1) Explain with reasons was it external environmental change that caused the problems for

Maggi or was there some internal environmental issues?

Ans:
 The problem for magi started with :'No added MSG (monosodium glutamate)', claimed a
bright-yellow packet of Nestle Maggi Noodles. A UP food inspector checked, and found a
lot of lead in it as well
 There are External, Internal as well political factors which boosted up the problems for
maggi noodles.
 FSSAI discovered excessive levels of lead and monosodium glutamate in Nestlé India
Limited’s flagship brand Maggi. Social media platforms like Facebook and Twitter were
used by people across India to talk about a supposed #MaggiBan with anger, anxiety and
anguish never seen before by the brand to which Maggi replied using auto response. The
biggest revenue generator for Nestlé– Maggi accounted for roughly a quarter of the
company’s $1.6 billion in revenue in the country (Fry, 2016) – stumbled into a Public
Relations debacle.
 The brand reputation earned with years of hard work and trust building was shattered
in a matter of a few days, eroding consumer confidence. This study assesses crisis

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communication done by Nestlé using a case study approach with the lens of contingency

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theory. It was noted during analyses that responses by the brand before and after crisis

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were better as compared to during the crisis. Social media should have been better used

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by the brand during the crisis to placate the angry consumers and manage their

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expectations.
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 Customers felt a difference in the taste of Maggi post crisis, but very few respondents
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had stopped consuming Maggi. The former legacy of Maggi, trust of respondents on the
brand and the advertisements released using nostalgia as an appeal post crisis are
helping Maggi immensely to recapture the market.
 Bad time for the brand; Silent; No plan B; Epic crisis; Brand seemed confused; Faltered;
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Quiet; Sad state of affairs for the brand.

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 During the crisis, Maggi mainly re-tweeted and used autotweets which created
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detachment between the brand and its consumers. Personalized tweets and being more
interactive would have helped connect with consumers. It seemed as if the brand had
forgotten that Maggi was a loved brand and a lot of emotions were attached to it.
YouTube videos during all three phases –pre-crisis, during the crisis and post-crisis –
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have been effective in their communication compared to that on Facebook and Twitter.
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The message has been communicated clearly and effectively using YouTube.
 While conducting interviews with experts in fields of PR, Corporate Communication,
Marketing Communication and Social Media, it was observed that most of them believed
Maggi’s communication during the crisis was weaker than before and after crisis. It was
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noted that during crisis, communication from the brand’s end seemed impersonal, too
technical and mechanical and as if it lacked a strategy.
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2)
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Explain whether adequate plans beforehand could have helped Maggi to anticipate the problem.
Justify your answer .
Ans:
 Maggi should have followed the crisis communication strategy.
Communication during a crisis needs to be aligned across the organization. Every commercial, print
advertisement, YouTube video, tweet, post on Facebook needs to convey the same message. This is
only possible if an effective crisis communication strategy is thought of in advance because, crisis

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 response strategies seek to protect an organization by Contingency Theory Crisis Communication
Strategies eliminating or reducing reputational. Every crisis situation would not have the same
consequence. Hence, strategies would also vary during different crises.
Communicators should never forget that ‘word of mouth news is tremendously influential and even
perceived as more trustworthy than mainstream media in some .Thus, responding to every
customer is important in today’s era. Organizations that bring in new media tactics and engage the
public in proactive discussions before, during and after a crisis exemplify an important movement
from one-way communication to two-way interaction between the public and an organization Such
organizations are valued immensely in this era. If used wisely, ‘internet gives to every organization
the potential to gain a control over its relations and reputation’.
 Social Media:
Web is a platform where content and applications are no longer created and published by
individuals, but instead are continuously modified by all

Maggi has already the popularity as

Preference for Maggi :Easy to cook; 2 minutes; Instant hot snack; Tasty; Increased vegetable intake
of children

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 Better Communication: Use social media as there was no visibility of the brand; Out of sight

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is out of mind; Engagement; Proactive; Release official statements; More careful

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 Managerial And Specific Implications: Impacts public memory; Be fast; Decision making;

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Strengthen media relations; Strengthen Online Reputation Management; Strengthen Social

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Media monitoring; Design personal messages; Plan B important; Negative publicity
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 Social Media (SM) :Road of fire; Be there; Use in correct way; Right proportion; Social
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listening1; Interact; Engage; In line with company policy product and target2; Be consistent;
Be positive
 SM For Brands Brand PR; Build identity; Use technology; Right level; Big data; Data
analytics; Respond fast; No silence; Be fast and immediate; Not leave it open to
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interpretations; Engage; Media lists updating3; Promote.

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3)“SWOT analysis is actually not an analysis but a list of items. It does not help in making
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strategies. VRIN is a better method”. Give your opinion in favour or against the statement taking
the context from the Maggi issue.
Ans: This statement is currect.
 The VRIO framework is a strategic analysis tool designed to help organizations
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uncover and protect the resources and capabilities that give them a long-term
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competitive advantage. The framework should be put into play after the creation of
a vision statement, but before the strategic planning process.
 SWOT analysis (strengths, weaknesses, opportunities and threats analysis) is a
framework for identifying and analyzing the internal and external factors that can
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have an impact on the viability of a project, product, place or person.

SWOT:
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while opportunities and threats arise from developments in external environment in which Nestle
Maggi operates. SWOT analysis will help us in not only getting a better insight into Nestle Maggi
present competitive advantage but also help us in how things have to evolve to maintain and
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consolidate the competitive advantage.

 Strengths

- Streamlined processes and efficient operation management – Nestle Maggi is one of the
most efficient firms in its segment. The credit for the performance goes to successful
execution and efficient operations management.

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 - High customer loyalty & repeat purchase among existing customers – Nestle Maggi old
customers are still loyal to the firm even though it has limited success with millennial. I
believe that Nestle Maggi can make a transition even by keeping these people on board.

 Weakness

- Little experience of international market – Even though it is a major player in local market,
Nestle Maggi has little experience in international market. Nestle Maggi needs international
talent to penetrate into developing markets.

- Low profitability which can hamper new project investment – Even though Nestle Maggi
financial statement is stable, but going forward Nestle Maggi 5-7% profitability can lead to
shortage of funds to invest into new projects.

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 Opportunities

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- E-Commerce and Social Media Oriented Business Models – E-commerce business model
can help Nestle Maggi to tie up with local suppliers and logistics provider in international

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market. Social media growth can help Nestle Maggi to reduce the cost of entering new
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market and reaching to customers at a significantly lower marketing budget.
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- Increase in Consumer Disposable Income – Nestle Maggi can use the increasing disposable
income to build a new business model where customers start paying progressively for using
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its products. Nestle Maggi can use this trend to expand in adjacent areas Crisis management,
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Leadership, Marketing.
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 Threats
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- Age and life-cycle segmentation of Nestle Maggi shows that the company still hasn’t able to
penetrate the millennial market.

- Customers are moving toward mobile first environment which can hamper the growth as
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Nestle Maggi still hasn’t got a comprehensive mobile strategy.

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VRIO Analysis of Maggi:

Competitive
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Resources Value Rare Imitation Organization Advantage

Opportunities in Yes, the e- No, most of the The AI and It is just the start In the long run
the E-Commerce commerce space is competitors inhouse for the it can provide
Space using rapidly growing are investing in analytics can be organization sustainable
Present IT and firm can IT to enter the difficult to competitive
Capabilities leverage the space imitate advantage

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 Competitive
Resources Value Rare Imitation Organization Advantage
opportunities
Brand Yes No Can be imitated Yes, the firm has Temporary
Positioning in by competitors positioned its Competitive
Comparison to but it will brands based on Advantage
the Competitors require big consumer
marketing behavior
budget
Pricing Strategies Yes No Pricing Yes, firm has a Temporary
strategies are pricing analytics Competitive
regularly engine Advantage
imitated in the
industry

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4)

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Give your idea regarding what management principle(s) Maggi can use to avoid such issues in the

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future.
Ans:

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A company of the size of Nestle is not new to handling or managing crisis. But when you put a
question mark on the equity of a popular food brand and one of the world's top food companies, the
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best of your crisis management plans can go haywire. Crisis related to food products surface
frequently and research shows that it can take three/four years on an average for a large successful
brand to recover from the equity dilution and loss in sales after a crisis. The larger your brand, the
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higher the risk it carries as the chances of it failing its own standards increase because of its level of
aC s

penetration and reduced control over the supply chain before it reaches a consumer's plate. There
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are, however, a few important steps one must take as a brand custodian during such a crisis:

 First response: Timing your first response can be the most challenging decision during a
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crisis because you are in shock and are still gathering facts to formulate your
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communication. However, any delay of more than a few hours can be disastrous. Your first
response must go out almost instantly, owning up to the crisis with a promise to supply
more information and enumerating your action points.
 One voice: During such crisis, everybody in your company has an opinion from your
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security guard to your CEO. It is important to focus on your internal branding first and limit
the source of communication to a single point. This ensures consistency and builds both
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internal and external confidence in the brand during crisis.

 Reduce messages: Fewer messages mean fewer speculations. Stick to the facts and share
your firm official stand on the issues. Draft well thought out releases in advance by
sh

speculating all likely actions and reactions by the stakeholders.

 Time it: Your messages must be timed with important releases from government
authorities, the buzz in social media and reactions from other stakeholders. You need to be
ready with your engagement Strategy much before opinions start taking shape. Acting
timely will give you rare opportunities to drift public sentiments in your favor by subtly
influencing the discussions around your brand.

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 m
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Submitted By,
Jagyanseni Ray.
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