PROJECT REPORT

On

Crisis Management at Bausch & Lomb-The ‘Renu

Moisture loc controversy

Submitted in Partial Fulfillment for the Award of Post graduation

diploma in management
(2009-2011)

Submitted by:
Astha Shukla
Nimisha Basu
Suman Pathria
Swapnil Chowdhary
Ranjeet Kumar
Ashish Bajpai
Surender Kumar Jaiswal
 Acknowledgement

With an overwhelming sense of gratitude, I acknowledge the valuable guidance and consistent
encouragement extended to me by my project mentor Ms Sartaj Khera (professor) my mentor at
Sri Sharada Institute Of Indian Management- Research. I am thankful to her whose guidance and
support enabled me accomplish this endeavor. Their technical acumen and years of experience
have provided me with crucial inputs at critical stage.

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 PARTICULARS
S No.

1. INTRODUCTION

COMPANY PROFILE
3.

4. BACKGROUND

5. PROBLEM

ANALYSIS
6.

TABLE OF CONTENTS

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Abstract

This case is about the crisis faced by Bausch and Lomb (B & L), a leading eye care company, in

The wake of reports linking its contact lens cleaner, Renu with moisture loc to a fungal infection

of the eye called Fusarium Keratitis. B & L decided to suspend the US shipments of this project

and asked US retailers to temporarily remove Renu moisture loc from their shelves. The case

Discusses the views of some marketing and branding experts who highlighted the inadequate

action taken by B& L when the initial reports of infection came out in Asia.

The company’s critics felt that B & L had not handled the crisis well and was likely to pay the

price for it in terms of loss of sales, loss of image and law suits. However, there were others who

Pointed out that B & L was not all to blame because there were no clear link established

between B & L‘s product and the infection.

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INTRODUCTION

Bausch & Lomb is the eye health company dedicated to Bringing Visionary Ideas to Eye Health.

The company offers the world’s most comprehensive portfolio of eye health products, and has

One of the oldest, best known and most respected health care brands in the world.

The company began in 1853 in Rochester, New York, as a small optical shop that grew to

become a Multi-billion dollar corporation with approximately 13,000 employees worldwide, and

with products available in more than 100 countries.

At Bausch & Lomb, its history of innovation continues today as it invent new materials, engineer

new Technologies, and create pioneering ways to help people see well.

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Company profile

In the 1900s, B& L produced the first optical quality glass made in America. Its sunglasses were

used by military in world war I. B & L is also credited with developing the lens of the cameras

that took the first satellite pictures of the moon. In 1971, B & L introduced the first soft contact

lenses.

As of April 2006, it was the largest global provider of eye care products. B & L product lines

included vision care, Surgical and pharmaceuticals. Its vision care business manufactured and

marketed soft and GP contact lenses, lens care products for soft and GP lenses, eye care products

and vision accessories.

The company offered the comprehensive line of products for ophthalmic surgery in the surgical

market segment.

It developed and marketed prescription and over the counter drugs used to treat a wide range of

eye conditions such as Glaucoma, eye allergies, Conjunctivitis and dry eye.

The Bausch & Lomb name is one of the best known and most respected healthcare brands in the

world and B & L leverages on this brand name. In 2004, it employed approx. 12400 people

worldwide and its products were available in more than 100 countries. Its 2004, revenues were

US$ 2.2 billion. In late 2004, B& L launched Renu moisture loc, its newest brand in the lens care

segment.

In February 2006, B& L stopped shipments of Renu moisture loc to Singapore and Hong Kong

although they maintained that the infection was not linked to their product. B& L partnered with

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health authorities and researchers to investigate the extent and cause of the outbreak.

In a press release in March 2006, B & L announced that it was collaborating in a scientific

investigation with health authorities and leading experts around the world including the CDC.

Bascom palmer Eye Institute, Johns Hopkins Wilmer Eye Institute and the Ministries of Health

in Singapore, Hong Kong and Malaysia to determine the extent and the cause of the increase in

infection among contact lens wearers.

It, however, claimed that the causes reported in Asia involved examples of poor compliance with

lens care regimens and contact lens wear, such as wearing expired lenses and reusing disposable

contact lenses. These investigations did not reveal any cause and effect relationship between

Renu moisture loc and Keratitis.

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Company background

B&L market three broad categories of products:

Vision Care: the contact lens offerings span the entire spectrum of wearing modalities and

include such well-known brand names as PureVision®, SofLens®, Boston® and Optima® . its

lens care products include the ReNu® brand of chemical disinfectants for soft contact lenses as

well as the Boston® line of products for cleaning GP contact lenses.

Pharmaceuticals: its products treat a wide range of eye conditions including glaucoma, eye

allergies, conjunctivitis, dry eye and retinal diseases. it offers proprietary and generic medicines

available by prescription, over-the-counter eye drops and other medications. its line of

proprietary Rx products includes the steroid eye drops Lotemax® , Alrex®, and Zylet®,

and,Retisert® and Vitrasert® to treat retinal diseases. Outside the U.S., the non-selective beta

blocker, Carteol; Minims, preservative-free, single-dose drops; and Liposic ointment for dry eye.

Leading OTC products include the Ocuvite® and PreserVision® brands of ocular

vitamins,Soothe® dry eye drops, and Alaway® allergy drops.

Cataract and Vitreoretinal Surgery: the company offers a full suite of products including

intraocular lenses and delivery systems featuring the Crystalens®, SofPort® and Akreos™

brands of IOLs, the Stellaris® and Millennium™ lines of phacoemulsification equipment, and

other surgical instruments and devices, including the Storz® line of instruments.

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ISSUES

The major two issues are

1. The challenges faced by the company in managing a product crisis i.e. ReNu

MoistureLoc.

2. the importance of clear and effective communication with customers in the event

of a controversy/crisis.

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Bausch & Lomb in the Public Eye

On April 10, 2006, eye care company Bausch & Lomb Inc temporarily suspended the US

shipments of its contact lens cleaner. Renu with moisture loc produced at its Greenville, South

Carolina, USA, manufacturing facility. This was done in order to facilitate a Us food and drug

Administration (FDA) investigation into reports of a fungal infection, Fusarium Keratitis, among

contact lens wearers in the US.

B & L voluntarily suspended its US shipments of Renu Moisture loc following an FDA warning

to the consumers to use Renu Moisture loc with caution. The FDA had issued this warning on the

basis of an investigation by the US. Centers for disease control and prevention (CDC) which was

reviewing 109 cases of suspended Keratitis in the US. Though the CDC did not directly link the

infection to Renu moisture loc, it said that when it interviewed 30 affected people , a high

proportion ( 26 out of 30) of the affected people had used B & L ‘s Renu moisture loc solution.

B & L‘s CEO, Ronald Zarella said “The CDC has not determined if these reports represent an

Increase of Fusarium Keratitis infections and is continuing to investigate the association, if any,

Of these cases with any product. Nonetheless, in the interest of public health, we will voluntarily

suspend US. Shipments of Renu with moisture loc while we pursue all appropriate steps to bring

this investigation to a definitive conclusion.

On April 13 2006, B & L voluntarily asked US retailers to temporarily remove Renu Moisture

loc from their shelves. It also recommended that consumers switch to other lens care solutions,

so as to prevent any confusion among contact lens wearers about what to do while the

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investigation was going on. B & L stressed the fact that the report of such cases was linked only

to the Renu moisture loc manufactured at its Green Ville plant and did not apply to any other B

& L products. Other lens care solutions to the Renu or to the Renu moisture loc made in factories

outside the US.

However B & L corrective action did not impress analysts, marketers and medical specialists,

many of whom felt that the eye care company had not done enough to inform the 30 million

wearers of contact lens in the US about the health issues linked with Renu moisture loc as soon

as it has come to know about it.

They also felt that B & L should have recalled the product from the market in February 2006

itself, when it first came to know about the association of Keratitis with Renu moisture loc. They

believed that B& L might have to pay the price for not acting promptly in the face of this crisis.

The analysts feared that B& L might have damaged its customer relations and that its brand

name might have been permanently tainted due to this incident.

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A Hazy View at B&L?

As B&L stopped shipments of MoistureLoc. U.S retail giants like Sears Holdings Corp., CVS

Corp, Walmart Stores Inc., Walgreen Co., Rite Aid Corp., ad al Albertson Inc.'s owned chains

including Jewel-Osco and Shaw's, pulled ReNu MoistureLoc off their store shelves. Walgreen

went a step further and took all ReNu produts off its shelves, not just the ones with the ReNu

MoistureLoc formulation line, to prevent confusion among customers, Synsam and Specsavers

Blik Optik of Sweden also pulled ReNu off their shelves...

Competitors Eye B&L's Market Share

As of April, 2006, more than 30 million people wore contact lenses in the U.S and the estimated

global market for lenses care solutions was US$1.8 billion. in terms of market share, B&L,

Alcon Inc, and Advanced Medical optics Inc. held the top three positions. in the market B&L's

ReNu MoistureLoc alone accounted for 9.2% of the market share in U.S lens care solutions.

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B&L in Damage Control Mode

When retailers started pulling MoistureLoc off their shelves. B&L started a public relations blits

in a bid to limit the damage caused to its reputation. it sent out a clear message asking all the

retailers to stop selling ReNu MoistureLoc until the truth has been established. The company

published newspaper ads in USA Today and some regional newspapers, which had an open letter

to consumers from Zarella. in the letter, Zarella said that the company was voluntarily

withdrawing the product in the interests of the public. He also apologized for any "inconvenience

or anxiety" caused due to this incident.

B&L announced that consumers who wished to return their ReNu MoistureLoc could visit its

website www.baush.com or call a toll free numb er to receive e a coupon for another B&L eye

care product or to receive their money back. it offered a coupon for upto US$8 toward the

purchase of its other contact lens solutions.

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Did B&L Give Itself A Poke In The Eye?

Many believed that B&L had adopted a "self-destructively passive role" in dealing with

customers and Investors and had thus broken the basic rule in crisis management. Analysts

criticized B&L for remaining silent even after it had learnt about the health problems associated

with the product after they surfaced i Asia as early as November 2005. Glennn MacDonald,

Professor at John M. Olin school of Business, Washington University said: “When you have a

problem like this, you should deal with it immediately."

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Future Outlook

Analysts expected that it was unlikely to return to the US market in 2006. Maris expected B&L's

remaining lens care business to witness at least a 10% market share contraction in 2006. analysts

also felt that even if the product were to be clear soon, it would be difficult to regain the lost

market share quickly. The fallout could also erode the company's brand equity not only in lens

care, but also in the contact lens itself.

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Our Comments and Analysis

1. The major issue the company facing was of a product crisis for its lens care product-

ReNu MoistureLoc.

2. The problem could have been prevented from getting spiraled up.

3. The company was not alert and showed lethargy in taking the necessary steps when it got

to know about the health issues related to its lens care product ReNu MoistureLoc.

4. B&L could have done a better job by responding to the problem earlier when it got to

know about such a problem. It got late in responding.

5. The CDC investigation did not directly link the infection with ReNu MoistureLoc but

most of the patients were ReNu users. So to get surety, B&L could have started its own

investigation earlier to know the actual conditions. And all these steps could have been

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 shared with the retailers and customers.

6. Apart from that, one more thing the company could do was to clearly and effectively

communicate with the customers in the event of controversy/crisis.

7. It broke the basic rule of communication and quick action at the time of a crisis.

8. B&L could have developed a proper communication channel with its customers as well

as its dealers, as soon as it came to know about such an issue.

9. By taking early steps it could prevent losing its customers’ confidence and trust on the

brand.

10. The mistake by B&L was, it followed the idea of wait and watch till some major news

came into being.

11. When the first issue came up in Asia in 2005, at that time only it could have started its

investigation and could inform its customers about this.

12. By this, at least the company could have retained its customers trust and it could have

helped it to regain its market share.

13. By the time B&L took the steps a major loss has happened to it. It had to be quick in

responding to the crisis.

14. Due to the problem with its one product its other products also suffered due to the

negative brand image. Walgreen took al the ReNu products off its shelves.

15. The company could make the matter clear in front of its customers earlier and could

inform the retailers too; so that the damaged occurred to the other lens care products

could be controlled.

16. The company lagged into speed and effective communication at the time of this crisis.

17. All the steps that it took later on could be taken earlier and due to this the damage would

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have been less.

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