Odwalla Case Essay
Odwalla Incorporate is known for high quality products and it takes pride in the way the juices are made. However, with E. coli crisis it has become extremely difficult to maintain that standard unless Odwalla designs a proper strategy to counter the effect. I will help you design a communication strategy for each stakeholder to emerge from this crisis, regain loyalty and improve brand image.
Odwalla must take full ownership of this crisis and communicate to its stakeholders about the recall process, quality assurance policies and steps taken to resolve the issue. The timing and the process is extremely important to communicate effectively. Below are the list of key issues and the communication strategies for each stakeholder that will help get through this crisis.
Some of the key issues that Odwalla face because of the E. coli breakout are:
•Determining communication strategy to respond in the crisis •Identifying pasteurizing methods to maintain the same taste and quality •Maintaining current core competency – use of minimal production processes to deliver superior taste and nutritional values •Researching side effects of adding chlorine, as suggested by a quality assurance manager •Identifying ways to provide safe products in future
•Identifying ways to maintain the customer loyalty
•Identifying strategy to regain stakeholders’ faith
•Handling lawsuits from affected consumers
These issues will affect the company’s future business operations. Therefore, Odwalla must take immediate action to contain the breakout and find solution to avoid re-occurrence in future.
COMMUNICATION STRATEGIES FOR EACH STAKEHOLDER
Odwalla must communicate with all of its stakeholders. The following are the communication strategies for the nine most important Odwalla stakeholders – the affected customers, the public, the employees, the crisis management committee, the distributors, the retailers, the suppliers, the officials, and the shareholders/investors.
•Apologize immediately and take full responsibility for the crisis to the affected consumers by contacting them by phone or paying a visit •Guarantee appropriate measures will be taken to fix the issue •Send condolences letters to all consumers who are affected by consuming the Odwalla juice and compensate them for medical costs and hardship
•Launch TV, Radio and Internet advertisements to inform everybody about the crisis and seek apology •Regain consumer’s confidence by assuring that this issue will be resolved soon •Arrange factory tours for public assurance
•Call in for all-employee meeting to explain the crisis and ask employees for ideas to pasteurize the products by maintaining same taste •Send out a memo to all employees requesting them to contact crisis management committee with ideas and inquiries •Instruct all employees to direct any questions or inquiries from media to Internal communication department
Crisis management committee
•Identify the batch numbers of the affected products
•Quarantine all the affected products
•Develop the recovery plan and review with officials before implementation
•Send memos to distributors with batch numbers and ask them to recall the products and freeze any supply going to the retailer •Tell distributors to dispose all the products matching the batch numbers given to them
•Send memos to retailers with batch number and ask them to recall the affected products. •Work with retailers for any customer re-funds requests
•Suspend receiving of all the supplies from the suppliers •Ask suppliers to look for E. coli in their supplies and urge them to take appropriate actions •Discuss with supplier for ideas and methods to avoid any contamination even before the products get to Odwalla facility
•Communicate openly with the health agencies and law officials by cooperating with the investigation process •Explain the recovery plan developed by crisis management committee •Get certified for the process from the health agencies
•Call for immediate Board of director meeting and explain the crisis, recovery plan and cost of fixing the crisis
Odwalla must take immediate action to avoid damage to customer’s confidence level and lose faith in stakeholders. In order to resolve the issue quickly Odwalla must take following important steps:
•Identify the contaminated batch numbers
•Quarantine the contaminated products
•Communicate with all stakeholders
•Find the root-cause of contamination
•Implement the solution from root-cause analysis
•Get approval from health agencies
•Keep consumers updated via advertisements – TV, Radio, Newspapers and Flyers •Organize factory tour for customer satisfaction
Odwalla must communicate immediately by enforcing the communication strategies. The consequences for not communicating effectively are worse and will affect from losing customers to long lawsuits and filing bankruptcy. It will be very challenging to find a solution that will maintain the same taste and not to have pasteurized the products. However, you will find smart and effective ways of communicating with stakeholders in this memo that will not only help Odwalla regain the lost glory but also avoid any adverse implications.
With every Core Competencies, there are rewards and crisis. Odwalla must embrace this crisis as a lesson learned and use this experience to come up with new tools and technologies for production process and live up to its vision:
“Odwalla’s vision has always been to nourish people everywhere with the ineffably honest art and rhythm of nature’s offerings. We live on the principle of respect for our consumers who rely on us for consistent quality in taste and nourishment and respect for the earth on which we rely for holistic nourishment”
I would like you to consider my communication strategies and be calm and patient in handling the crisis. Please feel free to contact me for any questions you may have.