1. 2010-05-19
Ewelina Brania
Student’s book 79774
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2. 2010-05-19
1. Arla Foods
2. Society profile
Country profile
Cultural profile
Communication components
3. Case profile
4. Campaign
• Aims
• Strategy
• Instruments applied
5. The crisis of Arla
6. Conclusion
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3. 2010-05-19
The largest producer of dairy products in Scandinavia
Headquarter in Aarhus, Denmark
Mission: “… to provide modern consumers with natural milk-
based products that create inspiration, confidence and well-
being”
Owned by 7 996 milk producers in Denmark and Sweden
73% of shares in Danish, Swedish and British market
49, 469 m DKK revenue (2008)
15, 927 employees
Arla - “early” in archaic Swedish
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4. 2010-05-19
1882 – 1st Dairy in Hjedding in Denmark
1970 - Establishment of Mejeriselskabet Danmark (MD)
1989 - Formation of MD Foods International to acquire
dairies abroad
1990 - Launch of butter Lurpak on UK market
1st dairy in Stora Arla Gärd in Sweden -1881
1881
Formation of Mjölkcentralen (MC)- 1945
Mjölkcentralen changes name to Arla – 1975
2000 - Merger of Danish MD Food and
Swedish Arla
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5. 2010-05-19
13 countries: Algeria, Libya, Egypt, Lebanon, Yemen, Kuwait,
Morocco, Jordan, Oman, Saudi Arabia, Qatar, UAE
50% of shares in Saudi Arabian butter market, 68% - UAE, 80%
- Qatar
Annual sales of $550 m in the Middle East
Strong positive “Danish” image
“Coming from a small and politically natural country like
Denmark is definitely a plus when you’re selling in the Middle
East. We are not associated with any kind of imperialism – we feel
that our partners trust us.”
H. Niss
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6. 2010-05-19
Political Republic - 6, constitutional monarchy – 3, absolute
structure monarchy – 3, federation of emirates - 1
Legal Mainly Shari‘a law with western influences
system The independence of judiciary main principle in Shari‘a
The Beirut Declaration (1999) for Arab states – procedural
guarantees of judicial independence, denouncement of
discrimination on the basis of gender etc.
Level of “Lack of transparency, a weak media, lack of democracy,
activism social dogmas, religious tension – all this makes it almost
impossible to make any real change. Arab society provides
no encouragement to pursue a life of activism”
Weal Hmaidan, co-funder of the League
of Independent Activists
Theocratic activism - terrorism
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7. 2010-05-19
Economic GDP (PPP) – 20 782.62$
structure very diversified – max. Qatar 86 006$
min. Yemen 2 411$(IMB 2008)
Adult literacy – 66% (Syria, Lebanon, Jordan – over 90%)
Media Practically lack of press freedom (mostly ranks under 100th
system place in Reporters Without Boundaries’s ranking 2008 )
Yemen – 167th, KSA – 165th , Syria – 163rd
“independent” press owned by member of the ruling family
of businessmen close to the ruling family, very few literally
independent
Usually a government-issued license is needed
Harsh defamation law
Usually direct censorship for materials from abroad
Al-Jazeera (1996) – a revolution on Arab TV market, highly
independent in spite of financing by Qatari government,
often discusses taboo topics
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8. 2010-05-19
High-context
Authoritarian relationships
High power distance
Polychronic
High uncertainty avoidance
Non-linear
Present-oriented
Being-oriented
Cultural values: collectivism, hospitability, honor
Socio-historical influences: Islam, poetry, nationalism
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9. 2010-05-19
Language and verbal Non-
Non-verbal communication
communication
Elaborateness Gestures – direct body orientation
Codeswitching between different Direct eye contact between the
forms of Arabic and French, same sex, lowered gaze submission
English
Affectiveness Touching restricted between males
and females
Repetition
Indirectness
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10. 2010-05-19
17.09.2005 – “Politiken” publishes an article “Profound anxiety
17.09.
about criticism of Islam” in which the author
discusses the problem of self-censorship in
relation to Islam in Denmark
30.09.2005 – the Danish newspaper “Jyllands-Posten” publishes
30.09.
article “Muhammeds ansigt” (The face of
Muhammad) that refers to terrorism of Islamic
organizations with 12 cartoons
“They [Muslims] demand a special position, insisting on special
consideration of their own religious feelings. It is incompatible
with democracy and freedom of speech.”
Flemming Rose, editor of “Jyllands-Posten”
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11. 2010-05-19
20.10.05 – ambassadors of Muslim countries ask the prime
20.10.
minister to react
“The freedom of expression has a wide scope and the Danish
government has no means of influencing the press”
Anders Fogh Rasmussen, prime minister of Danmark
28.12.05 - “Jyllands-Posten” refuses to apologize for the
28.12.
publication
20.01.06 – religious clerics in KSA advise Muslims not to buy
20.01.
Danish products (Arla Foods, Lego, Ecco shoes etc.)
Most of the shops as a sign
of solidarity with Muslims
community remove Danish
products from their shelves.
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12. 2010-05-19
”Our
challenge is to
regain consumer
confidence in the
Middle East”
Managing Director
Peder Tuborgh
Restore it’s
product on
the shelves in
Maintain dialogue
shops in the
Middle East Reintroduce Arla
to the market
(cut off from an
image of a
Danish company)
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13. 2010-05-19
Emphasizing long-lasting relations with Muslim community
(long history in the Middle East, many Muslim employees over
the years etc.)
Showing interest of Islamic and Arabic culture
Appealing to Islamic values (tolerance, justice, forgiveness
etc.)
Showing Muslims society understand of their reaction to
cartoons - Influencing Muslims hearts not minds, “leaving”
them decision about the future of the boycott
Improving contact with Islamic religious leaders, as
intermediaries to reach Arab Muslim society
Lobbying the Danish Prime Minister to apologize for the
cartoons
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14. 2010-05-19
Newspaper’s adverts with Arla’s standpoints and reprints of
opinions of the Danish government and Jyllands-Posten
TV commercials
Frequent up-dates about the boycott and undertaken actions
on the website
“Status report Friday afternoon”, “Arla makes "all resources
available“ etc.
Records with confessions of Arla’s Muslims employees from
feelings about the cartoons
Leaflets with reprints of Jylands-postand standpoint
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15. 2010-05-19
26.01.06 – the largest grocery
26.01.
retailer in KSA – Al-Othaim Holding
Company confirms that it will not be
selling Danish products until an
apologize for the cartoons will be
“The campaign of all
published in the largest newspaper Muslims to protect the last
in the country prophet Muhammad (saw)”*
“In the name of Allah
we apologize our dear
customers but we
don’t sell Danish
products because of
the boycott campaign.
The products are:…”*
*Translated by the author
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16. 2010-05-19
26.01.06 – “We can confirm that our sales have been affected”
26.01.
says Finn Hansen, Executive Director, Arla Foods
In one of Arab countries people are throwing stones at Arla’s
vehicle.
Arla tries in press release to emphasize it’s long-lasting good
relations with Muslim community, cut themselves off from an
image of a Danish company – “In fact, we have more Muslim
consumers”.
than Danish consumers” ED of Arla calls for peaceful dialogue.
27.01.06 – Arla ensures that the press release with the
27.01.
statement of Danish Government will be
published in Saudi Arabians newspapers (Arla
puts ads in Middle East’s newspapers)
In the statement the Danish government ensures that it
respects Islam and that “Jyllands-Posten” have no connections
with government, it’s private and independent so it can
not be perceived as a standpoint of Denmark society.
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17. 2010-05-19
28.01.06 – Arla places adverts in Middle Eastern newspapers
28.01.
trying to encourage people to stop the boycott
29.01.06
29.01. – ”Jyllands-Posten” prints statement in Arabic
explaining that cartoons had been a sign of
freedom of speech not a campaign against Islam.
Islam.
Libya closes the Danish embassy in Tripoli, Palestinians burn
Danish flag.
30.01.06 – “Production for the area seriously threatened”
30.01.
alarms Arla:
KSA – Arla’s importers cancelled all orders
Kuwait – wide media coverage about the boycott
Qatar – the products removed from almost all shops
UAE – within a short time the products will be removed
EVERYWHERE
SALES STOPPED!!!
"I urgently beg the government to enter a positive
dialogue with the many millions of Muslims who feel
they have been offended by Denmark” says in a
statement Peder Tuborg, Arla’s ED
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18. 2010-05-19
31.01.06 – Arla informs that none of the employees in the
31.01.
Middle East will be dismissed so that Arla can
quickly restart production when the boycott will be
over
Danish imaans call off the boycott in Denmark. In the press
release Arla tries to emphasize it’s openness and good relations
with Muslims society by citing Kasim Amat, a spokesperson for the
Danish Islamic Community, who suggests undertaking a joint
venture (DIC, Ministry of Foreign Affairs, Dansk Industri and Arla)
to Saudi Arabia to “correct the misunderstandings The situation
misunderstandings”.
abroad is still difficult.
“The dialogue here has taken a positive turn”
Finn Hansen, ED Arla Food
01.02.06 – Arla ensures that it will spread the statements
01.02.
(press adverts) of the Danish Prime Minister and
Jyllands-
Jyllands-Posten from press conference on 31th Jan,
when they emphasized that cartoons are a part of
freedom of speech not incursion on Muslims
society and that they want to continue the
dialogue and restore good relations with Arab
world.
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19. 2010-05-19
In French, German, Italian and Spanish newspapers appear
reprints of the cartoons
18.02.06 – Arla participates in Middle East’s largest food
18.02.
exhibition “Gulf Food” in Dubai
Signs at Arla’s stand show it’s distance from the cartoons Arla
cartoons.
staff gives away customers copies of Jyllands-Posten’s apology
Jyllands-
and is willing to answer to the questions of the local media.
“A face-to-face dialogue is extremely important in the Middle
face-to-
East and cannot be substituted by a phone call” says Jan E.
Pedersen, Arla’s Director for the UAE
20.02.06 – as a reaction to rumors in the media that Arla is
20.02.
boycotting Isreal, Andreas Lundby, Deputy
Managing Director, makes a statement
In the statement he also emphasizes that all of products
exported to KSA are Danish and none of the ingredients comes
Israel.
from Israel
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20. 2010-05-19
02.03.06 – estimations of Arla show that the boycott will cost
02.03.
the company 400 m DKK
20.03.06 –
20.03. Arla announced that it was going to publish on
25th explanation of it’s stand in case of the
offensive cartoons in full page advertisement in
25 newspapers across the Middle East
“Arla Foods distances itself from the act of Jyllands-Posten in
Jyllands-
choosing to print caricatures of the Prophet Muhammad and
we do not share the newspaper’s reason for doing it. (…) We
reaction,
understand and respect your reaction leading to boycott of
our products as a result of the irresponsible and unfortunate
accident. (…) The years that we have spent in your world have
taught us that justice and tolerance are fundamental values of
Islam….in the hope that you will reconsider your attitude to
Islam
our company”.
22-23.03.06 – Arla took part in The First Conference of the
22-23.03.
International Committee of the Support of the
Final Prophet in Bahrain
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21. 2010-05-19
03.04.06 - International Committee for the Support of the
03.04.
Prophet publishes press release with the result of
the conference in which it
appreciates “the attitude of Arla Foods that declared its rejection of
the pictures and was not in agreement for reasons for their
publication.“ The president of ICSFP, Yousef Al-Qaradawi notices
that Arla is an objective of criticism for it’s standpoint in Denmark.
T HE OFFICIAL END OF THE BOYCOTT
06.04.
06.04.06 – Arla decides to sponsor humanitarian projects in
the Middle East (giving aid to disable children,
cancer suffers and the hungry) and activities that
will build mutual understanding between different
cultures
“The boycott had been lifted only against Arla This company
Arla.
apologised to Muslims and sponsored humanitarian projects for
the needy" says Adel Al-Maawdah, a spokesman of ICSFP
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22. 2010-05-19
Arla was the first company which Arab world have lifted the
boycott for
It’s products came back on 6th April 2006 on shelves of over
3000 shops in the Middle East
By the end of 2006 Arla recovered 50% of the pre-boycott
annual sales volume
The company restored good image in Muslim society through
cutting off from Denmark. Arla regained consumers trust.
“We must differentiate between those who insulted us and
those who stood by us.”
us.
Soliman Albuthi, spokesman of ICSFP
In western countries the image was tarnished.
The Arla’s apology for the cartoon was perceived as
a denial of a fundamental value of modern society –
freedom of speech. The campaign “Support Denmark
Boycott Arla” was launch.
Before crisis Arla supplied – 50 000 shops*
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23. 2010-05-19
The biggest problem of the Arla’s case was the fact that the
company had strong national image
image.
“Key to Arla Foods’ strategy was deconstructing the
sometimes conflicting national and organizational identities
that emerged.”
Patricia A. Curtin, Thomas K. Gaither
If a company does not want to be perceive as a country-of-
origin any more, then it can as a part of PR campaign:
• Get involved in local community issues (homelessness,
cancer patients etc.)
• Publicly distance itself from the source of offence
• Cut off from the image of a company from the issue
• Resign or downplay the “Made in…” aspect of the
brand
• Change the name of the company
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24. 2010-05-19
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