Crisis Management And Culture Business Essay


As per Kotler when a consumer buy a product, they exchange something of value to get something of value benefits of having or using the product. Innocent drinks use Value-based pricing rather than Cost-based pricing i.e. their price is customer driven. As per Innocent drinks website states that their prices compared to market is much cheaper than that of homemade. To make a litre of strawberries & bananas and their mangoes and passion fruits recipe one of their staff Lucy T went to a leading supermarket and bought the exact amount of ingredients as per their market research they proved that their products are cheaper than of homemade and showed the comparison through graph. They also display offers going on supermarkets so that their customer's gets the best deal.

"Innocent drinks mission is to make it easy for people to do themselves some good and to make it taste nice at the same time". All their products are healthy i.e. Smoothies and Orange juices are 100% whole crushed fruits and pure, its enriched with vitamins, fibre and phytonutrients. A veg pot provides 3 portions of vegetables. These products do not contain a any preservatives, added sugar, additives or stabilisers. They stated in their website that on 7th April 2009 ,The Department of Health revised the smoothie portion guidelines i.e. their 2 portion includes 80g of crushed fruit or vegetable and 150ml of pure juice. As per Department of Health(2000) findings they claimed that, in a day by eating minimum 5 different portion of fruits and vegetable mix, people can minimise the risk of heart diseases and cancer by 20% .Innocent smoothies contain at least 5 fruits as per the graph.

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According to Thomas at Marketing magazine , Innocent has added another product in its case i.e. Innocent squeezes and has launched Orange juice to compete with Tropicana apart from that they launched seasonal winter smoothie to fight the chill weather.

10% of their profit is donated towards their own charity that funds development projects in the countries to buy fruits. Founded in 2004, their vision is to make futures for the world's deprived people . Apart from this their projects includes:-

Buy one grow one tree- To aid rural Indian communities it's a project wherein more than 86,000 to be planted. Big Knit Choir- Charity to help the aged and their concerns by knitting bobble hats, it raised more than £200,000 in 2008. Microloan Foundation- In helps women through training and loan. It helped setting 12 business cooperatives in Malawi in 2007.

As per their website it states that "We sure aren't perfect, but we're trying to do things right". They majorly concentrate on five simple elements on ethics, they are:- Keeping things natural -only 100% pure fruits and vegetables are used. Responsible ingredients -healthy drinks

Sustainable packaging- 100% recyclable and renewable bottles and cartons. Resource- efficient business-Business done with conjunction with Mother Nature by focusing on reducing carbon footprint. Sharing the profits- Each year 10% of their profit goes to the foundation. Employees-They have been voted the best Graduate employers in UK in 2009 as the recruits were trained well and in the end of last year their first line of orange juice was introduced. Apart from this in individual level company helps employees to be aware towards environment by thinking before travelling by plan, to use alternatives to fossil fuels and so on. Suppliers-They are covered with certificates if not company has its own set of standards to do business with them and since most of them are individual distributors that maintain a personal touch and responsibility that flows mutually in terms of quality. Since political and economical changes influences prices of Fruits, materials and so. For example change in percentage of VAT. In Sunday Telegraphs per Armistead, 2009,Innocent Drinks has made an attempt to compel the HMRC to remove tax on smoothies stating that under British Tax rules, consumers pay no VAT on "essential food and drinks".

Since smoothies have fruits and has healthy properties should be considered for tax exemption. In this economic recession where banks are going through a credit crunch making customer hesitant to buy products, Innocent is trying proactively to help consumer not to pay VAT and making their products affordable to reach all the market segments rather targeting their high end segment. (Armitstead, 2009)

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As per Mitchell stated that company gets its work life balance talent rich people from diverse cultural background, ages are encouraged to deliver change. Due to face passed lifestyles and time constraint of people to eat and cook nutrient food company is promoting is products on its nutrients factors and utilising governments 5- day campaign as an opportunity to promote its products.AS per the 8th survey conducted by them in 2008 it showed that 78% of consumers were now aware of the benefits of 5 portions and women were more in aware 15%.

As per the article by Raine ,Packaging innovation and technical development to reduce carbon footprints and produces 100% renewable and recyclable packs to fit the shape and size. As per Germain 2009,people in mid twenties with money, eating unhealthy due to fatigue, time constrains and laziness. Innocent drink's target customers were like them. To make things better they made smoothies to gratify the 5-portions programme which is encouraged by government. Ethically branding of their product represents their personality to be natural i.e. being self and honest with innovative and simple packaging that's harmless to nature and that's also their product line. Very innovative and interactive website. They are environmental conscious company by buying fruits from certified farms as well as focusing on the reduction of carbon footprints. Mode of transportation of their fruits is by boats or rails as saves fuel.

Market segmentation is through Facebook, Twitter, linked in and blogs i.e they targeted consumers. Free food and drinks in innocent office displays frequency marketing program. Customer is rewarded due to their frequent buys. In 2007, "FruitStock" free concert was organised and in 2008 they had a village fete thereby adding more variety.

Innocent Drinks Company's corporate communication strategy within the company includes conducting stakeholder analysis to understand their individual stakeholders' needs and attitudes. This involved a series of focus groups with consumers aged 18 and over and with employees of the Innocent Drinks Company. It also included interviews with customers, non-governmental organizations and the media. The consistent use of the colours red and white, the lettering and the model-wave over time is an integral part of the company's corporate visual identity and is important to all stakeholder groups.

If managed effectively corporate reputation can be a valuable asset that makes an organization more resilient in today's competitive environment. "Corporate reputation is influenced by the way in which the company projects its image via behaviour, communication and symbolism". It is a 'multi-stakeholder' construct that can be used to measure how effective an organization's communication system is . When information that stakeholders need to make a decision about a company is insufficient, they will sometimes turn to the reputation of that company to seal the decision.

Crisis management and culture

According to Jones (2000), a good reputation acts as a buffer to companies in times of crisis. After over 200 people, including school children reported feeling unwell in 1999; Innocent Drinks Company was forced to issue recall of its soft drinks in countries in Western Europe including Belgium, France, the Netherlands and Luxembourg. Taylor explained in his case study that a company's public relations and communication strategy should be executed on a global scale. He did this using Hofstede's theory of cultural dimension, which explained how values are influenced by culture in differing nations. Taylor proposed that in countries with high uncertainty avoidance and high power distance, citizens reacted more strongly to this tainting crisis, by forcing the government to place bans on the sale of Innocent Drinks Company related products, while the governments of countries with low uncertainty avoidance and low power distance did not really react to the crisis.

Culture management was also needed to accurately understand the environment they were embarking on. "Culture...consists in those patterns relative to behaviour and the products of human action which may be inherited, that is, passed on from generation to generation independently of the biological genes".

Under the guidance of the new CEO, the company adopted a "think local, act local" approach to marketing, which highlighted the importance of addressing the cultural needs of customers in the local market. Daft maintained the view that although Innocent Drinks Company is a global brand, customers do not drink Innocent Drinks Company globally. As a result, Innocent Drinks Company has been adopting a localized strategy in marketing, advertising, and public relations by carrying out extensive stakeholder analysis as seen in Figure 3. The company also adopted a risk management approach that includes financial, operational, social, environmental and ethical considerations and are of the view that by identifying these risks and the potential consequences they could have on the business, they can proactively focus on these areas and identify ways to more effectively manage their impact on their operations.

Community relations and corporate ethics

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Innocent Drinks Company is now working to become a model citizen by reaching out to local communities and getting involved in civic and charitable activities. Like reputation, corporate ethics and relationship with the external stakeholders is very important for building a positive image. Innocent Drinks Company 's social responsibility and corporate ethics helps build company integrity. In 1960, Keith Davis suggested that corporate social responsibility refers to business decisions and actions taken for reasons at least partially beyond the firm's direct economic or technical interest. Stakeholder management is important here as it reconciles the company's objectives with the claims and expectations being made by them of various stakeholder groups.

Employee relations and Human Resource Management

Human Resource Management (HRM) is one of the most important forms of management within an organization and effective communication is essential for HRM to be successful. HRM is as defined by Bratton and Gold:

That part of the management process that specializes in the management of people in work organizations. HRM emphasizes that employees are critical to achieving sustainable competitive advantage, that human resources practices need to be integrated with the corporate strategy, and that human resource specialists help organizational controllers to meet both efficiency and equity objectives.

The Innocent Drinks Company Company links employee communications and employee relations and believe that they are integral components needed for the success of the organization. Employee Relations, according to Heery and Noon, involves the body of work concerned with maintaining employer-employee relationships that contribute to satisfactory productivity, motivation, and morale. Essentially, Employee Relations is concerned with preventing and resolving problems involving individuals, which arise out of or affect work situations. The employees are the most valued internal stakeholders, as they communicate the product to the company's external stakeholders. Internal Corporate Communication falls under the organizational management department, as seen in van Riel model of integrated corporate communication. It is defined, according to Welch and Jackson as communication between an organisation's strategic managers and its internal stakeholders, [in the case of Innocent Drinks Company , its employees] designed to promote commitment to the organisation; a sense of belonging to it; awareness of its changing environment and understanding of its evolving aims. The Innocent Drinks Company Company follows a similar structure regarding internal communication as depicted in Welch and Jackson's (2007) model (Figure 2). Within the company, corporate messages relayed directly to employees aid in reinforcing employee commitment towards the overall organizational objectives. On the same level, direct communication between managers and their employees helps create a sense of belonging to the organization. This sense of belonging then motivates employees to promote awareness and understanding of the corporate brand to the external stakeholders.

Guest (1990), in his approach to strategic HRM draws on the Harvard model which was associated with the softer side HRM and the Michigan model, which proposes the hard HRM approach. Hard HRM see human "resources" as mainly a factor of production, an expense of doing business rather than the only resource capable of turning inanimate factors of production in to wealth. In contrast, soft HRM places an emphasis on "human" side of things. The soft model focuses on treating employees as valued assets and a source of competitive advantage through their commitment, adaptability and high quality skill and performance.

Fiscal and monetary policy of UK

Government expenditure has been rising rapidly as a proportion of GDP in recent years, and has risen from 39.5 per cent in 2002 to 40.9 per cent in 2003 and 2004 and is anticipated to rise to 41.5 per cent in 2005. Around two thirds of this increase in spending is projected to be on current consumption, whilst one third is on net investment. Between the first and the last of these fiscal years we project that the government deficit, as defined by Public Sector Net Borrowing, will have also increased by 1 per cent of GDP. During that period we expect that the output gap will have closed, and hence the deterioration in the public finances must be seen as a consequence of the policy actions of the Government and not as a result of the economic cycle. These policy actions will have contributed to the current unbalanced state of the economy, where we have strong growth and high government borrowing along with a poor and deteriorating current account.

A fiscal expansion of this size induces a significant rise in output and causes the current account to deteriorate because of a noticeably higher level of imports. Higher levels of demand put upward pressure on inflation through its effects on labour markets. We expect the Bank to set interest rates higher than they otherwise would have been in response to the inflationary consequences of such a fiscal expansion, and this in turn reduces investment. It will also raise the exchange rate and worsen competitiveness, reducing exports and increasing imports further.