 1993 with over $250 million sales. It offers a variety of disposable contact lenses ranging from a disposable time of two weeks, one week and now with 1-Day Acuvue, one day. The idea of 1-Day Acuvue came about because there was a lot of hassle associated with long term lenses, including enzyme build up and cleaning. Although the development of one week and two week disposable lenses also had the same ideology behind their development, 1-Day Acuvue was different as it did not require any storage at all or contact solutions and represented maximum convenience in terms of contact lenses. There are of course potential problems in the launch of this product that can be avoided by mapping out the buying process of the lenses. We are able to analyze all potential channels a customer comes in contact with and which ones could influence their decision positively or negatively. Once we are able to remove the potential hurdles from one channel to another, we will be able to have a successful launch. We will look at pricing, promotion and influencing ECPs to be on board with our product as ways for these hurdles to be minimized and removed. We refer to our test market launches as they are crucial in helping us decide so many imperative issues before we decide to launch our product on a larger scale. PEST Analysis
After doing the PEST analysis, the trends noticed are the popularity of soft contact lenses with around 73% of contact lenses users opting for soft lenses as compared to the hard ones. The hard ones were cheaper and more uncomfortable but could correct some vision deficiencies that soft lenses could not. It was observed that people did not wear lenses because of the fear of lenses, unsuitability for some eye conditions, allergies and cost. Some people would use contacts for a little while and then stop using them. This was because of the following factors: discomfort, allergies, glasses were easier to use, loss of tears, bifocals and cost. Disposable lens were becoming popular although conventional lenses are still more popular in soft contact lenses users. Company
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...