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Arla Foods and the Cartoon Crisis A Case Solution

Solution Id Length Case Author Case Publisher
2862 1509 Words (7 Pages) Harry Lane, Mikael Sondergaard, David Wesley Ivey Publishing : 9B08M005
This solution includes: A Word File A Word File

Arla Foods, a Danish dairy company, faced a serious challenge after a Danish newspaper published caricatures of Muhammad, sparking huge protests by Muslims worldwide. Protests became violent in several nations, while consumers in Saudi Arabia chose to boycott Danish products instead. Because Arla Foods had a significant dairy share in Saudi Arabia, the boycott was disastrous for the company because Saudi Arab was the most important market for Arla Foods, which held a near-monopoly on domestic dairy products with its three major brands, Lurpak, Puck and Three Cows brands. The boycott also spread to other Middle Eastern nations, including Lebanon, Kuwait, Qatar, and the United Arab Emirates, causing Danish items to be removed from store shelves and Arla Foods to suffer major financial losses. As the boycott grew more intense, the company's efforts to alleviate the situation proved difficult as the tensions rose beyond its control and turned violent.

Following questions are answered in this case study solution:

  1. Why does Arla find itself in this situation?

  2. What are the major societal issues or tensions that are raised in this case? What is your viewpoint about these tensions?

  3. What are the management issues that Arla needs to consider and what should Arla do?

  4. What stakeholders and/or areas of action does Arla need to consider in developing a crisis management plan?

Case Study Questions Answers

1. Why does Arla find itself in this situation?

Arla found itself in this situation as a consequence of a Danish newspaper publishing cartoons of Muhammad in the name of freedom of speech. The publishing of these cartoons sparked worldwide uproar among Muslims, who saw them as blasphemous and disrespectful. Protests, attacks on Danish embassies and companies, and demands for a boycott of Danish products followed as a result. Arla Foods, a Danish-Swedish cooperative, had a significant presence in the Middle East, particularly in Saudi Arabia, where it owned a large dairy and had a strong market share with brands like Lurpak, Puck, and Three Cows, which were market leaders in the categories of butter, cream, dairy spread, and feta. Arla Foods experienced significant effects when the boycotts were begun, as its items were taken off store shelves and replaced with placards showing that the Danish product was once here, further deteriorating Arla’s brand image in the region. The boycott swiftly expanded to other Middle Eastern countries, including Egypt, Kuwait, Qatar, Bahrain, and the United Arab Emirates, causing Arla's business to suffer even more. The situation was exacerbated when Arla's products were included in news stories about the boycott effort, and religious leaders urged worshippers to avoid Danish items. Some local Muslims attacked and harassed Arla staff, and employees were physically assaulted, and the prohibited Arla products were removed off store shelves. Arla had miscalculated the damage to its business and had not anticipated the scale of the boycott, especially after the religious community called for a boycott, the retailers who would have backed Arla also had to respond in kind.

As a result, it is reasonable to conclude that Arla found itself in this predicament primarily as a result of the publication of the contentious caricatures, which resulted in a boycott of Danish products in the Middle East, resulting in a major loss of business for the company in the region.

2. What are the major societal issues or tensions that are raised in this case? What is your viewpoint about these tensions?

In this case study, various societal concerns or conflicts were raised, one of which was the disagreement between limitations on free speech and religious sensitivity. The publishing of the Muhammad cartoons generated a discussion about the boundaries of free speech and expression. While some praised the freedom to free expression, others claimed the drawings were rude and disrespectful of religious views. This conflict demonstrates the difficulty of balancing freedom of expression with religious sensibilities. 

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