Case Studies

The three case studies described below are based on data from published sources and private conversations with senior executives from the companies.

Essilor and Vision Correction

About 2.3 billion people in the world suffer from poor vision due to refractive error, a common disorder of the eye that causes blurred vision. The treatment for refractive error is simple and cost-effective: eyeglasses. Nevertheless, in 2009, it was estimated that 564 million people who need eyeglasses do not have access to them.6 In the mid-2000s, only 7 percent of the Indian population actually wore glasses, whereas about 65 percent of the population needed them.7

Essilor International is a large French company that designs, manufactures, and sells plastic corrective opthalmic lenses and instruments in over 100 countries worldwide. With revenues of about $4.2 billion in 2009 and a global market share of about 30 percent, Essilor dominates the ophthalmic lens industry.

In 2005, Essilor partnered with the Indian not-for-profit eye hospitals Aravind (discussed in Chapter 3) and Sankara Nethralaya to launch an initiative to bring corrective lenses to India’s rural poor. The project started with four “refraction vans,” that is, mobile optician shops, which visited villages to prescribe and sell corrective eyeglasses to poor people suffering from visual disorders. Initially, a pair of eyeglasses was priced at less than 200 rupees ($4). Essilor considered scaling up the operation; the company estimated with 1,000 vans it could reach all 600,000 villages of India. However, even with donations/sponsorships and despite significant price increases, the project hardly earns its cost of capital. After trying to franchise the vans to local opticians, Essilor decided to operate them on its own and to limit future investments to the amount of cash generated by the existing vans. In 2010, Essilor was operating only eight refraction vans.

 
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