Like the common cold in life, crises come in as many different ways in business. In 1998 Coca – Cola faced a contamination scare in Belgium and finally ended with all products’ recalling and £66 million cost. Despite a 31% drop in profits, other competitors challenged the company’s 49% share of market. Additionally, Coca – Cola had to launch costly, post – crisis advertising and PR campaigns as the majority of media described the company was “struggling to rebuild its reputation”.
Some companies believe their brand power and reputation will protect them from a crisis. Like Coca – Cola, for a long time they could not provide a clear explanation for the cause and only claimed that it was merely a bad odour. So when things went worse they lost both government and public’s trust and had to withdraw all products.
With the help of high technology and the Internet, people are asking for more scrutiny and transparency. It is no doubt now that no company will stay safe from crisis and the possible lasting damage it may cause. And for some big corporation with international awareness, they will lost more in this kind of damage and then spend another years to re-establish their brand images.
Reference:
Regester M. & Larkin J., (2005). Risk Issues and Crisis Management, 3rd Edition. Clays Ltd, St Ives plc, Great Britain.
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