Odwalla Case Study

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Valuable lessons have been learned because of the Odwalla crisis in October 1996. Odwalla tackled the crisis head on with open and honest intentions. The recall strategy that was implemented hinged on four objectives: constant internal communication, personalized customer service, fast and effective response, and responsibility. That is admitting when wrong. Buy maintaining this strategy they were able to survive what could have been a destructive end to the company.

On October 30, 1996, the state of Washington Environmental Health Services notified the CEO of Odwalla, Stephen Williamson, of a possible epidemiological link between several cases of E. Coli 0157:H7 and their apple juice. Williamson had a choice at that time to either ignore the problem until there was an official confirmation, which did not come until November 5, 1996, or voluntarily instigate a recall of the tainted products. His choice to order the recall immediately launched their survival strategy. Williamson completed this recall within 48 hours of the terrible news. This recall strategy was not legally necessary. However, it was the ethical and responsible thing to do.

Odwalla had a vision statement it was about nourishing the body whole, yet people were getting sick from their product. As well as one young child died. Williamson followed their core values of honesty, integrity and sustainability. They did not try to defend its policy against pasteurization instead the company admitted its faults. They were held accountable for their negligence and product liability. They pleaded guilty to federal criminal charges and agreed to pay a 1.5 million fine for its involvement in the E. Coli outbreak . They endured the consequences without hiding their head in the sand, believing the consumers deserved to know the truth.

To be a part of the emergency meeting when Williamson and management were reviewing the options and organizing their approach would have been extremely stressful....
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