ARE YOU
AT RISK
www.foodtechnology.co.nz 15
The study,
conducted by
Auckland’s
Accenture, says industry
disruption in three main
categories is already a
reality for most large
companies around the
world, and rather than
being a random event
beyond business leaders’
control, has a pattern
that can be identified,
understood and prepared
for. The study, which
analysed more than
3500 companies with
annual revenues of at
least US$100 million in
82 countries, says 63% of
companies currently face
high levels of disruption,
with 44% of those
showing severe signs of
susceptibility to future
problems. Accenture
chief strategy officer
Omar Abbosh says the
company developed a
‘disruptability index’ by
dissecting disruption
into key components –
then taking into account
presence, market
penetration of disruptor
companies, financial
performance, operational
efficiency, commitment
to innovation and
defences against attack.
“Disruption is continual
and inevitable — but
it’s also predictable,”
Abbosh says. “Business
leaders need to
determine where their
company is positioned
in this disruption
landscape and the likely
speed of change. The
more clearly they see
what’s changing around
them, the better they
can predict and identify
opportunities to create
value from innovation
for their business and
rotate to the ‘new’.”
Business leaders can use
the index to understand
where their industry is
positioned and why,
allowing them to identify
risks and opportunities
– and then prepare
the right strategic
response. “To not only
survive disruption but
thrive when it strikes
requires companies to
transform and grow
their core business
while simultaneously
innovating to create and
scale new businesses,”
Accenture Digital group
chief executive Mike
Sutcliff says. “Embracing
digital is a crucial part
of it. We found that
the lower an industry’s
digital performance,
the more susceptible it
is to future disruption.
Digital technologies can
help make a company
more resilient in times of
disruption in a number
of ways, whether by
driving better outcomes
from existing products,
developing entirely new
digital services, lowering
costs or increasing
barriers to entry.”
criticism and international brand damage
of Ribena unlike anything before it in New
Zealand.
After not receiving a response to their letter
from GSK, the girls took their case to New
Zealand consumer watchdog show Fair Go,
which broadcast a story on the situation
in October 2004. GSK did not appear, but
issued a written statement saying its claim
was correct and related to blackcurrants
and oranges in their natural fruit state. “We
sincerely apologise for the way in which
Anna and Jenny’s complaint was dealt with,”
the company said at the time.
Meanwhile, the Ribena ads continued for
18 months to tell Kiwi consumers that
it contained ‘four times the vitamin C of
oranges’. So the girls – by this stage even
more incensed at how their discovery had
been received – took their complaint to
the government consumer watchdog New
Zealand Commerce Commission.
At the same time, Ribena was under
sustained attack for its high sugar
content…a January 2004 UK Food
Commission journal reported that the 70g of
sugar in a 500ml lunchbox bottle of Ribena
exceeded a child’s recommended maximum
sugar intake by 30% for the whole day. In
Australia, a Consumer Association journal
said Ribena was one of the top 10 ‘foods
that make kids fatter faster’, claiming the
drink was made of mainly sugar and water,
with its sugar content at 11 teaspoons
(exceeding Coca Cola) and blackcurrant juice
from concentrate coming in at just 5%.
The company was eventually prosecuted
and pleaded guilty to 10 representative
charges arising from the advertising claims.
It pleaded guilty to another five charges
relating to false labelling of the RTD Ribena,
which it said contained 7mg of vitamin C
per 100ml, but didn’t have any measurable
vitamin C at all. It was fined more than
$200,000.
It seems surreal that two school students
undertaking basic chemistry research could
undermine the brand of one of the world’s
largest corporations in the blink of an eye.
“We were dubbed ‘The Ribena Girls,’” Suo
recalled later. “We spent the next month
posing with lots of bottles of Ribena and test
tubes. International journalists were calling
and asking strange questions like ‘what
were you wearing when you tested the
drinks?’ A man at McDonalds’s asked me for
my autograph. Life was surreal.”
At the same time, corporate
communications experts were left reeling
at the unpreparedness of the iconic brand
to public scrutiny. In an article in Corporate
Communications: An International Journal,
expert Tony Jacques says the case was a
sad example of “self-inflicted” damage to
an iconic brand. The impact of the “heavily
publicised stumble in such a minor market”
saw New Zealand supermarkets experience
an immediate 8 to 12% fall in sales of
Ribena, and the case provides valuable
lessons for management practice. “Despite
early indications of a problem which had
potential impact around the world, a major
global corporation responded inadequately
to a local situation and, as a result, suffered
prolonged embarrassment at the hands of
two teenagers and unnecessarily severe
damage to its brand and international
reputation,” Jacques says.
“Among the fundamental principles of issue
and crisis management are to recognise
the problem early, to promptly institute
a strategic response plan and corrective
action and, if necessary, to apologise
genuinely and without delay.” Jacques says
the way to prepare for food contamination
crises is simple: ensure systems are
in place to adequately respond to early
indications of an impending issue; promptly
implement a forward strategy and keep to
consistent messages; understand the risk
when legal considerations dominate the
public response; integrate full issue and
threat assessment when planning brand
extensions; and recognise the importance of
genuine and meaningful apologia to achieve
effective image restoration.
A groundbreaking Auckland-based global
study on industry disruption has ripped
apart the widespread myth that market
disruption faced by companies is a random
occurrence…saying nearly two-thirds of
large companies face high levels of risk on
a regular basis.
Jenny Suo and Anna Devathasan
/www.foodtechnology.co.nz
