Assignment: The New Year's Eve Crisis A Report Submitted To Prof. Rohini Patel

Assignment : The New Year’s Eve Crisis
A Report Submitted to
Prof. Rohini Patel
For End Term for the course
Written Analysis and Communication-I
By
SUBHAJIT ROY
Section D
Roll No. 1911264
On
16-09-2019
SITUATION ANALYSIS
From the case we can clearly see that there were lots of issues and concerns before the acquisition
of the Southern Pasta Company. Also the problems were not taken into consideration with due
diligence. But I think that the problems could have been prevented if we were more alert and
serious with the deal and also we could have sent our staff there to have a thorough check of the
plant. It was already known that before the acquisiton in May 2001, Southern had to recall its
seafood-stuffed shells due to salmonella contamination. Although the company then put in a system
to track individual production lots and made other changes but we blindly believed them and their
consulting documentation which said that “they had cured the problem”. We should have instead
been physically present at the factory in Tampa and should have checked the manufacturing process
with our own eyes. Again from the fact that Friedrich Walz was not willing to share much
information to us knowing that his company was being acquired by us again tells us that there was
something fishy which we did not pay attention too. The salmonella contamination was due to the
cooking system of the plant. Also from Fred it was clear that everybody from the Southern knew
that. This clearly shows why Walz was not willing to share much information with us.
Currently our situation is very critical as the product had already left the distribution and we cannot
recall it back now. It means that the inventory of the restaurants is already fill with the contaminated
salmonella and once they start serving it to their customers it can lead to serious repercussions for
both. According to our lawyer our liability is limited since the product has been produced by
Southern prior to the acquisition and considering the fact that the restaurant chain had cooking
standards which says that the stuffed shells should be cooked to at least 160 degrees Fahrenheit.
Also after the May recall, the chain had sent representatives to Southern’s plant and assisted in the
retooling process. But considering the fact that we had already acquired Southern it does not matter
who has produced because if anyone fells sick after eating those pastas we will be sued along with
the restaurant. So the further steps should be taken with due considerations of all the probable
scenarios.
PROBLEM STATEMENT
After getting the news of the contamination of our product by Salmonella we are in a difficult
situation since the product has already left our distribution. The problem is about which step to be
taken that is whether to notify the restaurant chain and pull the product back from the market or
just believe that the restaurant’s cooking standards will help kill the bacteria and no problem will
occur in the near future and everything will be fine.
OPTIONS
1) We should go ahead and tell the restaurant about all the details regarding the contamination.
2) We should withheld the information and instead rely on the cooking standards of the restaurant
and hope for the best.
3) We should notify the restaurant about the contamination and immediately replace all the affected
product with a fresh lot of product.
CRITERIAS
1) Profit and Loss
2) Probable loss of an important customer
3) Tarnishing of our image in the market and probable shut down of our business
EVALUATION OF OPTIONS
Option 1:
Criteria 1: If we go with option 1 then it will ultimately lead to a huge loss for us since the restaurant
will discard the product and we have to provide the refund for the product and losses they suffered.
Criteria 2: It can definitely result in loosing our valuable customer since this is the second instance of
this incident.
Criteria 3: It will not lead to any tarnishing of our image in the market and we do not have to shut
down our business since the restaurant will pull the product out from the market.
Option 2:
Criteria 1: If we go with option 2 then it may or may not lead to loss depending on whether their
cooking standards can eliminate the bacterias or not.
Criteria 2: Again it depends on the quality of their cooking standards and whether the bacterias get
killed completely and if not then we will definitely loose this customer
Criteria 3: Again it boils down to whether the restaurant is able to kill all the bacterias unknowingly.
If it does not then lets be assured that we will face serious legal issue from FDA which will lead to
tarnishing of our market image and may be we have to shut down our business
Option 3:
Criteria 1: If we go with option 2 then it will ultimately lead to a huge loss for us since the restaurant
will discard the product and we have to provide with a fresh lot of products.
Criteria 2: It will help us retain this customer since we will take all the responsibilities of the
contamination and also provide them with a new lot of fresh products
Criteria 3: It will not lead to any tarnishing of our image in the market and we do not have to shut
down our business since the restaurant will pull the product out from the market
RECOMMENDATION
Considering all the options and their evaluations I got this feeling that we should go with option 3
where the risk is nil. Although option 2 seems best if the cooking standards does not fails but it is not
right ethically and also the risk involved is very high and the repercussions can be humungous. So
out of option 1 and 3 option 3 is a better one since it will assure the restaurant of replacing the
affected lots with a new one and this will help retain the customer base. It will also help maintain or
market image as FDA will not be able to know.

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Assignment : The New Year’s Eve Crisis

Prof. Rohini Patel

For End Term for the course

Written Analysis and Communication-I

1) Profit and Loss

2) Probable loss of an important customer

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