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Beech Nut Nutrition Corporation A1 Case Solution

Solution Id Length Case Author Case Publisher
2694 1746 Words (6 Pages) Lynn Sharp Paine Harvard Business School : 392084
This solution includes: A Word File A Word File

Beech-Nut Nutrition Corporation is a company owned by Nestle. The company is known for providing the best products of the best quality. The company cannot compromise on its quality. Beech-Nut claims that its products contain no sugar or salt. Anderson has been appointed as the CEO of the company, Anderson entered the office, and from the shore which is the Vice president of finance, he got to know that on Friday at Canajoharie, New York, plant a private detective had arrived and he claimed that the apple juice concentrate received at Beech-Nut is nothing but sugar water. This is an alarming situation for the company as Universal, the supplier of apple concentrate has been supplying the raw material since 1977, and over the years, the research team has not found any test which is fully satisfactory about the adulteration of the product. Not just this, the company is not on a tight budget, and at this stage, they cannot afford to change their supplier.

Following questions are answered in this case study solution

  1. Would you recommend product recall as one of the initial steps Anderson can take? What would be the implications of such a product recall?

  2. In Andersen’s position, what would be your concerns on learning about the Friday incident?

  3. In Storer’s position, what would be your assessment of the apple juice situation?

  4. What are the origins of Anderson’s problems?

  5. What would you advise Andersen to do? What do you think he will do?

Case Analysis for Beech Nut Nutrition Corporation A1

1. Would you recommend product recall as one of the initial steps Anderson can take? What would be the implications of such a product recall?

The case study suggested that Anderson's initial step be product recall, as it will help Anderson to analyze the past trends of the product. Anderson could recall similar instances in which the product is claimed to be adulterated or impure by several authorities. Product recalls it will also help Anderson to understand and to gain more in-depth knowledge about the product. The company has faced accusations from their SIRA (Stable Carbon Isotope Ratio Analysis) testing about the product containing cane sugar. But some the authorities have shown opposite results. According to the New York Times article, Beech-Nut's apple juice was ranked among the best pure apple juice. New York Times tested 13 samples, and Beech-Nut's apple juice was the only juice that met the criteria of being pure apple juice. The testing of samples was done using FDA tests. A test conducted by Nestle in the 1980s has proven that the quality of the product is better than Heinz or Gerber. 

Being the CEO of the company Anderson has to make important decisions as, since 1977, the Universal Juice Company has been their supplier, and also, their price is 25% less than the other suppliers. Product recall is necessary to ensure that any action taken related to the product is purely on the basis of product testing and without any influence of a detective or an association. Also, if Anderson thinks of validating the claims of the detective, then they may lose their supplier and also, they have to bear a lot of loss as finding a new supplier, negotiating with the supplier, and the finalization process will take a lot of time. Before taking any step, the company should make the product go through several tests, and the initial step should be going with the product. Anderson's step will have a huge impact on the company, so he has to analyze the product first before taking any decision. Anderson's decision could impact the profitability and the reputation of the company negatively. 

2. In Andersen's position, what would be your concerns about learning about the Friday incident?

Andersen's concerns regarding the Friday incident would be whether they should agree with the detective and discontinue their contract with the universal juice company, which has been Beech Nut's supplier since 1977. The company is known for providing the best quality product to their consumer without any sugar or salt, and such claims might damage the reputation of the company. Also, being the CEO of the company, it's his responsibility to ensure that the products they are offering to their customers are of high quality. Anderson is in a difficult spot as his decision could lead to problems for the company. 

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