James E. Burke, the CEO of Johnson & Johnson, oversaw the company's response to the 1982 Tylenol poisoning crisis in which 7 people died after taking cyanide-laced Tylenol capsules. In response, J&J recalled over 30 million bottles of Tylenol at a cost of $100 million and introduced new tamper-resistant packaging. Through decisive and customer-focused actions, J&J regained consumer trust and over 30% of the pain reliever market within a year, demonstrating how respecting customers and maintaining trust can help companies overcome crises.
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Tylenol case
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3. In 1982 witnessed a Tylenol poisoning murders
across Chicago in the USA . The panic , wide-
spread fear spread out very fast , but above all
was a best-ever response of Tylenol company
over poisoning murders to a major public .
James E. Burke , the CEO of Tylenol producer
Johnson & Johnson died in the age of 87 . He
would be known for his strong , decisive , calm
and recognized as an excellent company being
able to overcome crisis . He is considered one of
the 10 best CEO according to Fortune magazine .
4. James E. Burke with an oversize model of
the Tylenol that replaced capsules.
5. In 1982, seven people died
after taking capsules of Extra-
Strength Tylenol that had been
laced with cyanide.
The level of cyanide was
claimed to be enough to cause
fatal doses .
The pills were said to be
tampered when sold in the
drugstore and supermarket .
As a result , J&J reputation was
in threat of being ruined .
However , they did not shift
blame but to receive their
mistakes as not control it well
enough .
6. On the afternoon of the
first deaths, the
company:
Set up toll-free
numbers manned by
company employees (
hotline ) for assistance .
Sent 450,000 telex
messages to doctors’
offices, hospitals and
trade groups.
Stopped advertising .
7. Less than one week after that ,
Tylenol spent $100 million to
recall 32 million bottles of
Tylenol capsules from store
shelves.
FDA and FBI felt that a recall
would be an overreaction. But
J&J’s management put
customer safety ahead of their
financial concerns.
The company also established
relations with the Chicago
Police Department, FDA and FBI
to maintain a role in searching
for the person responsible for
the deaths .
Became the first company to
adopt new triple-sealtamper-
resistant packaging rules.
8. Within months, J&J re-
introduced Tylenol capsules to
consumers. It distributed over
40 million $2.50 coupons
(enough to purchase a good-
size bottle) to compensate
customers who threw away
Tylenol during the scare. They
also created a new pricing
program that saved
consumers up to 25%.
In a 1986 news conference,
Mr. Burke announced that
Johnson & Johnson would stop
selling over-the-counter
products in capsules, which
could be tampered with, and
switch to solid caplets.
9. As the tough decisions were
being made by Mr. Burke
and his executive team,
many were skeptical. They
warned that the company's
reputation would never
recover.
Less than a year after re-
launching Tylenol, J&J
regained a 30% share of the
market and once again
became the top-selling pain
reliever. Today, Tylenol
enjoys the highest ratings
for consumer confidence,
and is the most prescribed
over-the-counter pain
reliever.
10. Finally , the decisions were
part of a wise plan to
salvage the reputation and
revenue of J&J, and return
Tylenol to commanding
market share. Even so, Mr.
Burke proved that
respecting each customer
can help the company .
Maintaining trust among
customers helped J&J
overcome crisis, and in a
2003 Harvard Business
School profile, Mr. Burke
noted that “Nothing good
happens without trust. With
it, you can overcome all
sorts of obstacles.”