2015 North American Healthcare Innovation through Eye Care Delivery Emerging Market Innovation Award

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1 North American Healthcare Innovation through Eye Care Delivery Emerging Market Innovation Award

2 Contents Background and Company Performance... 3 Industry Challenges... 3 Strategy and Implementation Excellence of VisionSpring... 3 Conclusion... 6 Significance of Emerging Market Innovation... 7 Understanding Emerging Market Innovation... 8 Frost & Sullivan s Global Research Platform... 9 Key Benchmarking Criteria... 9 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Best Practice Award Analysis for VisionSpring Strategy Excellence Implementation Excellence Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Impact of Emerging Market Innovation on Key Stakeholders About Frost & Sullivan Frost & Sullivan 2 We Accelerate Growth

3 Background and Company Performance Industry Challenges While a substantial number of people lack proper eye care in emerging markets, there are not enough institutions and companies to cater to that demand. Companies that do cater to unmet healthcare needs such as eye care in those markets are challenged by cultural biases that exist within communities and a lack of awareness. These factors sometimes impede the market entry of companies. Moreover, regulatory barriers such as lobbying, trade barriers in the form of customs clearance, and scarcity of skilled human resources are the other challenges faced by companies when entering emerging markets. Strategy and Implementation Excellence of VisionSpring Strategy Excellence Criterion 1: Robust Emerging Market Growth Strategy Working with the noble vision of providing affordable and accessible eye care to the underserved areas of emerging markets, VisionSpring has adopted a novel approach to eye care delivery that involves the distribution of low-cost eyeglasses to low-income customers in urban slums and rural communities. Recognizing that over 600 million people globally are visually impaired or blind solely because of lack of access to a simple pair of eyeglasses and that millions of children s educational achievement is curbed for the same reason, the company is working to mitigate the loss of human opportunity and potential. Its unique model of providing eyeglasses through an extended network of partners and vision entrepreneurs and its revenue generation approach has enabled the company to scale its operations and expand into new markets. Innovating in various operations such as the manufacturing process, prescription generation, distribution, and pricing, VisionSpring has been able to accelerate its emerging market growth and presence. Currently operating out of the US and India, VisionSpring s glasses are being supplied to and worn in almost 40 countries across the globe. Criterion 2: Emerging Market Penetration Strategy As opposed to the conventional charity approach of distributing free eyeglasses by using discarded or spare eyeglasses, VisionSpring designs, develops, manufactures, and distributes eye glasses made specifically for people who earn between $1 and $4 per day. Its approach does away with the need for donated spectacles which are mostly unusable. In fact, a study published in 2012 in the journal, Optometry and Vision Science, revealed that only 7% of a test sample of 275 donated spectacles was usable. VisionSpring has developed a number of routes to reach base of the pyramid customers. Among these are entrepreneurs trained by the company who help address the challenge of skilled resource scarcity. Called vision entrepreneurs, they are responsible for marketing Frost & Sullivan 3 We Accelerate Growth

4 and selling low-cost high-quality eyeglasses to rural communities. They also raise awareness about the benefits of eyeglasses and their potential impact, thus gradually removing the cultural biases which manifest in the form of unacceptance of glasses. The vision entrepreneurs are local resources who undertake several responsibilities. In Bangladesh for example, VisionSpring has worked with the local poverty eradication organization BRAC to train 35,000 community health workers to sell reading glasses as part of their basket of essential health goods. By aligning its strategies with the requirements of the low-income markets and leveraging last-mile supply chains, the company has been able to penetrate effectively into those markets. Criterion 3: Commitment to Innovation The primary hurdle faced while extending healthcare to underserved areas is the paucity of medical professionals in this instance ophthalmologists and optometrists as a disproportionately large number are concentrated in urban areas. VisionSpring recognizes that the majority of people with refractive error have presbyopia, a condition that emerges typically in middle age in which the eye becomes less able to focus up close. While some people with refractive error require custom prescription lenses, the majority need just over-the-counter reading glasses to regain their productivity and income earning potential. To determine if someone could benefit from reading glasses, VisionSpring undertakes task shifting, which involves training vision entrepreneurs and other paraprofessionals to conduct basic sight tests in low-income areas. In the event that someone requires more specialized eyeglasses or medical care for cataracts or other pathologies, they are referred to an optometrist or health center. Innovating in its distribution channels, VisionSpring sells its products through wholesale partnerships, low-cost retail stores (hubs), and community-based outreach camps and social impact projects (spokes). Selling lower priced products, VisionSpring stores operate like traditional optical shops. Located principally in eye hospitals in rural and urban lowincome areas, these stores provide customers with a wide range of affordable glasses. VisionSpring also undertakes outreach programs for example in slums, agricultural estates, transit hubs, and handicraft and manufacturing centers under which store representatives and other social impact staff screen communities. Customers with presbyopia can purchase reading glasses on the spot. In some outreach efforts, VisionSpring can fulfill prescriptions glasses through its hubs or its centralized lens grinding service. The company also innovates in its manufacturing process by understanding the process better. The company presently manufactures the glasses in China in large volumes keeping the costs low. From an initial cost of $1.5 per pair, costs have reduced drastically by 300% to cost as low as 50 cents per pair. Through these prudent innovative strategies, VisionSpring has displayed remarkable potential in impacting refractive error in emerging markets. Frost & Sullivan 4 We Accelerate Growth

5 Implementation Excellence Criterion 4: Agility to Localize for Emerging Market Requirements Catering to markets where the average income is typically low, VisionSpring innovates in its pricing model to cater to those at the base of the income pyramid. The company follows the approach of cross-subsidization in order to meet market requirements. For example, in India, 80% of the customers belong to a low-income bracket, with the remaining 20% being comparatively better off. The visitors belonging to a higher income bracket prefer branded and fashionable glasses over a basic pair. As they have the capacity to pay more and choose from a variety of options, VisionSpring earns a higher margin on such customers and this helps it subsidize glasses for its poorer customers. To meet varying client requirements, the company offers a wide range of glasses, including single reading vision glasses, bifocals, prescription glasses, photochromic glasses, and protectors. Reading glasses are priced between $1 and $3, while prescription glasses are priced between $2 and $8. VisionSpring manages supply chain distribution costs to minimize the final price of the glasses. Such pragmatic measures have enabled the company to address emerging market challenges and meet eyewear needs. Criterion 5: Commercialization Success VisionSpring reached its goal of having a million customers within 10 years of its launch in The company went on to reach the second set of million customers within just 2 additional years and it is looking to reach 3 million customers by With such a strong outreach, it has till date created $280 million in economic impact. According to a Michigan University study of VisionSpring s impact, reading glasses increase productivity on average by 35% and also have the potential to increase monthly income by 20%. With VisionSpring s retail, wholesale, and community outreach efforts earning increasing revenue that covers a growing share of the organization s total costs, with some business units approaching break-even. To meet total operating requirements, VisionSpring s supporters contribute additional revenue with the expectation of a social return on the investment, namely that with glasses VisionSpring s low-income customers gain income earning potential among other educational, safety, and quality of life benefits. It s trackrecord of scaling is testimony to VisionSpring s success in providing affordable and accessible eye care to an increasing number of customers. Criterion 6: Go-To-Market Models In its concerted efforts to increase the accessibility of glasses, VisionSpring is working towards the de-medicalization of glasses in order to make them a consumer product. This is because the channels of distribution are easier through consumer markets, thereby increasing the accessibility of the products. VisionSpring has an extensive partnership model for distribution. The company partners with a wide variety of international nonprofits, local organizations, hospitals and other healthcare providers that serve VisionSpring s target customers. For example, in Rwanda it has partnered with Vision for a Frost & Sullivan 5 We Accelerate Growth

6 Nation to introduce basic vision services and glasses to communities through hundreds of primary care clinics. VisionSpring also partners with companies under their CSR initiatives, servings as impact consultants to companies seeking to increase access to eye glasses in their stakeholder communities. A robust partnership model helps lower costs for both VisionSpring and its partners. VisionSpring pools orders for many organizations to drive down purchasing costs and manages the sourcing and supply chain such that partners need not maintain this capacity. Partnership helps lower costs for VisionSpring, as partners bear some of the distribution costs. The partners also share back important information regarding style, design, and functionality of the products as requested by the communities enabling VisionSpring to continuously evolve its offerings to meet customer preferences. Strategically entering countries where eyeglass penetration is low and strong local partners are available, the company has been able to register a strong presence in emerging markets. Prudent strategies coupled with laudable execution and distribution approaches have helped support VisionSpring s growth. Conclusion Carefully designing, developing, and manufacturing eyeglasses to meet emerging market needs, VisionSpring has successfully helped improve eye care delivery in emerging economies across Latin America, Asia, and Africa. The company s cost-effective manufacturing process, approach of cross-subsidizing prices, and unique distribution model have significantly transformed the state of eye care in emerging markets. With a comprehensive understanding of emerging market requirements, VisionSpring s ability to innovate for emerging markets is manifested in its price and marketing innovations, strategic partnerships, and effective business model. In recognition of its intensive work in delivering eye care to emerging markets, Frost & Sullivan is proud to present the 2015 North America Emerging Market Innovation Award in Healthcare Innovation through Eye Care Delivery to VisionSpring. Frost & Sullivan 6 We Accelerate Growth

7 Significance of Emerging Market Innovation Amidst changing global dynamics, emerging markets have arisen as hotbeds of opportunities in the last decade. Representing untapped growth opportunities, companies have been eager to expand their presence into these markets to gain sustained global leadership. However, owing to the inherent nature of emerging markets and their distinction from developed markets, a one-size-fits-all approach by companies is likely to fail. In order to succeed in emerging markets, a company would have to be best-in-class in three key areas: Frost & Sullivan 7 We Accelerate Growth

8 Understanding Emerging Market Innovation A true emerging market innovator would make a thorough assessment of market conditions, formulate a tailored emerging market strategy, and then proceed to expand and retool its portfolio of products and solutions. Strategy and implementation excellence are therefore key to realizing the three-pronged goals of growth, innovation and leadership mentioned in the earlier page. By successfully innovating for emerging markets, a company not only enhances its own growth, but also contributes to the growth and development of emerging markets. Frost & Sullivan 8 We Accelerate Growth

9 Frost & Sullivan s Global Research Platform Frost & Sullivan maintains more than 50 years in business and is a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The Company s research philosophy originates with the CEO s 360 Degree Perspective, a holistic research methodology that encourages us to consider growth challenges, and the solutions companies employ to solve them, from every angle. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the results of our research, Frost & Sullivan is proud to present the 2015 North America Emerging Market Innovation Award in Healthcare Innovation through Eye Care Delivery to VisionSpring. Key Benchmarking Criteria For the Emerging Market Innovation Award, we evaluated strategy and implementation excellence according to the criteria detailed below. Strategy Excellence Criterion 1: Robust Emerging Market Growth Strategy Criterion 2: Emerging Market Penetration Strategy Criterion 3: Systematic Use of Mega Trend Criterion 4: Commitment to Innovation Criterion 5: Aspirational Ideals Implementation Excellence Criterion 1: Agility to Localize for Emerging Market Requirements Criterion 2: Commercialization Success Criterion 3: Customer Service and Training Adapted to Local Needs Criterion 4: Go-To-Market Models Criterion 5: Sustainable Initiatives Frost & Sullivan 9 We Accelerate Growth

10 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at bestin-class levels. 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS Best Practice Award Analysis for VisionSpring Strategy Excellence Criterion 1: Robust Emerging Market Growth Strategy Requirement: The Company has devised a tailor-made strategy to tap into emerging markets, as opposed to one-size-fits-all approach. The Company would also need to have a strong emerging market presence and/or potential expansion plans in the pipeline. Criterion 2: Emerging Market Penetration Strategy Requirement: The Company employs a tactical approach to surmount challenges associated with the initial entry process. For instance, the company might partner with local teams to overcome language, cultural and regulatory barriers. Criterion 3: Systematic Use of Megatrends Requirement: The Company incorporates long-range, macro-level scenarios while strategizing for emerging markets. Criterion 4: Commitment to Innovation Requirement: Conscious ongoing development of an organization culture that supports innovation based on systematic need assessment of emerging markets. Frost & Sullivan 10 We Accelerate Growth

11 Criterion 5: Aspirational Ideals Requirement: A willingness to look beyond the simple goal of generating a profit to embrace a more powerful ideal of bringing greater value to customers. Implementation Excellence Criterion 1: Agility to Localize for Emerging Market Requirements Requirement: The Company has retooled its existing portfolio of products and services and/or the company has developed new products and services to meet local needs and preferences. Criterion 2: Commercialization Success Requirement: To increase the adoption rate of its products and services in emerging markets, the company offers low-cost financing solutions, undertakes promotional activities, presents introductory offers etc. Criterion 3: Customer Service and Training Adapted to Local Needs Requirements: The Company has tailored it customer services and training programs to suit local requirements. Criterion 4: Go-To-Market Models Requirement: The Company makes use of unique business models such as corporate partnerships and public-private collaborations in order to enhance and expand its emerging market presence. Criterion 5: Sustainable Initiatives Requirements: The Company adheres to environmentally sustainable practices in the emerging markets in which it operates. Frost & Sullivan 11 We Accelerate Growth

12 Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Our awards team follows a team 10-step process (illustrated below) to evaluate award candidates and assess their fit with our best practice criteria. The reputation and integrity of our awards process are based on close adherence to this process. STEP OBJECTIVE KEY ACTIVITIES OUTPUT 1 Monitor, target, and screen Identify award recipient candidates from around the globe Conduct in-depth industry research Identify emerging sectors Scan multiple geographies Pipeline of candidates who potentially meet all bestpractice criteria 2 Perform 360-degree research Perform comprehensive, 360-degree research on all candidates in the pipeline Interview thought leaders and industry practitioners Assess candidates fit with best-practice criteria Rank all candidates Matrix positioning all candidates performance relative to one another 3 Invite thought leadership in best practices Perform in-depth examination of all candidates Confirm best-practice criteria Examine eligibility of all candidates Identify any information gaps Detailed profiles of all ranked candidates 4 Initiate research director review Conduct an unbiased evaluation of all candidate profiles Brainstorm ranking options Invite multiple perspectives on candidates performance Update candidate profiles Final prioritization of all eligible candidates and companion best-practice positioning paper 5 Assemble panel of industry experts Present findings to an expert panel of industry thought leaders Share findings Strengthen cases for candidate eligibility Prioritize candidates Refined list of prioritized award candidates 6 Conduct global industry review Build consensus on award candidates eligibility Hold global team meeting to review all candidates Pressure-test fit with criteria Confirm inclusion of all eligible candidates Final list of eligible award candidates, representing success stories worldwide 7 Perform quality check Develop official award consideration materials Perform final performance benchmarking activities Write nominations Perform quality review High-quality, accurate, and creative presentation of nominees successes 8 Assemble board of advisors Finalize the selection of the best-practice award recipient Present candidates to a Board of Advisors Build consensus Select winner Decision on which company performs best against all best-practice criteria 9 Communicate recognition Inform award recipient of award recognition Present award to the CEO Inspire the organization for continued success Celebrate the recipient s performance Announcement of award and plan for how recipient can use the award to enhance the brand 10 Take strategic action Share award news with stakeholders and customers Coordinate media outreach Design a marketing plan Assess award s role in future strategic planning Widespread awareness of recipient s award status among investors, media personnel, and employees Frost & Sullivan 12 We Accelerate Growth

13 Impact of Emerging Market Innovation on Key Stakeholders The Emerging Market Innovation Award recognizes VisionSpring s accomplishments in Healthcare Innovation through Eye Care Delivery. Unbiased, third-party recognition can help enhance credibility and brand value, thereby supporting VisionSpring s standing in the market. By researching, ranking, and recognizing those who define excellence in their respective endeavors, Frost & Sullivan hopes to inspire and influence the following three constituencies: Investors Investors and shareholders always welcome impartial third-party recognition. Similarly, prospective investors and shareholders are drawn to companies with a well-established reputation for excellence. Unbiased validation is a highly credible way to showcase an organization worthy of investment. BEST PRACTICES LEVERAGE FOR GROWTH ACCELERATION Customers Third-party validation can help assure prospective customers of a company s value and reputation. It can also help lower the level of risk that a customer may feel in engaging for the first time with an organization. Employees This Award represents the creativity and dedication of VisionSpring s executive team and employees. Such public recognition can boost morale and inspire your team to continue its pursuit of excellence in emerging market innovations for VisionSpring. About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit Frost & Sullivan 13 We Accelerate Growth