Snow Brand Milk Products Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Question 1. What do you think are the underlying causes of the two SBM scandals?

ANSWER: 1.

Snow Brand Milk Products wasa renowned company operating in Japan for Past 80 years and developed its trust into its consumers. This trust was broken when SBM was involved in the Scandals such as:

Low-fat Milk Contamination Scandal

Bed Mislabeling Scandal

1. LOW-FAT MILK CONTAMINATION SCANDAL

In the month of June 2000, SBM was involved in the scandal in which more than 13,400 people were suffering from food poisoning. The food poisoning complaints were recorded more than one authoritative department that led this food poisoning at a bigger level. It was confirmed that this incident of food poisoning was recorded because of the SBM’s low –fat milk beverage. This beverage contains the bacteria called staphylococcus thatspread into general public via the SBM’s product.

The incident occurred due to the following reasons:

a. Improper maintenance of valves:

In first reports it was unclear that how this product of SBM contaminated, but when investigations were held, it clears that food poisoning was reported because of the improper maintenance of the valve through which milk was passed. This incident occurred in one of the SBM’s factories located in the Osaka, where valve maintenance was previously done on a weekly basis, but at the time of this incident the valves were not properly maintained forthe pastone month. This improper or negligence in the maintenance of the valves led to this Food poisoning incident.

b. Fault in factory’s electric supply:

Another reason of the food poisoning was the contamination of the skim milk powder that was produced in Taiki Plant and later on it was transported to the Osaka Plant where it was further processed. Further contamination was occurring during the snowfalland it freezes the rain on the roof of the factory and when this freeze rainwas dripping from the roof, itcuts the electricity wire that wasproviding the electricity to the chiller. The chillers were stopped just before the 800 liters of milk was recovered from the pipeline.This shortfall was restored after taking eight hours and during this timebacteria in the milk were already increasedand this increased bacteria wereenough to create the enterotoxin that led to the food poisoning.

c. Lack of centralized complaints structure:

This incident was also spread at large scale because of the lack of centralized infrastructure.It was because if there were any centralized infrastructure for this kind of incident than at its initial stage it was possible to stop it when the food poisoning report wasreported first time. The company could be acknowledged about this report and the production of this contaminated milk could be stopped at that point of time.

2. BED MISLABELING SCANDAL

The second scandal in which SBM was involved occurred when there was the Bovine Spongiform Encephalopathy, also known as BSE or Mad Cow Diseasein the Japan’s territory that was reported in the year 2001. This disease was related to cow’s meet in which cow gets the disease and later on when people bought beef related products, that disease made the people ill.

During this year, Japan’s beef industry’s sales were drastically reduced that led the beef industry’s giants to involve in the scandal known as Bed relabeling. In this scandal, SBM’s involvement was recorded due to the following reasons.

a. Buyback Assistance Program:

During the year 2001, when there was Bovine Spongiform Encephalopathy disease in the Japan, the government of Japan has taken a step to assist its beef industry through giving the industry subsidiary. To avail this subsidiary, SBM was involved in importing the disease free beef products from other countries. The foreign products were sold at discount prices and it was because of the preference given to Japanese products against foreign products. These foreign products were cheaper in prices, and Japanese products were sold at premium prices this preference of the products led to the relabeling of the products under the Japanese product names.

Question 2. If you had become the CEO of SBM, what kind of revitalization program would you have implemented? Explain the rationale for each initiate.

ANSWER: 2.

As a CEO of Snow Brand Milk Products, the revitalization program that could help in terms of reviving the company back onto its position are such as:

Defining the Core Values:

Improving the Quality......................

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