Tuesday, February 7, 2012

Thinking Outside the Box

Do you want to hear an interesting anecdote? In the 1980s, Bain & Company were hired by Bausch and Lomb (a producer of contact lenses) to do a strategic review of their business. Bausch was struggling to understand where it could best position itself in the marketplace vis-à-vis its competitors. In order to assess the competitive landscape, Bain sought out huge amounts of data on Bausch’s costs, customers and competitors. Bain was in a bit of a quandary, though. Bain couldn’t accurately calculate how much it cost a main competitor, CooperVision, to produce its own contact lenses. The Bain consultants came up with a novel solution. They contacted the BBC and requested a copy of a video that showed the Queen Mother touring one of CooperVision’s new plants in the south of England. They then blew up the images and were able to read the nameplates on all of the equipment. After some painstaking work calling up manufacturers to request quotes on similar machinery, the consultants were able to recreate CooperVision’s cost structure. Thinking outside the box, indeed!