Crisis Management Case Studies
...examples of a job well done.
Johnson & Johnson and Tylenol -- In 1982, Johnson & Johnson fell victim to a crisis that was of no direct fault of the company. One individual was successful in lacing the popular anelgesic Tylenol with cyanide, killing seven people. The numbers showed how much people associated Tylenol with a poisoning scare when the company's market value fell by $1 billion.
In 1986, the company was again faced with a similar crisis and this time they knew how to react. They quickly recalled all Tylenol products from all stores. This resulted in the company developing the tamper-proof packging to show that something was being done to protect their consumers.
Pepsi and the alleged syringe in the can -- Claims that Diet Pepsi drinkers were finding syringes in their cans began popping up during the summer of 1993. Although, Pepsi was unable to control whether or not the story would hit the media, the company decided to use the media to handle the crisis effectively. "If you're going to conduct your trial in the media, you've got to do it with the tools they're used to working with," said Rebecca Maderia, Pepsi's VP of public affairs.
Pepsi ran a series of video news releases on more than 400 stations nationwide, ran newspaper ads celebrating their freedom from liablility for the incidents. Fortunately, the scare turned out to be fraudulent and Pepsi urged the FDA to confirm and assure that the public had nothing to worry about when they went to sample a drink of Pepsi. Despite costing Pepsi over $25 million in lost sales, the company quickly restored consumer confidence in their products.
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