Find an Example of Product Contamination That Occurred and Discuss the Way in Which the Organization Reacted. What Should an Organization Do to Prepare for Such a Risk?

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  • Topic: Grupo Modelo, Beer, Mexico
  • Pages : 2 (684 words )
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  • Published : January 26, 2013
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Write up a review of a famous (or not so famous) corporate blunder, which either ruined a company, or dealt it a significant setback. How did the actions of the various stakeholders affect the incident?

A famous corporate blunder that came to mind was the joint venture between Anheuser-Busch a multinational organization formerly a U.S. own brewery that held 45 percent of the US beer market and Grupo Modelo a Mexican company that brews the popular beer Corona that held 50 percent of its home beer market and exported to 124 countries in the globe. Anheuser originally entered into the venture with Modelo with the thought that the partnership would yield them profit and the access to the distribution of a major imported beer the Corona which was experiencing exponential growth in the US beer market. Anheuser’s venture was a purchase of 17.7 percent stake into Grupo Modelo for $477 million in 1993 with a contracted option to increasing its share to 50.2 percent. Unfortunately for Anheuser, Modelo backed door them with a renewed deal for ten years with its existing US distributor slashing the hopes of Anheuser to gain the exclusive brand rights to distribute in the US. Due to this set back Anheuser opted to increase its stake in Modelo in 1997 that lead to several months of dispute regarding price and further international arbitration when they decided to fully increase they stake to the 50.2 percent permitted under contract. At both instances the settlement were made of $602 million and $556 million respectively that double Anheuser’s stake value in Modelo based upon the Mexican stock exchange but left them without controlling stake of the board and the ability to control decisions because they only had 10 of the 21 seats on the board of directors. The venture was undoubtedly a bad marriage that could have been avoided if Anheuser negotiated a penalty clause that protected it against side deals that could affect its supply or distribution chain....
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