A Matter of Trust: Johnson & Johnson Product Recalls
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Case Code: BSTR393 Case Length: 18 Pages Period: 2010-2011 Pub Date: 2011 Teaching Note: Available |
Price: Rs.400 Organization: Johnson & Johnson Industry: Healthcare Countries: US Themes: Project Finance Crisis Management , Corporate Social Responsibility |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Crisis
Based on the FDA's reports alleging lapses and misconduct at J&J, the matter was taken up by the House Committee on Oversight and Government Reform (HCOGR) of the US Congress. FDA testified that MNCH had quality problems with one of its products which J&J had discovered in 2008 itself. It further stated that the company had reported the problem to FDA only after a significant delay in 2009...
The "Phantom Recall"
Product recalls were not a new phenomenon either in the pharmaceutical industry or in J&J. In fact, J&J had an exemplary track record in managing such crises in the past which had built consumer confidence in the company, making it an enviable brand. But this time around, it was the nature of the initial recalls, the delay in the formal recalls, the prolonged series of recalls, and the FDA finding multiple lapses in the manufacturing and quality control processes which brought to the issue a significantly high level of attention from society, the regulator, as the well as the governing and supervisory bodies...
J&J Crisis (1982): The Gold Standard in Brand Crisis Management
This was not the first time that J&J had faced a major product quality related crisis. A major Tylenol tragedy had occurred in 1982 as well. In September 1982 , seven people died in the Chicago area after reportedly ingesting Tylenol pain relief capsules. Investigations found that the medicine had been laced with potassium cyanide. In an immediate response, J&J recalled all of the estimated 31 million bottles of Tylenol products that were in circulation, on October 5, 1982...
J&J Crisis (2010): Crisis in Brand Crisis Management
The troubled waters at J&J had started to become evident much in 2008 when J&J the company found that some batches of its painkiller Motrin were not dissolving in water as they were supposed to. The company halted distribution of Motrin and told the FDA that it would conduct random checks of retailers' shelves to confirm if the problem required a product recall...
A Matter of Trust
Pharmaceutical companies' superior quality which brings the life critical customer confidence to products has been their major success factor. It was on this major count that J&J was alleged to have failed. For the many customers who had been paying premium prices for J&J products throughout their lives and had depended on this long trusted brand to deliver health products and medicines they could use with complete confidence, it meant a loss of confidence in the company...
Exhibits
Exhibit I: Important Events in the History of J&J
Exhibit II: Leading Rewards and Recognition
Exhibit III: Principal Competitors, Subsidiaries and Operating Groups of J&J
Exhibit IV: Major Consumer Brands under J&J Group
Exhibit V: List of Significant Developments at J&J Since Phantom Product Recall
Exhibit VI: Abstracts from J&J's Quarterly Financial Reports
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