Ciba Vision Problem-Solution Example 1: Research Paper

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Once again, due to problems with the supplier, the product was unavailable through conventional pharmacies and the cost of a bottle of Miraflow (20 mL) skyrocketed from $6.00 to $30 on eBay -- an increase of 400%. This created a negative perception of a lack of affordability of CIBA's core products. CIBA took note of this problem and collaborated with I2, a supply chain company. It set the goal of keeping product availability at major retail establishments at 99.5%. Before embarking upon its venture with I2, the product supply chain was highly fragmented, resulting in shortages in many areas and causing the price to spike online. The result was a series of unhappy customers. This also had the effect of deterring new customers from trying CIBA Vision products, because of the perception of the product being unnecessarily pricy. Collaborating with a singular company allowed for a higher level of product availability -- up to the stated goal of 99.5%. Because of improved distribution and the absence of shortages, this reduced costs for consumers. Through greater optimization and monitoring of inventory, the timing new product...

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This is another example of effective 'backward' vertical integration and gaining more effective control over the supply chain. In the future, to communicate better with customers, the company should also allow consumers to use the website to find out about the availability of CIBA Vision eye care products in their areas, so they can easily locate the nearest source (for example, they could be permitted to type in their zip codes and be directed to a 'product finder' that would allow them to find CIBA eye care products at the stores nearest to their homes).

Sources Used in Documents:

References

Armour, L. Turning a blind eye from CIBA Vision, (2006). Retrieved on June 10, 2011

http://lukearmour.com/2006/03/03/turning-a-blind-eye-from-CIBA-vision/

www.CIBAvision.com

I2 customer success story. (2008). Retrieved on June 10, 2011
http://www.quickmba.com/strategy/vertical-integration/


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