5 cases of reputational disasters of famous companies

Wrong answers, situations ignored up to innocent death. Reputational crises and business reputation risk can have devastating impacts on a company, from a small local producer to a powerful multinational.

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Each company can have its own ups and downs, caused by can disparate factors and that can lead to the most different consequences, that can be avoided with a Crisis Management strategy.

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There may be a case of unfair or, worse, malicious online competitors trying to copy their work: theft of photographs and videos, articles and texts, the entire site and up to the piracy of the content sold, in case.

Instead, you might find a recent flow of positive reviews about your business, how it works towards users and how they are satisfied: from the famous Google review, to social media to websites dedicated to the collection of “stars”.

So if you see a positive event, you can only be happy and work in the long term to maintain this trend.

On the contrary, and with negative reviews, an unpleasant situation for the company will have to be taken into account with the greatest possible attention and seriousness. 

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Depending on the extent of the incident, it will be necessary to think about the timing of action, i.e. whether in the long term (cases of falling sales) or in the short term (hacked site).

But the danger at the top of the podium for power and impact is in the hands of the online reputation.

It can be your best friend as the worst enemy.

5 cases of reputational disasters of famous companies (that you probably did not know)

Reputation is the element that controls the entire market, from sales, to customers, to public opinion and to the same value of the brand. And when you fall into a reputational crisis, the consequences can be devastating, making the help and work of experts the most valuable resource.

Please keep in mind: if you want to prevent crisis you need to monitor your brand, also with Google Alerts, a free monitoring tool.

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Otherwise, the fate could be the same as one of these N companies that have had to fight aggressive reputational crises, also leading to the collapse of a $9 billion company.

Pret a Manger – may contain traces of…

It is not possible to travel more than two blocks in London without running into one of the shops of the famous English sandwich shop, with 450 shops in 9 continents and of these, 237 only in the British capital.

Famous for its excellent food at moderate prices, using a wide range of high quality products directly from the countries of origin, such as Italian ham.

However, in the autumn of 2018 it suffered a severe shock due to the death of a 15-year-old girl, directly related to the brand.

The teenager ate a sandwich of the chain containing sesame, which caused her an extreme allergic reaction. This is because the label of the product had not been specified the presence of this, because of no legal obligations.

In addition, during the course of 2018 there were 6 different cases of allergic reactions on other customers.

They were not aware of what they were consuming.

The company then suffered a dive on the aspect of trust, especially in his native land.

After the last incident the production announced an immediate replacement of all labels not containing the entire list of ingredients. But will it be enough to win back the loyal consumers in 2019?

Ryanair – Rosa Parks would be disappointed

black girl face with garland of flowers

It is difficult to find a company with cheaper airline tickets in circulation. And the protagonist of the story has perhaps understood why.

On an apparently normal flight from Barcelona to England, an aged black woman of Jamaican origin was verbally attacked by an English passenger, focusing everything on racism, from skin color to a foreign accent.

You can think, however, “The gesture is wrong, but the fault is not Ryanair’s”. 

And certainly you can’t blame the company for selling the ticket to this character, but certain responsibilities remain.

  • the company has in fact shown obvious negligence;
  • the man has not been removed from his position;
  • instead, the woman was invited to change place;
  • the entire crew showed little control of the situation.

The man did not report any consequences, while the victim admitted to feeling sadness and depression.

Two lines of apology on Twitter from the Ryanair account were certainly not very convincing to show a true interest. The consequence was the launch of the hashtag #ryanairracist, which became viral on social media.

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Nestlé – self-sabotage course

In 2010, the non-profit Greenpeace company launched a campaign against one of Nestlé‘s leading products, KitKat, concerning the use of palm oil and the direct destruction of forests and the death of orangutans.

This has led to an invasion of users on the Facebook page of the company who were asking not to use this product and thus avoid the harmful consequences.

What did Nestlé do?

  • did not provide answers;
  • deleted most of the comments;
  • published a message saying not to post if the profile image was an altered version of their logo; otherwise it would be deleted.

Not to mention, they managed to create a wide and spacious pit, enough to miserably lose on the issue and eliminate palm oil. 

Probably the social incident was not the reason for Greenpeace’s success, but certainly the lack of serious brand interest led to a rapid defeat.

Theranos – the collapse of a giant

Crystal skyscraper

Much has been said about the Theranos case, a company that should have been a pioneer in the medical revolution.

For those who do not know the history, the company was founded in 2003 by the 19-year-old Elizabeth Holmes, with the aim of creating a system for faster and cheaper blood testing.

Over time, Theranos has received hundreds of millions of dollars in investment, all thanks to the enormous expectations that the future would have to hold.

However, if Elizabeth was initially confident, over the months she became increasingly aware of the impossibility of her goal, which was to create a small machine capable of analyzing more than 300 elements from a few drops of blood. 

Despite this, the company has always remained on its feet, keeping its promises high and firmly declaring the non-real progress

That made it valuable in total, $9 billion, built on a big lie. And in 2015, the world collapsed under its feet, revealing the trick to the public.

Although the story may sound like a trick, it is actually a reputational crisis taken to the extreme; with the difference that here the situation was irrecoverable, because it was based on fraud.

If Elizabeth and the management team had opted for a more honest and realistic strategy, the consequences would certainly have been different, perhaps avoiding the dissolution of the company, which happened in 2018.

Adidas – bombs and sarcasm

Tight fist holds a medal

Then there are those situations where the risk of a reputational crisis has been avoided by a heartbeat, thanks to a rapid and correct move in a very short time.

Bombs and sarcasm, two subjects who can live together in the same discourse only between intimate dialogues and consciously close to black humor

Certainly not in the subject of the email sent by Adidas to the participants of the Boston Marathon in 2017.

The same event where 4 years before a terrorist attack was carried out, cost the lives of several people.

“Congrats, you survived the Boston Marathon!”

This is the title of the message sent by the sports giant, really not very delicate and certainly to the public less indicated.

However, the company has moved in a short time, releasing public apologies about the incident and stating that it was a mistake of the email marketing team. 

With this, the company avoided a social media scandal that could have cost it a lot of money.

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