Inside this case Executive summary of the case Theory on business environment Introduction to Nestle Analysis of the case The Incident Conclusion And recommendation
Executive Summary The case seeks to examine the Nestle experience with respect to social media controversy in their facebook page The first section introduces Nestle and some theories regarding business environment The second section builds up on the critical analysis of the incidents that led to the controversy The last section concludes by explaining the lessons obtained from the case and recommending various ways on which similar cases can be handled and adapted
Business Environment Business Environment: refers to all external forces which have a bearing on the function of business. The business environment poses threats to a firm or offers immense opportunity for potential market exploitation Business environment can be studied at different sub categories including economic, political, technological, natural, global and sociological
Sociological Environment It refers to people’s attitude to work and wealth, role of family, marriage, religion, race, cast, education, ethical issues, and social responsiveness of business This case shows the reaction of people to an organization which seems not responsible for the environment protection i.e. deforestation. So the next slide will tell us about Nestlé
Source: Nestlé websiteCompany origins Henri Nestlé, born in 1814, began with developing a formula for babies whose mothers couldn’t breastfeed After a series of acquisitions and merges, a company emerged by the name Nestlé and Anglo-Swiss Milk Company in 1905 (Nestlé, n.d.) The company expanded rapidly during World War I due to high demand, even though resources were scarce By wars end, the Company had 40 factories, and its world production had more than doubled since 1914 Now, Nestlé employees over 280, 000 people and has a facility in almost every country.
Plunging Into Social Media Nestlé decided to reach out into the new trend of social media roughly around the beginning of August 2006 Their first post on Facebook was: Nestle Im on the page as well, viewing from Vevey . January 21, 2009 at 3:17am
Analysis of The Incident On March 17th Greenpeace, an organization devoted to environmental protection, posted a video on YouTube in protest of Nestlé s workings with a company that was involved in deforestation in Indonesia. Nestlé was quick to respond by demanding the video be taken down since it infringed on copyright laws. YouTube complied as it agreed with Nestlé. Greenpeace angry at this attempt to stop them they started attacking Nestlé’s Facebook page
For More read http://tinyurl.com/nestlepalmoil.Analysis of… In response Nestlé wrote the following Nestlé and palmoil: were concerned. We announced our commitment to using only Certified Sustainable Palm Oil by 2015. We have accelerated investigation of palm oil supplies to identify any unsustainable palm oil. Given our uncompromising food safety standards, we have done this in a deliberate manner as we use palm oil for food and not soap or other personal care products.
Analysis of… This was a good move responding as quickly as they could but the beginnings of social media misuse A Customer Adrian Peters responded So is it true that youre still buying unsustainable palm oil as Mr Woolley points out? Also ...by 2015, in five years a lot of irreplaceable forest could be wiped out by then. Simply put Kit Kats bear no importance to life compared to ancient endangered forests, which is more important in reality? Surely you can use other less damaging oils instead of palm oil. No? March 17, 2010 at 12:40pm
Analysis of… Nestlés response I suppose I could repeat as fast as food safety allows‘ and then you could repeat your post. 2015 is the year that many industrial users of palm oil are aiming at to have fully switched to sustainable palm oil. March 17, 2010 at 1:10pm Another customer Dawn Camp wrote tsk tsk tsk.... state a fact and dont get testy when its a business related site March 17, 2010 at 1:26pm
For more read http://tinyurl.com/nestlepalmoil.Analysis of… More and more negative responses and use of an altered version of Nestlé by customers Nestlé wrote the following in response We welcome all comments, but please dont post using an altered version of our logo as your profile pic. And please read our statement to answer many questions. March 18, 2010 at 8:11pm But people still continue using the altered version of Nestlé logo as their profile photo
Analysis of… The extreme point of the fiasco was this comment by Nestlé To repeat: we welcome your comments, but please dont post using an altered version of any of our logos as your profile pic - they will be deleted. March 19, 2010 at 2:26am The attempt of controlling people’s comments caused a tremendous uproar.
Analysis of… The previous postings had gotten around 25 comments but this one had well over 150 comments within a matter of hours It was this post that Nestlé began deleting the replies made by the irate people and started arguing directly with them instead of posting general announcements. This resulted in the loss of many customers and a decrease in the sales of its product aligned with a lot of bad comments in its facebook, twitter , Youtube and other accounts
Analysis of… Nestlé soon realized that they were making matters worse and about 12 hours after their original post they made a public apology. This (deleting logos) was one in a series of mistakes for which I would like to apologies. And for being rude. Weve stopped deleting posts, and I have stopped being rude. March 19, 2010 at 2:26am
Analysis of… Nestlé made several posts about their new policies regarding deforestation and sustainable palm oil plan for 2015. People kept posting negative comments but it was now mixed a little with people commending Nestlé for their move. They next tried writing a letter to Greenpeace to appease their people but this too was met with great resistance Finally, they attempted to go back to their routine post on their activities abroad.
Conclusion Admit mistakes on time: If there is a problem and you know it, you might as well as readily admit to it. NEVER be condescending towards a commenter: don’t try to give lectures to commenters You don’t make the rules in social media: Accept that by choosing the medium, you choose to talk to the consumer as an equal. Always have a plan: Having a crisis management plan in place that can be deployed online at the first hint of trouble is of utmost importance.
Recommendation To have somewhat loosely structured rules, as guidelines for the employees that were responding to people’s comments To expect both positive and negative comment To use a media that better suits with needs Diverting the attention of customers was a good move by Nestlé to settle such kind of social fiasco To control their own responses in future so as to prevent another fiasco.
Questions??The group welcomes any suggestions, questions