Quiz3 (1)

Justin Benedict

Quiz 3: Snow Brand Milk Based on the five crisis stages that are detection, prevention/preparation, containment, recovery, and learning (Fearn-Banks, 2002), what should Snow Brand have done with regard to the incident and what should they do in the future?

The first stage of crisis is detection. Regarding the Snow Brand, this company did not have the internal structure necessary to detect the issue in the required amount of time. This is in part due to lack of oversight and communication within the company as well as the presence of a stagnant, collectivist corporate culture that deterred employees of all levels from speaking out against issues, especially when involving someone in a higher position. These issues resulted in President Ishikawa’s not being notified about the Osaka Plant incident until two days after the first cases of Staphylococcus, as well as his absence in important meetings including the June 29th meeting resulting in a voluntary recall. Snow Brand should have implemented an extensive monitoring system for all facilities, especially following such significant national expansion.

Snow Brand should have conducted quarterly maintenance, safety and sanitation audits to ensure that any contamination issue would be detected immediately. Snow Brand should have also made a public commitment to be a leader in these categories in the Japanese market, building partnerships and a corporate culture that backs this commitment. Snow Brand should have also offered bonuses or pay raises to any employee that detects and communicates any contamination issue. Snow Brand could even create a new oversight position chiefly for monitoring any potential contamination.

The second stage of crisis is prevention/preparation. Regarding Snow Brand, there were virtually no preventative measures in place, and the company as a whole was unprepared for an incident of this magnitude to occur. Regarding prevention, an internal communication system that incentivized speaking out against unacceptable practices should have been in place. This should have been further backed by clear corporate values. If issues at the Osaka Plant had been communicated to President Ishikawa immediately, a lot of the food poisoning cases could have been prevented. Snow Brand was also unprepared to address a widespread contamination issue like this. While a crisis management plan was in place as a resource for the brand, it was an inadequate and outdated one. Snow Brand should have updated this plan much sooner and on a regular basis. The best plan in a crisis situation is a proactive one, and Snow Brand suffered from a reactive plan.

The third stage of crisis is containment. Regarding Snow Brand, this company did not communicate internally or externally in a timely in an effective manner necessary to minimize the impact of the food poisoning. Lack of internal monitoring resulted in the company not making the connection between the Osaka Plant and the Tokyo plant. The production and

operation processes were not understood by the organization. With almost a dozen press conferences and statements being made between the initial outbreak and July 4th, there were many conflicting and unprofessional statements. This resulted in the public taking control of the conversation being had about Snow Brand and the dissemination of a lot of un-credible, inaccurate information, perpetuating the confusion between the brand and the public, as well as anger towards the brand. In this incident, Snow Brand should have held a corporate-wide meeting when Staphylococcus was first detected at the Osaka plant, with all executive level employees present, especially president Ishikawa. This meeting should have worked out adaptations to the Crisis Management plan that Snow Brand had as a resource in an effort to make it implementable to the current incident. This newly refined plan, as well as a summary of this meeting, should have been communicated to the public through an official press conference immediately following the meeting and provided the basis for all subsequent press conferences and statements made. Furthermore, Snow Brand should have conducted large scale research with the help of external agencies into the source of the Staphylococcus immediately following the initial outbreak. This may have resulted in a better, more timely understanding of the severity of the issue as the source of the issue. In addition, a voluntary recall of all milk-related products should have been initiated immediately following the first cases of food poisoning.

The fourth stage of crisis is recovery. Regarding Snow Brand, this company should have acted with transparency and social responsibility during recovery efforts. Snow Brand should have committed resources to researching and developing new manufacturing processes to ensure that future contaminations will be better contained. New safety and sanitation procedures should have been put into place immediately in which every production and distribution facility would be inspected on a quarterly basis. Furthermore, any employee found to have contributed to the incident as well as any cover-up of sanitation or safety issues should have been terminated immediately. A new, extensive training process should have been implemented, with a focus on building a corporate culture that incentivizes speaking out against internal issues.

These actions should have been communicated with complete transparency on all the brand’s owned media outlets as well as all major media outlets in Japan. Snow Brand should have also created a digital space for the public to voice concerns, ask questions and contribute to the restructuring and development of the brand.

The fifth stage of crisis is learning. Regarding Snow Brand, this company has much to learn from the Staphylococcus outbreak. While Snow Brand can learn from every step of the incident, most learning will come from long-term restructuring and initiatives. Snow Brand should lead longterm research and development efforts to create products that are safer, more reliable, more socially conscious and better fulfill the needs of the consumer. Long-term partnerships with dairy-focused organizations will help create a better brand image, and realign the company with the local dairy farmers which the brand has become distanced from. The original USP of Snow Brand was purity achieved by close relationships with local Japanese dairy farmers. If Snow Brand should learn anything from this process, it is that sacrificing the core principle that brought initial brand equity and formed the basis for corporate culture, in an effort to increase sales and market share in not only unethical but also unprofitable.