Optical Distortion Case

STRENGTHS AND WEAKNESSES:

ODI develops these lenses for chicken that can become a substitute for debeaking which is the current practice at the time because it reduces cannibalism to 9% but causes trauma and can therefore lead to a reduction of egg laying. On the other hand, the lenses reduce cannibalism to 4.5% and causes no trauma though they lenses cannot be reused. Also, the lenses may account for feed savings though farmers may be reluctant because it would require for them to replenish the trough more often.

THREATS AND OPPORTUNITIES:

Because there would be no trauma there would be savings on egg production as chickens would not spend a week not laying eggs as they recover from it. Some other advantages of the lenses include that come from a reliable supplier, it is exclusive technology and they have a 3-year patent. But this can also become a threat at some point as the technology is stolen or copied. Further, despite their lower price, the lenses can actually bring about higher mortality if inserted wrong. Some opportunities lie on the horizon, though. At the time there is no competition in the lenses market and there is a big growing market for large farms, especially in California since the trend is for there to be more farms over 100,000 chickens than smaller family-owned ones. Because smaller ones are family-owned they may be more reluctant to new technologies. This justifies ODI’s decision to enter the market region by region from California.

PRICING:

Now the matter becomes pricing. Should they go with the minimum price of 8 cents and provide farmers savings of up to 34 cents? Or should they go for the maximum price of 36 cents because of the related benefits yielding savings of only 6 cents to farmers? I believe the answer is none. There is a midpoint. Say ODI were to sell their product at 28 cents. This would still leave