Optical Distortion, Inc. Case Study

Situation Analysis

Problem Defined:  Optical Distortion, Inc. (ODI) has revolutionary technology that can provide economic value to chicken farmers.  What is the value to the customer and how should we price this product?

In 1965, ODI developed a contact lens to distort the vision of chickens and prevent cannibalism.  Fast forward a decade later to fall 1974 and ODI is poised to take the product to market.  By evaluating the strengths and weaknesses of ODI and aligning the contact lens’ benefits to consumer needs, we can identify target customers and build a marketing strategy to successfully launch a new product line in a niche market.  

Strengths & Weaknesses: Through  situation analysis, we were able to identify a number of strengths and weaknesses that ODI possesses.  Chief amongst all is the technology that ODI has created: a contact lens that distorts the vision of a chicken, leaving the bird partially blind. This results in a substantial reduction in cannibalism and more consistent egg-laying throughout the flock.  Field testing has proven ancillary effects including a chicken that readily eats from a trough with less feed, which reduces feed by up to 1” per day, resulting in total annual savings for a flock 20,000 of $4,498 (see Exhibit 1).  Moreover, this equates to an annual savings for larger farms of over $35,000 (Exhibit 1).  Not to mention, there is exponentially less trauma to the bird when compared to the current practice of debeaking.  The reduction in trauma ensures that the bird can return to normal within a few hours, minimizing any effects on weight or egg production.

ODI also has strong partnerships with industry professionals.  One of their strongest partnerships is with New World Plastics, a manufacturer of hydrophilic polymer solutions.  New World has agreed to a license that guarantees ODI exclusive rights to New World’s polymer products for non-human applications. This agreement allows ODI to secure their supply chain with a reliable manufacturer at a fixed rate and, coupled with patent and license protection, will likely “hold off competition for at least three years” (Clarke, ODI Case, HBS, 2009, page 1).

In spite of ODI’s strong position, there are a number of weaknesses that could significantly impact the growth and development of distortion lenses for chickens.  As stated above, this product is revolutionary.  However, the product has no exposure and no market penetration.  Not only does this venture involve a new product, but it is a variance to the status quo for chicken farms - debeaking.  Chicken farmers are consistent.  They rarely waiver in their decisions, and their industry prides itself on consistency.  Marketing and selling a product to such a business owner will be challenging, especially with ODI’s small size and reach.  Not having established facilities for R&D, production, or distribution leaves the company exposed to competition and at the mercy of their partnerships.