Case Study of Snow Band Essay example

2490 Words Oct 5th, 2010 10 Pages
Snow Brand Milk Products

‘Crisis or Opportunity?’

- Time for Corporate Revitalization

Hong Kong Baptist University

10 June 2010

Contents

|1. |Executive Summary |1 |
|2. |Problem Identification |2 |
|3. |Analysis |2 |
|4. |Alternatives |4 |
|5. |Recommendation |5 |
|6. |Implementation
…show more content…
SBM’s bottom line was also seriously affected, reporting pretax losses of JPY 58.6 billion. In the mean time, the company dropped off the Fortune Global 500 list. By August 2002, a few months after the beef mislabeling scandal, SBM share prices had fallen 70% from its pre-scandal days, and Moody’s Investors Services downgraded its credit rating to B2.

Various stakeholders of SBM were gravely affected. The management was impaired as the president and CEO as well as the entire board of directors resigned. Layoffs had taken place due to the financial losses and closure of plants. Customer health was seriously threatened. Independent milk distribution companies were hard hit owing to contractual single brand distribution and consumer outrage.

In view of the avalanche of crisis incidents, what SBM imminently faced was a reputation crisis which was closely intertwined with financial losses because of the plummeted public trust. Yet below the tip of this iceberg lay the fundamental issues of leadership, conservative management and eroded corporate values.

Analysis

External Analysis: ← Political and legal factors 1. The Japanese government tightened regulations to ensure the safety of food and protect consumer health, causing stricter sanitation and labeling requirements. The Japanese Fair Trade Commission extended its guidelines on retailers’ beef labeling to also cover wholesalers, and a food

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