Mid-term assignment – 30%

The mid-term is a written assignment due by midnight on the last day of week 7 where
students will choose a company that they aspire to work for, find a recent (past 4 months)
story about them in the business press that highlights a challenge faced by their management
team and propose a path forward. The assignment should be a maximum of 10 typed, 12-
point font, double-spaced pages. A detailed grading rubric will be posted on Moodle.

Company: Mars
https://www.prevention.com/food-nutrition/a40642766/skittles-unfit-human-consumption-
mars-lawsuit-titanium-dioxide/

Mars is a famous company that manufactures candies, sweets and chocolate.

Intro: Introduction of the problem Mars Incorporated is an American based

is thorough, but concise. Problem
is recent and the introduction
addresses its strategic relevance
and relation to the themes of the
first two modules. (20% 1pg)
https://www.forbes.com/
companies/mars/?
sh=74f1b6653bb7 (about mars
company)
California Resident Sues Skittles
Manufacturer Over 'Unsafe'
Titanium Dioxide Levels (the case
challenge)
Taste the toxin? Skittles ‘unfit for
human consumption’, lawsuit
claims | Food & drink industry |
The Guardian (more about the
case)
Mars Candy Violates its Pledge to
Remove Titanium Dioxide from
multinational food company. One of their most
famous segments is Mars Wrigley, which
manufactures sweets and candies like skittles, m&m
and snickers for example. While Mars is recognized
as one of the largest food companies worldwide, a
recent case shed light on the high titanium dioxide
levels in their skittles product. It’s described as ‘unfit
for human consumption.’ Titanium dioxide is found
in our everyday products such as cosmetics and food.
The pigment enhances the bright colours of skittles
which are used to attract consumers, especially young
children. Though it’s FDA approves, they were
specific that titanium dioxide should never go beyond
1% of the food’s weight. As more research is being
conducted, the European Food Safety Authority
concluded that the additive should be eliminated.
Research proves the substance may cause cancer and
can modify our DNA owing to genotoxicity.
Therefore, skittles are proven to be dangerous for
consumption and titanium dioxide should be ceased
in their manufacturing process.These issues are
known and acknowledged in management. However,
despite the promise to gradually reduce titanium
dioxide levels in their products over the course of 5
years since 2016, this still has not been done. To
make matters worse, consumers are still unaware of
the danger of artificial colouring due to the lack of
Mar’s transparency in ingredients. Packaging fails to
Skittles . (failed legal obligations)
Analysis: Analysis covered five
theories from the readings,
providing both a brief summary of
the reading to show relevance to
the problem, and an application to
the problem. (25%, 4-5 pg)
ESG, ties in with stakeholder
theory, how it creates value for
them, In Social- talk about
‘purpose driven organisation’
employees ned incentives,
currently they are only doing
whats told, but if you really cared
about the work then the toxin
additives would have been
inform consumers about the toxin additive. Not only
is the colour contrast and small font size ineligible for
consumers to read, the packaging says ‘might or
might not contain titanium dioxide.’ Currently, Mars
refuses to comment about the litigation but instead
emphasises that they are operating within the scope of
the law. That is, the titanium dioxide levels are within
FDA guidelines.
This case opens up discussion about Mars ESG
models and stakeholder theory in each step of the
pillars. We discover how purpose driven
organisations are essential to motivate employees to
perform well and address the issue of titanium
dioxide. This brings up the importance of ethical
leadership and the type of decision making systems
needed to make rational decisions. Lastly, Porter's 5
forces is also used to conduct an analysis highlighting
the importance of our stakeholders, especially in
unprecedented situations.
This case closely aligns with our course because it
opens up discussion for environmental, social and
governance (ESG) measures. Particularly about the
lack of transparency with ingredients used for
manufacturing skittles. Mars knew since 2016 that
food colouring was harmful for consumption but they
acted unethically and continued to use titanium
dioxide. This ties into stakeholder theory as ethical
strategies are vital and will ultimately lead to higher
returns.
Environmental, Social and Governance Measures:
Mars sustainability plan highlights a holistic approach
of including the planet, it’s people and overall
wellbeing of those involved.
By addressing these three pillars, it leads to more
future investments by socially conscious investors.
Environment- Mars ‘Sustainable in a Generation
eliminated already.
P5F,
https://www.forbes.com/sites/
deloitte/2022/10/26/how-
businesses-can-and-must-move-
forward-in-a-world-of-scarcity/?
sh=25f811fbd54b
Week 1: Purpose Driven
Organisation
Week 3: ESG
Week 2 : Stakeholder Theory &
Utilitarianism
Week 5: P5F (consumers will go
to competitors)
Supporting a Sustainable Future |
Mars, Incorporated (mars social is
ESG)
Mars and Good Management
Make for Long-Lasting Success |
Prosperity Magazine
https://casemarathon.com/
kelloggs/mars-incorporated/
porters-analysis.php (5 forces)
https://www.case48.com/porter-
case/34690-Mars-Incorporated
Plan’ aims to target ‘Healthy Planet, Thriving People
and Nourishing Well Being.’ To better conserve the
environment, they began sending zero waste to
landfills in order to reduce the mass volumes to
materials that ultimately end up in landfills. Mars
goals to reduce food and waste are currently
implemented in all 126 facilities worldwide.
Additionally, Mars has decreased their Greenhouse
Gas (GHG) emissions by focusing on renewable
energy and energy efficiency in operations. However,
they acknowledge that it’s not enough since a major
portion of their GHG emissions are due to the supply
chain, such as agricultural practices and land changes
used to grow raw materials for production.
Social- Mars has an initiative to build relationships
with their suppliers, specifically smallholder farmers
who play a critical role in their supply chain. Mars
goal was for their extended supply chain workers to
have a proper standard of living. This means paying
higher wages to motivate not only current suppliers
but future generations of small farmers as well.
This year, Mars was recognized as being a top
employer. They financially support workers with
generous pension plans and huge end of the year
bonuses. The workplace is also very diverse and
inclusive.
‘Farmer Income Lab’ was launched in 2018, to help
protect their supply chain workers. It gave insights on
how to cease smallholder poverty.
They raised over $130 million to develop more
sustainable agriculture plans, intended at bettering
income levels, food security and restoring
ecosystems. They have a goal to reach 200,000 farms
through this project all while investing in a
sustainable supply chain.
However, based on ‘Purpose Driven Organisations'
employees are self-interest agents that only fulfil their
contractual agreements. Senior management must
make their employees work meaningful and give a
sense of contributing to a greater good. This can be
done by connecting the people to the purpose.
Leaders who’ve internalised Mars' purpose must help
others to connect the purpose to their daily tasks.
Mars takes strong initiatives to develop and grow
their employees. But they need to create an
environment that encourages their employees to
thrive. It enhances performance levels and allows
employees to take ownership of their work. When this
happens employees will respond immediately to
issues such as the toxin levels. When individual
learning is stimulated, they can develop new ways to
add colours to their products without harming
additives.

Governance
Mars’s Code of Conduct highlights their standards of
governance to ensure their work alights with their
beliefs. However, in this case, even though Mars is
following the legal FDA guidelines in terms of their
titanium dioxide levels in their candies, it’s still not
ethical. Managers should make decisions that reap the
most value for society. Mars executives showed signs
of bounded ethicality when they promised to remove
titanium dioxide but failed to do so.
They participated in system 1, intuitive system
decision making which resulted in a lawsuit. They
made a rash decision without thinking of the
consequences.

And while Mars does have a strong environmental

and social framework, if they perform poorly on
governance, this will ultimately affect all the prowork
they’ve accomplished to some degree. Mars
management failed the last step in incorporating ESG
practices in the long term. That is, they didn’t commit
to transparency, which will affect relationships with
stakeholders.

If Mars is able to successfully implement their ESG

model, it will inevitably lead to value creation.
Because social engagement

By applying stakeholder theory, it allows Mars to

align their corporate values into their daily business
operations. It addresses vital issues such as business
ethics, morals and values, in essence, this theory will
allow Mars to maximise relations with internal and
external individuals. Instead of solely considering
shareholders, Mars should include everyone that
impacts their company.
In this case, stakeholders include consumers,
communities, employees, suppliers, competitors and
even the legislative government.
Mars failed to deliver value to its stakeholders

Discussion of Alternatives: Focus
on strategic analysis was
consistent. Used weekly readings
with additional research and/or
strategic tools complementary to
analysis. (30%, 3-4pg)
Alternatives:
- Partner w organic
companies for Mars to
offer healthier options
- Buy out a company by
using system 2,
deliberative thinking
decision making (week 2)
- Invest more in R&D to
develop new innovative
ways to add colours to their
products without disturbing
its taste and other qualities.
In this sense they will need
to remove all alarming
ingredients and can
potentially come up with a
whole new item that fits
consumers taste while
being
Week 6: Positive relationships &
Negotiation Strategy & The rules
of co-opetition
https://www.snackhistory.com/
yumearth/ (YumEarth)
because
Instead, Mars should focus on co-creation to form
those strong relationships in order to negotiate better.
Inevitably Mars can create partnerships of co-
opetition.
Don’t depend on skittles anymore because it’s not
worth a ruined reputation.
Consumer preference is shifting to healthier options.
This is vital for Mars to take into account because
they need to offer chocolates and snacks to health
conscious consumers. For example, Mars should
branch out and create a variety of organic snacks.
This can be done by cooperating with other
companies that specialise in organic chocolates and
candy snacks. For example, Mars can partner with
YumEarth because their snacks are organic, non-gmo,
gluten free and vegan. In essence, compared to Mars,
their ingredients are simple without the added
additives. Instead of using titanium dioxide to add
colours to their hard candies, YumEarth uses a variety
of fruits and vegetable extracts for colouring effects.
Mars has a stronger competitive advantage compared
to YumEarth, but they can strengthen this by
partnering with them. Despite it being classified as
mutually assured destruction, it will still be beneficial
to both firms. YumEarth can share their secrets on
producing healthier candies and meeting the needs of
health conscious markets while Mars will share their
secret competitive advantages.
Mars can also acquire these smaller companies
instead of forming a partnership. For example if Mars
bought out Herbaland, they don’t have to invest
heavily on marketing because Herbaland already has
pre existing consumers. This would be a valuable
acquisition because Herbaland’s products are
differentiated. Unlike Mars, their candies meet the
specific requirements for those who have allergies
and are diabetic. They offer products that are vegan,
low or sugar free, plant based and so much more.
They cater for those with dietary restrictions and
really focus on accessibility. If Mars acquires
Herbaland, it gives them full control over daily
 operations and by doing so, they’ve extended their
product line.

Lastly, Mars can invest more in R&D to develop new

innovative ways to add colours to their products
without disturbing its taste and other qualities.
Despite the FDA having titanium dioxide and other
chemicals in their list of approved food colour
additives, consumers' concern about its dangers
should be enough for Mars to act swiftly and find new
methods to ensure their dyes are safe. For example,
Mars should do research on how to make their own
natural food colourings without depending on
synthetic ones. Mars can conduct studies where
colours are derived from plants, minerals or other
sources. This would be more organic and healthier to
add value into their products. To go further, Mars
should also be prompted to remove all other harmful
ingredients. In doing so, they can come up with a
whole new product that fits consumers taste while
being completely safe to consume. Not only will
Mars be able to develop new products but they have a
higher chance of survival given this competitive
advantage.

What’s your Negotiation Strategy

– Beyond leadership (negotiating
strategies)

https://www.herbaland.ca/pages/
about-us (Herbaland)

Conclusion: Discussion gives a I recommend negotiation because it allows for Mars

recommendation from the three to branch out from its current chocolate and hard
alternatives. Recommendation is candies into a route that is healthier and desired by
more stakeholders. Negotiation and partnership is
feasible and contextualised within
analysis. (10%, 1pg)
How to design a winning
negotiating strategy - Leadership
Review (6 steps of negotiating
strategy)
ideal because Mars without fully committing
themselves to financial risk. Such as striking a
negotiation with Herbaland to any branch out from
candies to include hard candy protein snacks,
vitamins and collagen. Maybe to include drinks as
well. It will be a win-win situation for both parties
because it gives access to new market segments.
Despite the risk of others knowing their company
secrets, it’s unlikely for both firms to leave the
agreement because they have access to each other's
information. When Mars cooperates with YumEarth,
it’s easier to learn about each other's processes,
especially in team meetings. In group settings such as
this, it enables others to give constructive criticism,
this is useful for Mars especially because YumEarth
is knowledgeable in the organic snack industry in
which they are trying to penetrate. Essentially, there
will be a multitude of professionals adding value and
contributing something new on how Mars can reach
their desired audience.
Of course, to do so successfully, Mars needs to have a
strategic negotiation. There are six steps in doing so.
The first step is rethinking one's counterparts. Though
YumEarth seems like an obvious party to negotiate
deals with due to their high ESG practices and large
market share of health conscious consumers, they
need to go beyond that. Consumers are an important
stakeholder but Mars also needs to take into account
other stakeholders such as employees, suppliers,
competitors and community members. They need to
know how these negotiations will affect both internal
and external individuals. Currently the goal of Mars
should be to diversify their offerings by including
healthy goods and eliminating toxins, especially
titanium dioxide. They need to partner with a
company who both cares about their goals and is
knowledgeable in the field. Ideally, Mars can work
with a motivated and eager firm that truly cares about
their business outcomes, and this relationship should
be mutually beneficial.
The next step is to analyse Mar’s counterparts
constituencies. Mars needs to have an understanding
of how much power their negotiators or potential
negotiators will have. As well as what the
counterparty will or will not agree to. Of course
strategic negotiates will only go to those who can
influence the deal and are motivated to do so.
The third step is to rethink the actual deal scope.This
 part offers Mars new opportunities to turn the deal
bigger and better. And to think of not only current but
future negotiators as well to benefit their long term
goal.
Fourth step is to rethink the nature of its leverage.
Mars should use positive leverage to encourage others
to make a deal, not negative leverage or the fear of
missing a deal. Mars can offer many unique
advantages for counterparties to work alongside them.
Lastly, the final step is to look for links across
negotiations. Mars should not only focus on
YumEarth to have negotiations with but consider
multiple negotiations such as SmartSweets, Naked
Snacks and even Herbaland.

Citations: Used recommended

weekly readings; any outside
research or strategic tools were
properly cited and a bibliography
was provided.