Johnson and Johnson faced a crisis in 1982 when their painkiller Tylenol was found to be contaminated with cyanide, killing 7 people. They immediately recalled all Tylenol from shelves at a cost of $100 million. They then reintroduced Tylenol with tamper-resistant packaging and coupons for discounts. Within 5 months, they had recovered 70% of the Tylenol market share through their quick response. The document outlines how Johnson and Johnson effectively handled the crisis through immediate action, addressing safety concerns, and turning the crisis into an opportunity.

1. Critical situation & managerial solution in
an organisation
By
Shalom.v
MBA-”B”
RA1952001020067

2. Company
LOGO
Johnson and Johnson
crisis management

3. Content layout
 Introduction
 Problem
 Effects of the crisis
 Company’s move
 Cost and benefit
 Causes of success
 Smartest way to handle crisis
 Lessons from this company

4. Introduction of Johnson and
Johnson
• Founded by three brothers Robert wood
Johnson, James wood Johnson and Edward
mead Johnson.
• Company introduced first commercial first aid
box, baby powder, no more tear shampoo and
modern form of medicine packaging along with
many medicines.

5. Problem
• 1982 , Tylenol leading painkiller sold by
Johnson and Johnson was tempered with
cyanide and 7 people died in US.
• Reported that a unknown suspect put 65
milligram cyanide into Tylenol capsule and
tampering occurred when product reached
to the shelves.
• Company immediately call back the
product from the shelves and faces loss of
about 100 million .

6. Effect of this crisis
• In 1982 Tylenol was covering the 37% of market
share with revenue of 1.2 million.
• After this incidents market share reduced to 7 %.
CHALLENGE FOR COMPANY:
• To find a best way to deal with this problem
without destroying the company’s image and its
most profitable products.
• They have to provide a better product protection
before reestablishment of product.

7. COMPANY’S MOVE
• Reintroduced the product with triple seal temper
resistant packaging.
• Offered a $ 2.50 off coupon n the purchase of
their products. They were available on news
papers and toll free numbers.
• 25% off on the purchase of product to recover
the loss in stock crisis.
• 2250 sales people made presentations for the
medical community to restore trust on the
product.

8. Cost and the benefit
• Company won praise on its quick and
appropriate action.
• Within five months company had
recovered 70% of market share for the
drug.
• So there is a evidence that consumer
rewarded the company by switching from
other painkillers to the Tylenol.

9. Causes of success
• Acted quickly , remove any source of
danger and does not wait for the other
evidences.
• Showed that measured has taken which
would prevent such type of problem.
• Showed them self as to be prepare to bear
the short term cost in the name of the
consumer safety

10. SMARTEST WAY TO HANDLE CRISIS
• Avoid crisis in the first place.
• Quickly address and resolve crisis before
they escalate
• Seek possible ways to turn your crisis into
an opportunity

11. Lessons for this company
Prepare a system that will allow you to
respond to the emergency.
Develop policies to deal with emergencies.
Create a crisis management team.
Assemble an organize resources.
Distribute an emergency procedures
guide.

12. conclusion
• Crisis can come at any time you should be
prepare for it.
• A proper planning and decision making.
• Johnson and Johnson’s has set a
impressive example in Tylenol case.
• Other companies can learn a lesson from
it.