CRITICAL SITUATION IN AN ORGANIZATION AND MANAGERIAL SOLUTION

1. CRITICAL SITUATION IN AN ORGANIZATION
AND IT’S MANAGERIAL SOLUTION
NAME: VIGNESH. M
REGISTER NUMBER: RA1952001020031
SUBJECT: MANAGERIAL SKILLS
COURSE : MBA
SECTION : A

2. THE HORLICKS PROBLEM

3. • Horlicks is a sweet malted milk hot drink
developed by founders James and William
Horlick. It was first sold as "Horlick's Infant and
Invalids Food", soon adding "aged and travelers"
to their label. In the early 20th century it was sold
as a powdered meal replacement drink mix.
• It was then marketed as a nutritional supplement
and manufactured
by GlaxoSmithKline (Consumer Healthcare) in
the United Kingdom, Malaysia, Australia, New
Zealand, Hong Kong, Bangladesh, India, Sri
Lanka and Jamaica.
• On 3 December 2018, Unilever announced they
were buying Horlicks for 3.8 billion USD

4. • In recent years, there has been an increase in the scope of the
brand in India. By pushing it to newer segments of the
market, Horlicks has become an umbrella brand for a wide
variety of products ranging from the flagship malt drink
to instant noodles, confectionery and breakfast cereal.
• Special formulations of the malted drink for young children
(Junior Horlicks), breast-feeding mothers (Mother's
Horlicks), women (Women's Horlicks) and adults (Lite
Horlicks) exist. Horlicks biscuits were first launched in 1993,
and an energy bar was launched in 2009, named Horlicks
NutriBar. Also in late 2009, Foodles, a brand of instant
noodles, was launched under the Horlicks umbrella. This was
followed in 2011 by launches of Horlicks Gold, a premium
variant of the malt drink (dubbed The Best Horlicks Ever),
and Horlicks Oats, the first breakfast cereal product under
the Horlicks brand.

5. THE PROBLEM
• The Patna High Court on Thursday stayed a Bihar government
order which banned the sale and manufacture of
GlaxoSmithKline's Horlicks in the state with immediate effect.
The top court of the state also issued notices to the Drug
Inspector, Department of Health, the state Drugs Controller, the
Commissioner of Food Safety, and Food Safety Standard
Authority of India. It has asked the agencies to file their reply
within four weeks on GSK's petition challenging the ban.
• Exercising powers under the Drugs and Cosmetics Act, 1940, the
Drug Inspector of Muzzafarpur had on November 17 passed an
order banning the sale and manufacture of GSK's Horlicks
alleging that the malt-based drink wrongly carried a green dot
signifying the product was vegetarian despite containing Vitamin
D3, which has been declared non-vegetarian.

6.  In its challenge before the Patna High Court, GSK said
that the food inspector had no jurisdiction to pass the
order banning sale and manufacture as it could be done
only by the central government.
 In its petition, GSK, represented by law firm Khaitan &
Co, also said that their product contained Vitamin D2
and not D3 as had been alleged in the order of the food
inspector. Vitamin D2, the company claimed, is a plant
derivative.

8. Strategic decisions
• Brands and products tend to age over the years if not
nurtured properly. Horlicks has learnt to defy age. By
successfully launching variants at different points in time, it
has strengthened its core brand values, apart from
addressing new consumer needs and thus bringing such
consumers into its fold.
• It simultaneously invested in consumer research and
aggressive brand strategy.

9. • This was the tipping point. What appeared to be a
natural slot for the brand to slip into, actually followed
heated debate within the company: Horlicks was a
family drink until then, the great "family nourisher". All
branding and communication spoke to different family
members and how it meant different things to different
people, while the new campaign spoke to children
directly.
• this, the company tapped into the growing pester power
of children who now were key decision makers not only
with what they ate, but also other key decisions around
the household.