October 20, 2012 by NewsReputation
This case study is a classic in the world of corporate crisis management. I have decided to bring it today because it shows how a good ethical conduct can save a company from sinking in moments of crisis.
In 1982 Tylenol controlled about 35% of US painkiller market. In that same year, seven people died from cyanide poisoning after taking Tylenol. Rumors occurred about how the meds had been removed from the shelves, poisoned and put back there. Media were divided whether Johnson&Johnson was guilty or just a mere victim of this situation. But the fact is: as soon as the press associated Tylenol to those deaths, its market share dropped drastically to 7%.
What made J&J’s response so effective was their quickness. They reacted immediately, removing Tylenol from the whole US market, not only in Chicago (the affected region), with a loss of $50 million dollars. They also called off all Tylenol advertisements.
Even knowing they were not responsible for the incident, they assumed whole responsibility and showed people how they were working hard in finding a solution.