From a pure business perspective, VSP is a genius company and the acquisition of Marchon makes all the sense in the world. The purchase allows them to compete with Luxottica head-to-head. What other company in any industry has a captive relationship with 55 million consumers (1 in 6 Americans) who are "forced" to purchase their products and services from a "single" source; who control a significant portion of the business of 25,000 retail locations (who dare not say much for fear of exclusion); who is vertically integrated and has solid control over margins due to their immense purchasing power; who has their IT "hook" into thousands of their provider locations; who now stands poised to take their product worldwide?
It's an amazing model.
I tip my hat to Rob Lynch and his predecessors for their vision. I certainly salute my friends Al Berg and Larry Roth (and posthumously Jeff, Ruth and Frank White) for their amazing vision and incredible hard work in creating and assembling Marchon.
My criticism and concern lies with VSP's corporate structure; their reimbursement rates and benefit designs; and their lack of transparancy and oversight with the folks who they say they serve. Selling more consumers discounted vision care and paying reimbursements to the provider that deliver anemic if any margin is NOT in the best interest of my clients. Nor is it, in my opinion, good for the eyecare industry at large (see my July 22nd post on discounting).
