A case study on

“Johnson & Johnson and Exxon Oil Company ”

BY
ASHRUTHA K
[USN: 4TV18MBA02]

Submitted To
Prof. Lakshmi
MASTER OF BUSINESS ADMINISTRATION

Vidyavardhaka Sangha (R), Mysuru

VIDYAVARDHAKA COLLEGE OF ENGINEERING
(Affiliated to VTU and approved by AICTE)
Department of Business Administration
Accredited by NAAC with ‘A’ Grade
PB No 206, Gokulam III Stage, Mysuru - 570 002, Karnataka
2019-2020

Johnson & Johnson Company case study

Johnson & Johnson is an American multinational corporation founded in 1886 that develops
medical devices, pharmaceutical and consumer packaged goods. It is a holding company, which
engages in the research and development, manufacture and sale of products in the health care
field. It operates through the following segments: Consumer, Pharmaceutical, and Medical
Devices. The Consumer segment includes products used in the baby care, oral care, beauty, over-
the-counter pharmaceutical, women's health, and wound care markets. The Pharmaceutical
segment focuses on therapeutic areas such as immunology, infectious diseases ad vaccines,
neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The
Medical Devices segment offers products used in the orthopedic, surgery, cardiovascular,
diabetes care, and eye health fields.

Crisis need not strike a company purely as a result of its own negligence or misadventure.
Often, a situation is created which cannot be blamed on the company - but the company
finds out pretty quickly that it takes a huge amount of blame if it fumbles the ball in its
response. One of the classic tales of how a company can get it right is that of Johnson &
Johnson, and the company's response to the Tylenol poisoning.

In 1982, Johnson & Johnson's Tylenol medication commanded 35 per cent of the US over-
the-counter analgesic market - representing something like 15 per cent of the company's
profits. Unfortunately, at that point one individual succeeded in lacing the drug with
cyanide. Seven people died as a result, and a widespread panic ensued about how
widespread the contamination might be. By the end of the episode, everyone knew that
Tylenol was associated with the scare. The company’s market value fell by $1bn as a result.
When the same situation happened in 1986, the company had learned its lessons well. It
acted quickly – ordering that Tylenol should be recalled from every outlet – not just those in
the state where it had been tampered with. Not only that, but the company decided the
product would not be re-established on the shelves until something had been done to provide
better product protection. As a result, Johnson & Johnson developed the tamperproof
packaging that would make it much more difficult for a similar incident to occur in future.

Effects on Johnson & Johnson Company

  In 1982 Tylenol was covering the 37% of market share with revenue of 1.2billion.
 After this incidents market share reduced to 7%.
 In 1982 , Tylenol leading painkiller sold by J&J was tempered with cyanide and 7 people
died in US.
 Reported that a unknown suspect put 65 milligram cyanide into Tylenol capsule.

Measures: (Proactive approach)

 Reintroduced the product with triple seal temper resistant packaging
 Offered a $2.50 off coupon and the purchase of their products. They were available on
news papers and toll free numbers.
 25% off the purchase of product to recover the loss in stock crisis.
 2250 sales people made presentation for the medical community to restore trust on the
product.
 They acted quickly, with complete openness about what had happened, and
immediately sought to remove any source of danger based on the worst case
scenario - not waiting for evidence to see whether the contamination might be more
widespread.

Conclusion
 Having acted quickly, they then sought to ensure that measures were taken which
would prevent as far as possible a recurrence of the problem
 They showed themselves to be prepared to bear the short term cost in the name of
consumer safety. That more than anything else established a basis for trust with their
customers.
 Avoid crisis in the first place.
 Quickly address and resolve before they escalate.
 Seek possible ways to turn your crisis into an opportunity.

Exxon Oil Company case study

ExxonMobil ranked number one in 2011 in America’s largest corporations by Fortune 500
magazine. Ranked globally number three by the Fortune Global 500, the company saw profits of
$41.1 billion and revenues of $452.9 billion in 2011. It is the largest company in the world by
revenue. When the Valdez oil spill took place in 1989, Exxon (before the 1999 merger with
Mobil) was one of the five largest companies in the United States. They had sales of $80 billion.
Lawrence G. Rawl was the CEO.

Effects of the case

 EXXON valdez was leaving off the coast and suddenly it hit the submerged rocks.
 The tanker ripped open.
 The hole was too big which was almost the length of the shio.
 Which became the worst oil leak ever.
 It affected the land , sea life and also the economy related.

Measures and approaches which were taken

 The company had a desire to restore normalcy to the area with an immediate focus on
clean-up. ( which actually did not happen ).
 Exxon had no crisis plan or position for a public relations manager in the company.
 After the crisis when Rawl finally issued a statement via television, he focused his
statement on clean-up and made no apologies, which actually damaged the reputation of
the company infront of the public.
 The threats facing Exxon included the loss of customers. 5. Exxon also faced possible
product boycotts and additional governmental sanctions and local civil suits.

MEASURES AND APPROACHES ( REACTIVE APPROACH )

 Extremely late response to the public which damaged the reputation

 No efforts to immediately take away possible threats from the land and sea life which
later affected the economy.
 The approach of addressing the public with the statement to the public was that they
wanted a swift clean-up and later did not keep up became a drawback approach.
 Lately and waiting for the worst to happen or waiting for what could happen was one of
their failure approaches which pulled down the company into great losses in terms of
financial and reputation.
conclusion
 The preparation was not taken according to the rights of the company.
 The company did not maintain a good relationship with the public anywhere in the
scenario.
 Management failed to take corrective actions on time.
 Management failed to appoint proper public relations officers to communicate with the
public.
 Reactive approach towards their problem became their major drawback.