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Case: Nestlé’s Infant Formulas Killing Babies

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Presentation on theme: "Case: Nestlé’s Infant Formulas Killing Babies"— Presentation transcript:

1 Case: Nestlé’s Infant Formulas Killing Babies
By: Insert name

2 Introduction Nestlé's Baby Killing Formula Nestlé's Values
Nestlé's Strategy Issues in the Case S.W.O.T. analysis Recommendations

3 Story Begins Early 1970s, rumors about powdered infant formula were causing the high infant mortality rate. The company denies all accusations. They said that the reason is caused by the people unable to read instructions or use the product properly in the developing countries.

4 The Baby Killer 1974, a British organization, War on Want, published a 28-page pamphlet, The Baby Killer. It criticized Nestlé and Unigate for engaging ill-advised effort in Africa. The general public is concerned.

5 Attention From Public A German Third World Working group reissued and revised a German translation of The Baby Killer. In this version, it is focused on Nestlé and its “unethical and immoral behavior”. Later, it is renamed to Nestlé kills babies.

6 Nestlé’s Action The executives of Nestlé’s sued the activists for defamation. The lawsuit last 2 years, but Nestlé won in the end. “We won the legal case, but it was a public-relations disaster. Now more people know about the problems with Nestlé’s baby formula.

7 The situation In April 1977, the Columbian General Hospital encountered an increase in deaths in the premature ward. The bacteria was traced back to a Nestlé factory, but 25 deaths occurred before the cause was found. Also in 1977, the Austrian Department of health reported that 134 infants had fallen seriously ill as a result of being fed contaminated infant milk formulas produced by Nestlé.

8 The Cause In 1976, The Nestlé Tongala plant found cracks in the spray drier used to turn liquid milk into powdered form. As a result, bacteria was found in the samples of infant milk powder. The state Department was not informed and Nestlé continued to sterilize the equipment without halting production. The drier was kept in operation for full 8 MONTHES after contamination was found.

9 The Boycott In July 1977, a boycott was organized in the United States and soon spread to other nations, It was named INFACT. The boycott lasted until January 26, 1982. They demand: 1. Stop all together the use of milk nurses. 2. Stop distributing free samples. 3. Stop promoting infant formula to the health care industry. 4. Stop consumer promotion and advertising of infant formula.

10 Nestles Values Nestlé USA's core values are the principles we want to characterize our culture. People People from all diverse backgrounds are our most important asset and the source of our competitive advantage. We operate in teams where we expect and reward responsible risk taking.

11 Nestles Values -Quality
-We are dedicated to continuous improvement in the food safety and quality of every product we make and in every activity we perform.

12 Nestles Values Brands Consumers
Our strong brands ensure the continuity of our growth and profitability. Their support is every associate's responsibility Consumers Our reason for being is to understand, anticipate and best fulfill our consumers' needs We appreciate and support the critical role our customers play in getting our brands to the consumer while working closely together to achieve mutual value.

13 Nestles Values Performance Source: Nestlé
Exceed total Company High Performance Targets (HPT's) for RIG, Organic Growth and EBITA. Source: Nestlé *Nestle utilizes these core values rather then a mission statement*

14 Strategy Since the company isn’t allowed to market their product due to the demands of INFACT the only reasonable thing left to do is pay extra for shelf spacing and placement in suggested retail stores Educate retail employee about their product.

15 Issues in the Case ACTION -Poor Judgment CAUSE
Nestle would always state claims that they had nothing to do with the baby killings The company would not present itself in meetings while the International Baby Food Action Network (IBFAN) was present as well.

16 Issues in the Case ACTION - Not facing the problem head on CAUSE
Nestle would come up with lame excuses. Nestle would blame the people They said that women in the developing countries are NOT following the instructions for the baby formula

17 Issues in the Case ACTION - Prolonging the Problem CAUSE -The Boycotts
-Their Slogan was to “Crunch Nestle” -20 different countries Articles The Baby killer Nestle kills babies

18 Issues in the Case ACTION - Not having a quick positive reaction CAUSE
Nestle didn’t make the changes for World Health Organization's (WHO) Did not try to change public relations Nestle vs Germany

19 S W O T Analysis Strengths Weaknesses Opportunities Threats
A Giant Worldwide Corporation, with sales of $12.5 Billion Controls extensive interests in the food and cosmetic industries. Poor management teams, didn’t respond quick enough. Expanding product, growing market. Competition, losing trust of the customers, bad management. Strengths Weaknesses Opportunities Threats

20 Recommendations Take the product off the shelf
Apologize to the people in public Find solutions quickly

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