Lasik Vision Company

LASIK VISION CORPORATION

Background:

• Canada’s largest operating laser vision correction company,

founded by Dr. Hugo Sutton in 1997.

• It had 15 clinics across Canada and 30 clinics in Northern America.

Mission:

· To deliver premium quality care, using the highest surgical standards and the latest technology, at an affordable price.

Services Provided:

• Provides the best quality patient care at the most affordable price for patients (discard glasses or contacts after the operation)

• Provides refractive surgery that correct myopia, hyperopia and astigmatism

Other Information:

• Entry of Michael Henderson in the company. In which he reengineer the traditional model of the refractive surgery process by eliminating the use of other expensive equipment such as ultrasound scanner that measure the individual layers of each cornea.

• Rapid clinic expansion in Canada and in United Sates

• Aggressive advertisement

• Offered lowest fee for lasik surgery in the industry.

Case Questions

1. What was Lasik Vision’s competitive priority?

Lasik Vision aimed to gain competitive edge in the eye surgery industry by offering the lowest prices with marginal profits based on high volume of operations performed. In addition, the company was aggressive in its advertising campaign. Prices were brought down from the initial cost of $5,000 to $1,598 for both eyes.

Henderson focused on efficiency, productivity and growth. He believed that mass volume with low margins is the way to fortune. In order to achieve all this, he pushed for the reengineering of the traditional model of the refractive surgery. Using the conventional trade-off model, we noticed that cost was fundamentally cut down at the expense of other manufacturing capabilities. Reducing the number of employees, trying not to use expensive equipment and cutting out optometrists from the process were undertaken to cut down costs. In order to cater to a large volume of clients, Henderson pushed the company into massive expansion with the company opening one new site per week beginning March 2000. The whole delivery process was also standardized.

2. Is it an appropriate approach in this industry? What repercussions, actual or perceived, might occur with this priority?

Such use of aggressive pricing strategies can still be considered as a viable approach to attract customers and overthrow the competition as long as quality is not sacrificed, even in the highly specialized eye-surgery industry, which can be considered as part of a very competitive medical environment. Unfortunately, in the case of Lasik Vision, their efforts to increase efficiency and to provide the lowest prices possible simultaneously forced them to cut down on essential manpower and on the use of certain expensive equipment that compromised patient care, which cost them dearly in the long run. As what TLC remarked regarding Lasik’s downfall, their failure to provide both solid business and clinical models are the main reasons for putting themselves at such a financial disadvantage.

Though