Crisis Management: Dealing with a Product Crisis

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Case Details:

Case Code : MKTG182
Case Length : 11 Pages
Period : 2006-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : Nokia Corporation; Bausch & Lomb; Mattel Inc.
Industry : Telecom; Eye Care; Toys
Countries : Europe, USA, Asia

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Caselet 2: Bausch & Lomb's Moistureloc Crisis

"They (B&L) couldn't have done a worse job. It's almost as if they looked at the handbook on crisis management and threw it out the window."¹⁵

- Paul Argenti, Professor of Corporate Communications, Dartmouth College's Tuck School of Business¹⁶ , in April 2006.

"If there was something we could go back and change that would be it [recall ReNu with MoistureLoc when links between the lens cleaner and the fungus was first suggested]. There isn't a handbook you can go to that tells you exactly what to do here." ¹⁷

- Meg Graham, Spokesperson, Bausch & Lomb, Inc.¹⁸, in May 2006.

On May 15, 2006, Bausch & Lomb, Inc. (B&L), a leading eye care company, voluntarily recalled its contact lens care¹⁹ brand, ReNu with MoistureLoc Multipurpose solution (MoistureLoc). MoistureLoc was linked to a potentially blinding fungal eye infection, Fusarium keratitis (keratitis), and the company drew a lot of flak from consumers, medical specialists as well as crisis management experts for not recalling the product earlier.

The apparent link between MoistureLoc and keratitis first surfaced in Asia in 2005. Such cases began to be observed in the US too, and this attracted the attention of th#20]e US Centers for Disease Control and Prevention²⁰ (CDC) and the US Food and Drug Administration (FDA).

It was found that a disproportionate number of people who had contacted the eye infection had been using MoistureLoc. On April 10, 2006, following an FDA alert on the product, B&L temporarily suspended the US shipments of MoistureLoc. Four days later, the company asked retailers to stop selling MoistureLoc, but not before the retailers themselves had pulled the brand off the shelves, which resulted in bad publicity for B&L...

Exhibits

Exhibit IV: B&L's Share Price Movement over a One Year Period
Exhibit V: B&L's Net Sales: By Product Categories (Unaudited)

Caselet 3: Mattel's Voluntary Safety Recall - Next Page>>

15] "Bausch & Lomb Withdraws Lens Cleaner from U.S. Market (Update2)," www.bloomberg.com, April 13, 2006.

16] Darmouth College, located at Hanover, New Hampshire, USA, is a private academic institution. Founded in 1769, it is a member of the Ivy League.

17] "Bausch & Lomb Reeling from Lens Solution Eye Fungus Link," www.foxnews.com, May 19, 2006.

18] Bausch & Lomb, Inc., based in Rochester, New York, USA, is a leading eye health products company. It was founded in 1853.

19] A contact lens is a corrective, cosmetic, or therapeutic lens usually placed on the cornea of the eye. Lens care products consist of various solutions designed to clean, sterilize, and store contact lenses.

20] The Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, USA, is recognized as the leading US agency for protecting public health and the safety of people. The CDC provides credible information to enhance health decisions and promotes health through strong partnerships with state health departments and other organizations.


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