Product-Harm Crisis

Natural and unnatural occurrences are the factors that are responsible for the cause of the product-harm crisis. Natural phenomena are those, which are not under the control of the supply chain. They include wildfires, hurricanes, floods, storms, etc. Unnatural conditions can further be divided into; intentional and unexpected occurrences. Intentional ones are those, which arise out of negligence while unintentional ones are accidental circumstances. An example of an unnatural but intentional occurrence is the Volkswagen (VW) rigging of emission test scandal. Tampering or manipulating the results of the emission test allowed Volkswagen to keep down engine costs in a "clean diesel" strategy that was popular in Europe and at the heart of a drive to improve U.S. results (Reuters Volkswagen scandal article Sep 30th 2015)

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The most recent case study on product harm crisis is the incident that occurred in General Motors (GM). In this case, the company had to recall more than 800,000 small cars due to the ignition switches, which were faulty (GM, 2016). As a result, the company recalled the cars in February 2014 to prevent further harm. Despite that, GM faced a lot of outrage from the owners of the faulty vehicles, the media, and the public. To make amends for its mistake, the company settled a debt of $900 million and the debt accrued from the expenses of the investigation the Department of Justice carried out. Apart from that, it also devised other mechanisms that helped restore their reputation (Hays, Tom; Krisher, Tom (September 17, 2015)

The second article that touched on product harm crisis is that of Zhao et al. (2011), and which shows how product harm crisis causes negative brand publicity as well as brand crisis. In this article, the US Consumer Product Safety Commission had initiated a recall of products because they were harmful to the consumers. In this article, the author put special emphasis on the advantage that a recalled brand will give to other competing brands. However, to build the trust, the manufacturer has to take measures to maintain it. To handle product harm crisis, applications of quick and decisive measure must come from manufacturing company. At this moment, all stakeholders of the organization should meet urgently and formulate the contingency measures that will repair the damaged reputation of the company. In this regard, the management should evaluate the best methods that can restore the business to its original position without infringing on the values of the enterprise. Assess to the product in crisis is required, make a decision to recall it, establish where it all went wrong, and finally, formulate measures that reduce the crisis without losing many profits. This way the restoration of customers is complete and the companies will most likely pick up and prosper.

Reference

GM.(2015) about our company: Retrieved May 22th, 2016. http://www.gm.com/company/aboutGM/our_company.html

Yannopoulu, N., Koronis, E., & Elliot, R. (2011). Media amplification of a brand crisis and its effects on brand trust. Journal of Marketing Management, 27(5/6), Zhao. Y., Zhao, Y., & Helsen , K. (2011). Consumer learning in a turbulent market environment: Modeling consumer choice dynamics after a product-harm crisis. Journal of Marketing Research, 48(2).

Reuters Volkswagen scandal article (Sep 30th 2015) http://www.reuters.com/article/us-volkswagen-emissions-lawsuit