Presented by - ASHWINI MOHAN

What is a Crisis?
‘A crisis is a major occurrence with a potentially negative outcome affecting an organization as well as its publics, services, products, and/or good name.’ Two different views of Crisis:

Traditional view-An event that can destroy or affect en entire organization

Strategic view: A decisive moment, a turning point for a better or worse.

Common elements to crisis:
An escalation of an event The presence of panic
The tendency to act irrationally and precipitously when feeling intense emotions

Chaos in internal communications A threat to the company’s reputation


We can differentiate crisis into:

1)Expected/Predictable crisis 2) Unexpected /unpredictable crisis

Perrier & Benzene – Case study (Unexpected crisis)
In 1989 Perrier was the leader in the sparkling water market. High reputation–13%of the Market share –

1990–Benzene scandal - Presence of the chemical Benzene at levels above standards

7mio bottles were recalled from North America Ronald Davis’(Perrier America President) declared that the problem was limited to North America • Cleaning Fluid on a production line machine mistakenly used. • Declaration done before identifying the source of contamination. Three days later…discovery:- 6 months worth of production affected.Not only North America but also Global Market

• FrederikZimmer(Perrier’s International Division President) : • “Perrier water naturally contains several gases including Benzene.The Benzene entered the water because of a dirty pipe filter at an underground spring at Vergezein southern France.” (It means that “Natural”Perrier was in reality processed)

Effects on the market
Financial effects: -Perrier’s stock price declined

-Market share declined (13%>9%)
-Price to consumers declined Management effects:

Plans to restructure
Management structure and bottom line Firing of GustaveLeven(CEO & Founder)

Analysis of the Terrier case
• Lack of internal communication and coordination • contradictory explanations • Conveyed misinformation • credibility & reputation damaged • no centralized approach

• Media controlled the information • Defensive behavior • Lack of proactive and clear communication towards customers • Scandal became a big media event • Rapid widespread of the news on a global level • Emotional component(People scared , betrayed , bad reputation)

Monitoring crisis
• Companies must carefully monitor issues in order to be able to identify potential crises and preventing the issue from turning into a crisis. • The issues should not only be monitored in the traditional media. • Today, a lot of communication among stakeholders is taking place in social media, and brands must therefore monitor social channels such as blogs, Twitter and Facebook . • If a negative comment about your company is circulating online, you must monitor if the negative sentiment is turning into an actual crisis – and a crisis quickly flourishes online.

Prevent an issue from turning into a crisis
You should never leave a question unanswered – whether it’s a negative or positive sentiment you must always reply. • Set up a monitoring system to be alerted if a critical post about you is being published and respond where the criticism appears. • If a negative comment calls for a response, this must always be done – whether it’s an implicit question or criticism where it is possible to provide an answer. • The issue has at this point not yet turned into a crisis, but it must still be handled.

Call for Action:
If the negative comments turn up repeatedly and become the main subject of the communication on media channels, you must take it a step further – a response or a comment will no longer be sufficient. • It is important to show that you take the crisis seriously and to give people information about the crisis and about the efforts you are making to deal with it – not only on your webpage but using different media. • If the negative message has spread and the issue has grown to become an actual crisis, you must take action and involve in crisis management. Whether the crisis your company is facing is about untrue rumours, costumer complaints, criticism of your company’s moral, or any other issue, you have to consider the crisis response.