Tainted Milk Powder

Topics: 2008 Chinese milk scandal, Melamine, Government Pages: 7 (1958 words) Published: March 20, 2013
Question 1: Given strong profit growth, has there been any damage to Baidu.com’s reputation?

Yes, there was damage to Baidu.com’s reputation.
The examples of damage to Baidu.com’s reputation are:
* The rumors made the company’s information appear unreliable. * Baidu.com’s users may start to boycott from using this search engine.They are hoping that Baidu.com may change their behavior after the protest. * Due to the boycott activity, the number of daily visitors may reduce drastically. * Due to the number of visitors decreased, those existing advertisers may withdraw their advertisement and switching to other company. As a result, they lost valuable contracts/customers. * Baidu’s shareholders also may sell off their shares in market. As a result, the share price dropped, this is also indicating that they lost public trust.

Question 2: What the future reputational damage affect and how could it be measured?

* Damage public trust, number of viewer and user drop
* Mostly for a company to gain trust and confidence from the user of their product is not easy and take time. * But, to damage it just take a short period of time. For example doing unethical action in managing business operation. * Many news and rumors spread in media about Baidu.com have received some payment from tainted milk manufacturer for not advertise any news about them. * No concrete evidence about the rumors, but could damage their reputation, public trust and confidence of their source of information. * The number of viewer or user that use their search engine that been lower after the spread of bad news and rumors could be used to measure for the damage of public trust.

* Investor not interested to invest, share price drop
* The bad news and rumors about the unethical action by this company triggered the public trust toward them * It makes many people debate and talked about their action after the spread of issue regarding information hidden, thus make many speculations towards this company. * Too much bad speculation been made toward their company impact to drop of share price. * We think that it would make investor or future investor might be not interested to invest in this company if the rumors are true due to the share price dropped continuously.

* Affect company profitability, low income from advertiser * When the trust or confidence from the user or people toward this Baidu.com has decreased, it means that the viewer or user their search engine also decreased. * Thus, the better for advertiser to promote their product in the search engine which have more viewer compared to Baidu.com * Besides, we think that Baidu.com might have to reduce the advertising fee in order to attract the advertiser use their search engine to promote products * Thus, impact from advertiser being changed to the other search engine or lower the advertising fee make the Baidu.com would faces low profitability and income.

Question 3:
What steps could Baidu.com take to restore its reputation, and what challenges will it have to overcome? There are 3 steps to restore the company reputation as below: 1. Know The Truth
* The Company will first have to look at themselves and seek the reality. * Is there any truth in what the people say about themselves? * Baidu.com will have to look at the rumor of how they were said to have accepted payments to withholding a company’s information from online searches.

2. Take Action
* Baidu.com might held a press conference to admit its wrong doing and try to fix it from there. * Although there were many are upset by the admittance, but they will be more upset if the Baidu.com have not admitted to their wrong doing. * That’s the matter related to trust and knowing that they will stand up for the mistake that have been made.

3. Dispel the Rumors
* Baidu.com will have to overcome the rumor of how...
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