Responding to a Crisis

Transcription

1 Memorial University of Newfoundland Responding to a Crisis Managing Quality with Nestle India Edge Consul;ng

2 Agenda Problem Statement Neal What should have happened Key Issues Key Objec;ves Alterna;ves Lindsey Recommenda;on Implementa;on Plan Angela Financials Ryan Risks and Mi;ga;ons Angela Conclusion

3 Problem Statement How should Nestle respond to both the market and its compe;tor in light of the recent Maggi Noodle crisis?

4 What Should have Happened Immediate response to claim Tes;ng of all sample of all products to confirm claims Tracking of all produc;on dates to confirm factory. Inves;ga;on at factories and quality control Issue press release, key statements: 1. We are concerned 2. We are taking this seriously 3. We will own this process 4. Contact number of ques;ons TesAng: 1. Internal and external analysis ProducAon Details: 1. Need to confirm source of any issues 2. Stop all produc;on Quality tesang: 1. Tes;ng of all products 2. Review of factory lines and supplier materials

5 What Should have Happened Tes;ng of batches of all recalled products Select samples of all recalled products Conduct external and internal tes;ng If no lead/msg If lead and/or MSG found, release found, stop all results to public and produc;on gov t Inves;gate Manage source of Communica;ons all materials Find source of issue Rec;fy issues, complete tes;ng, comply with gov t Manage Communica;ons

6 Key Issues Customer trust/sa;sfac;on Compe;tor Reac;on Loss of Sales Social Contracts

7 Key ObjecAves q Regain consumer trust q Respond to compe;tors q Regain sales q Social Contracts Sa;sfied

8 RecommendaAon Nestle should face challenge head on, and undertake communica;on strategy and quality control ini;a;ve.

9 AssumpAons Internally made Noodles No illnesses resul;ng from crisis

10 NIL Revenue ( ) 120 Revenue (Billion R s) Revenue NIL revenue performing well

11 NIL Revenue Profit ( ) Revenue Profit March June December March June Recent perceived quality issues affec;ng performance

12 How to approach the market Mimic Maple Leafs/Tylenol strategy 1. Apology 2. Make changes to the process, directly address issue 3. Adver;se and communicate change

13 AlternaAves 1 Pull out of India market 2 Re- brand product 3 Face challenge head- on

14 AlternaAve One: Pull out of market - Cut losses - Minimize impact on other fac;ons of business - Loss of revenues and customers - Indicates guilt - Doesn t address social contract - Impact on Nestle India overall

15 AlternaAve Two: Re- brand - Cost efficient - Timely - Doesn t fulfill social contract - Need to build new brand - Associa;ons with old brand - Doesn t address underlying issues - No guaranteed market penetra;on

16 AlternaAve Three: Face challenge head on - Re- gains customer trust - Fulfillment of social contract - Capitalizes on long history - Addresses compe;;ve challenges - Most expensive op;on - Time- intensive

17 Decision Matrix Consumer trust and saasfacaon Addresses compeators Increases sales Social contract fulfillment Pull out of market Re- brand Face head- on

18 RecommendaAon Nestle should face challenge head on, and undertake communica;on strategy and quality control ini;a;ve.

19 ImplementaAon Plan Immediate (0-6 months) Communica;ons plan around owning the issues Quality tes;ng Medium to long Term (6 months) Launch of larger marke;ng plan ISO Cer;fica;on process

20 CommunicaAons Plan CommunicaAons Plan Constant communica;ons Response to customer concerns Script to all employees with Q&A What you can and cannot say How to report incidences Daily updates on quality tes;ng 24/7 Social media presence Personal responses from senior management

21 Quality Management Nestle officials from interna;onal organiza;on Audits of all suppliers Tes;ng of all products

22 Quality System ISO 9001 Cer;fica;on Process Launch of ISO process Impact over supplier processes Will ensure quality processes in place to avoid future crisis

23 MarkeAng Plan Key Messages: We lost your trust and we will earn it back Message delivered by NIL President Footage Depic;ng history in India Quality systems Employees

24 MarkeAng Plan Free Samples at key events with target markets Universi;es Transit centers Shopping centers Target compe;;ve brand shoppers, busy moms and bachelors

25 Financials Costs Millions of Ruppees Marke;ng PR 1,800 Legal Services 1,200 Quality Control 525 Total 2,725 Assuming five factories

26 Where does the money come from Internal funding Interna;onal Nestle family

27 Risks and MiAgaAons Risks Level MiAgaAons Con;nued gov t ban Medium Long rela;onship with gov t Willingness to comply Rejec;on by public Medium History and nostalgia Marke;ng Further posi;ve tests for lead Low Quality control process

28 Conclusion q Regain consumer trust q Respond to compe;tors q Regain sales q Social Contracts Sa;sfied

29 What good looks like

30 Memorial University of Newfoundland Thank you Ques;ons Edge Consul;ng