Answer 1:

The Maggi Ban was caused by the external environmental changes as explained below:

1. General Environment:
a. Sociocultural Component: The news about the presence of lead in the Maggi broke the belief of
customers in the product. The product that was once the favorite instant food for all classes of the
society, be it at any place from home, to mountain treks, to offices, the trust was lost. For 80% of
India’s noodle market that was ruled by Maggi, people’s beliefs changed when it considered the
health of their loved ones. They stopped using the product and the sales were drastically reduced.
b. Political/Legal Component: The routine audit of the product by food inspector Sanjay Singh and his
curiosity to analyze the package for the presence of MSG (monosodium glutamate) was one of the
major reasons that cause the Maggi ban. Presence of MSG even when the package claimed “no
added MSG (monosodium glutamate)” was a punishable offense. Also, the presence of 17.2ppm
Lead, which was over 1000 times more than claimed by Nestle India Ltd. also was a legal violation.
2. Specific Environment:
a. Industry Regulation Component: As per the Food Safety and Standards Authority of India (FSSAI),
the food-related regulatory organization, the presence of MSG and Lead was not accepted as per the
defined regulations. Hence, the 38000 tons of Maggi noodles were recalled from the retail stores
and destroyed.

To conclude, all the above factors resulted in a great economic loss for Maggi.

Answer 2:

Yes, effective environmental scanning and interpretation could have helped Maggi to grasp the situation beforehand
and take preventive actions. Below are suggested ways:

 Focus on the quality of the product

 Continuous inspection and internal auditing to monitor the final output of the product to identify the
presence of the chemicals sooner
 Maintaining the standard of the product with respect to defined regulations by government regulatory
bodies for healthy consumption
 Ensuring that the customer’s beliefs are not hindered
 Focus on increasing the market of other products than relying on one single product over a huge population
 Analysis of customer needs and supplying appropriate products
 Keeping the quality of product at the check when the competitors are building up a market
 Not ignoring the external and internal factors at a whole level even when the claim was made

To conclude, if a proper analysis was performed and effective management was implemented instead of ignoring
and leaving the market completely loose, Maggi could have gauged the depth of the crisis and prevented the ban.

Answer 3:

SWOT Analysis, although an easy way to do strategic planning, does not consider all factors that might help in
making the right decisions. It is too structured to consider weaknesses as opportunities or strengths at some point in
time. Also, too much information in one place ignores the most important aspects of decision making at some point.

On the other hand, the VRIN method focuses more on the newness and value of a product. With respect to Maggi,
SWOT won’t have helped as an effective decision-making strategy. But the VRIN method would have helped in –

 analyzing the value of the product with respect to growing customers,

 keeping in check the rarity of the product with respect to new competitors in the market,
 focus on other products as well for growth knowing the imitability of the product, and
  analyzing that the product is not non-substitutable when it comes to the noodles market.

VRIN method would have helped Maggi to identify market trends better. They could have made effective decisions
to grow their markets with respect to other products as well and take steps sooner. It would have helped them to
plan better. Although, Maggi ruled 80% of the noodle market, yet there were other competitors rising rapidly. The
product was never imitable or non-substitutable, no rarer, and the value of the product was no more competitive
advantage.

To conclude, VRIN is a better way of analyzing the existence of the product in a market than SWOT analysis.

Answer 4:

To gauge the crisis beforehand and avoid such issues in the future, Maggi can use the below mentioned
Management Principle(s):

1. Balancing Authority and Responsibility: Correct implementation of authority and taking appropriate
responsibilities will keep the quality of the product in check. It will help in effective monitoring of the final
products. A proper balance between the authority and its responsibilities will make sure that corrective actions
are taken before anything goes wrong.
2. Discipline: Following rules and regulations within the organization as well as looking for the appropriate
regulatory measures will help in keeping in check the quality of the product. If there is a sense of responsibility
to follow the rules, then such a crisis can be prevented in the future.
3. Unity of Direction: A proper planning to have a single focus i.e., maintaining the quality of product at all cost,
since it is to be consumed by other humans, will help in effective generation and growth. This will help in
appropriate pricing with the equivalent quality of the product.
4. Order: The production environment should be in order (Material order). An orderly placement of resources will
lead to effective development.
5. Initiative: Initiatives taken by employees in the organization to work on developing a healthy food product will
help in stopping such a crisis in the future. Since the producers and their families will eventually be the
consumers of the product, proper motivation to employees will help in developing a quality product.

To conclude, the above mentioned are some of the effective management principles that can help Maggi to prevent
such catastrophe in the future.