Optical Distortion

Team members :

Anurag Mehra

Gunreet Kaur Thind

Mihika Yadav

Mrinal Thakur

Pradyoth C John

Rohit Agarwal

Sharanya G S

Objective

To become a multi-product, multimarket company which can provide effective service anywhere in the country

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Problem

Achieving growth objectives without placing excess stress on limited managerial and financial resources

3/14

Company overview

Optical distortion Inc.- Produces one product, the ODI lenses for chicken

ODI lenses- Invented by Robert D. Garrison and Ronald Olson in 1965

Was issued a US patent in December, 1969 Obtained a long-term license from New World

Plastic for exclusive use of hydrophilic polymer for non- human applications

Two full-time employees- Daniel Garrisson (CEO) and Ronald Olson(VP of marketing)

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Industry Overview

In 1921, the largest farm in the US had 2000 chickens; In 1974, the largest farm had 2,500,000.

Birds were confined in groups of 3-4 in multi-tiered cages

80% of the 440,000,000 laying chickens in 3% of the farms- 25% in 3 states, 36% in another 9 states

Two counties in southern California housed 21,000,000 chickens 5

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6Industry

Small Farms Medium Farms

Large Farms

No. of Birds 10,000 or fewer

10,000 to 50,000

over 50,000

Operated By family Professionally, owned by farmers

Small manufacturing firm

Distribution channel

Sold eggs locally through small grocery stores

Sold to large corporate purchaser

Sold through large grocery chains

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Cannibalism

Pecking order among chickens established through fighting and pecking

Recognition of comb on head preserves pecking order

Submissive birds pecked if head is held high, or for entering territory of a dominant bird

Controlled by debeaking- reduces mortality from 25% to 9%

Alternative- ODI Lenses

7/14

Advantages & Disadvantages of Debeaking

Advantages Disadvantages

Reduced the efficiency of the beak as a weapon

Chickens were subjected to trauma

Reduced mortality 25% to 9% Temporary weight loss and retardation of egg production for at least a week

No expenses apart from labor costs

If the beak was cut too short, it would result in permanent regression. If left too long, then it would grow back

8/15

ODI Lenses

ODI lenses- Used to obscure the vision of chickens; leads to reduction in both cannibalism(from 25% to 4.5%) and savings on food( $800/10000 chicken/year)

Tinted red- affects ability to act out aggression

Patent protected- manufactured by injection molding soft hydrophilic polymer

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Not viable for smaller farms

Lack of skilled manpower

High price

Cannot be re-used

 Idea can be easily stolen

Threat of entry of large agricultural firms

Protest from animal rights organisations

No Competition

Big potential market

Medium and Large farms – major part of the market

Licenses technology can’t be used by others

First mover

Patent holder

Minimises cannibalism

Saves on chicken feed

SWOT Analysis

Strengths

Weak-nesses

ThreatsOpportu-nities

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Benefits to farmer/chicken

Savings on Cannibalism $ 0.54

Savings on egg loss due to trauma $0.09

Savings on food/year $0.08

Net benefit of ODI $0.70

Net benefit of Debeaking $0.38

Benefit of ODI over Debeaking $0.316

ODI Saves 83.16% more money than debeaking

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Mathematical analysis

Break even analysis

Total cost/pair $0.034

Total fixed cost $955,000

12/12

Selling price

$0.08 $0.16 $0.19 $0.30

Margin $0.046 $0.126 $0.156 0.266

Break even volume

20,979,790

7,608,350 6,140,690 3,596,716

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13Why use ODI?

No trauma nor weight loss in chicken

Guaranteed results- you can’t go wrong with ODI

Make more money!!

83% more savings than debeaking- save $4440 more per 10000 chicken

Save on chicken feed

Save on loss of egg production

Suggestions

Price a pair of lenses at $0.16 (50-50 split in benefits)-penetrative pricing

Visit large farms and install lenses in a relatively small number of chickens

In 6 months, the benefits of ODI lenses would be apparent

Once large farms adopt ODI, others will follow

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Marketing approach

Segment farms according to size- Small, medium and large

Target medium and large farms, i.e those with more than 10,000 chicken

Concentrate on California market initially; North Carolina and Georgia should be targeted next

Advertise in leading poultry magazines; participate in trade shows

Expand aggressively

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