Ciba Vision company overview and operations

CIBA Vision

CIBAVISION: Overview of current problems

CIBA VISION is one of the leading producers of contact lenses in the world today. Until recently, it was a division of Novartis, an international healthcare company. In 2010, the healthcare companies of Alcon and Novartis merged, bringing CIBA VISION under Alcon's control. CIBA became the primary provider of contact lenses for this healthcare conglomerate. CIBA VISION sold more than 1.9 billion lenses in 2009 and advertises itself as one of the leading purveyors of high-tech eye care. CIBA offers a wide range of contact lenses, including extended wear, high moisture, contacts for bifocal wearers and other contacts lens wearers with specialized health conditions (such as astigmatism), along with daily disposables (Overview, 2010, CIBA VISION)

CIBA's main competitors in the contact lens market are Johnson & Johnson and Bausch & Lomb. Both of these two companies have different structural models than CIBA VISION at present. Johnson & Johnson is a heavily diversified company. As well as producing medically-related products, it also sells personal care products such as shampoo and baby lotion, which enables it to be diversified even when the healthcare industry is threatened. Bausch & Lomb, in contrast, is mainly known for producing contact lenses and little else.

It has often been observed that merges frequently fail, and the merger between Alcon, Novartis, and CIBA VISON combines three healthcare-focused entities. The theory behind mergers is that they provide synergies through streamlining the operating costs and overhead of the combined companies, and generate value based upon economies of scale. Alcon is a specialist in eye care, specifically pharmaceuticals and eye surgery. Its acquisition of CIBA VISION thus was thought to add value to Alcon's profile of eye-related products. Alcon manufactures OPTI-FREE, the leading contact lens cleaning solution in the nation (Vision care products, 2011, Alcon). Consumers who use this product will also presumably look more favorably upon buying CIBA VISION contacts, given their positive experiences with OPTI-FREE. Merging the two companies also allows Alcon to promote CIBA VISION contact lenses along with its other eye care products and services through optometry offices as well as through general promotions. Consumers who are pleased with CIBA VISION contacts are presumably more likely to purchase Alcon's cleansers.

Within the field of contact lenses specifically, Bausch & Lomb is by far the most famous of all the leading companies. It is also famous for developing Ray Ban sunglasses. However, the company has suffered a great deal of negative publicity in recent years. CIBA's major competitor was involved in a lawsuit in which Bausch & Lomb was found to have violated CIBA VISON's patent for one of its core products. Bausch & Lomb was forced to withdraw its MoistureLoc contact lens solution from the market when it was found that there was a high incidence of fungal infections for users (Bausch & Lomb: Limited voluntary recall, 2007, Bausch & Lomb Official Website). Currently, there is an industry-wide opportunity for CIBA to capitalize upon the loss of trust in Bausch & Lomb.

CIBA has continued to diversify its product offerings and emphasize research and development. It was the first company to develop breathable silicone hydrogel (SiHy) contact lenses, which has made a significant contribution to eye health, and it is has long been one of the most innovative companies in creating contact lens products for hard-to-fit eyes (Research and development, 2010, CIBA VISION). But questions remain as to whether it can continue to thrive in the wake of the recent merger. The problem is not with the reported quality of its product, given that CIBA VISION has lead the industry in innovation and has a better consumer service record than its major competitors. But whenever a company engages in a merger, questions always arise about the ability of the companies to work together harmoniously, and to not lose their core strengths.

Once it was observed that if an economist were to predict every merger were to fail, he or she would be more likely to be right than wrong in most instances. Clashing organizational cultures, the ill will generated by letting people go, and resentment of the larger entity are all common. Additionally, the rate of return on the planned synergies does not always 'deliver.' The plan for Alcon is that the global eye care company will use CIBA VISION to leverage its current geographical presence, and gain traction in the one sphere of the market -- contact lenses -- where it was lacking before. Alcon stresses that it seeks to be a global leader in all spheres of eye care and CIBA VISION is a core component of its envisioned plan.