Contac capsules have helped millions of Americans endure the sniffles, but in 1986 every store in the U.S. that carried the popular cold remedy was ordered to get it off the shelves. Manufacturer SmithKline Beckman of Philadelphia was forced to recall Contac and two other fast-selling encapsulated products, the antihistamine Teldrin, for allergies, and Dietac, for appetite control. The reason was familiar and chilling: a murderous blackmailer intent on intimidating a corporation by poisoning its products. A man calling himself Gary telephoned ABC News claiming he had placed 25 tainted Contac capsules in stores throughout the country. ABC Anchor Peter Jennings tipped off SmithKline while judiciously holding the story off the air. The next day, SmithKline got more calls, apparently from the same man. All capsules were unsafe, he said, and he wanted to get them off the shelves.
The caller named stores in Houston and Orlando, where he said he placed capsules laced with cyanide or rat poison. Investigators initially found capsules spiked with sugar and cornstarch. The adulteration was easily detected. The man had crudely cut into the plastic blisters encasing the capsules.
At first the company stopped short of a recall, telling retailers only to stop selling the drugs until further notice and warning consumers against using any of the capsules purchased after March 15. At week's end, however, laboratory tests found nonlethal doses of warfarin, an anticoagulant used in rat poison, in two Contac and three Teldrin capsules. SmithKline was frightened into acting.
The recall came barely six weeks after a 23-year-old woman from Westchester County, N.Y., died of cyanide poisoning after taking an Extra-Strength Tylenol capsule. In 1982 seven people died from cyanide-laced Tylenol capsules, but it was the most recent death that persuaded Johnson & Johnson to stop making capsules altogether and to reissue the remedy in a tamper-resistant "caplet" form. Whether SmithKline will also abandon capsules was not clear. Unlike Tylenol, the SmithKline products are "time-release" medicines, which break down slowly and work best in capsule form. Besides, Contac accounts for some $50 million in SmithKline's sales, half of its over-the-counter drug business. Despite the drug's wide popularity, it could conceivably fall victim to a single unbalanced terrorist.
Table of Contents
- About Smithkline
- About Smithkline/Beechan Group
- About ContacⓇ
- About the happenings in 1986
- Strategic Analysis
- EXTERNAL ENVIRONMENT
- Demand on the Product
- Features of the Product
- OTC-Over-the-Counter
- Competition on the market
- Tampering Incidents
- FIRM INTERNAL
- Finance
- Suppliers
- Marketing strategies
- Strategy Formulation
- BUSINESS LEVEL
- SWOT ANALYSIS
- Strength
- Weakness
- Opportunities
- Threads
- CORPORATE LEVEL
- Strategy Implementation
- ADAPT STRUCTURE TO STRATEGY
- STRATEGIC LEADERSHIP
- Detecting and Resisting Tampering
- Glossary
- PPA (PHENYLPROPANOLAMINE)
- MYSTERY OF THE POISEN ED CONTAC
- References
Objectives and Key Themes
This case study analyzes the Smithkline Consumer Products' response to the 1986 Contac tampering incident. The objective is to examine the company's strategic analysis, formulation, and implementation in the face of a significant crisis that threatened its product line and reputation. The study uses this specific event as a lens to explore broader issues related to crisis management within the pharmaceutical industry.
- Crisis management in the pharmaceutical industry
- The impact of product tampering on brand reputation
- Strategic response to a major product recall
- Balancing public safety with business interests
- The role of strategic leadership during a crisis
Chapter Summaries
About Smithkline: This chapter provides a brief history of Smithkline, tracing its development from a single drugstore in Philadelphia to a major player in the global healthcare industry through mergers and acquisitions with companies like Beckman Instruments and the Beecham Group. The narrative highlights key milestones and acquisitions, showcasing the company's growth and expansion into various sectors of the healthcare market. The chapter establishes the company's history as a foundation for understanding its subsequent response to the Contac crisis.
Strategic Analysis: This chapter delves into the external and internal environment surrounding Smithkline's Contac product. The external analysis examines market demand, product features (including the unique time-release capsule format), competition within the over-the-counter (OTC) cold medicine market, and the critical impact of the product tampering incidents. The internal analysis, though less developed in the excerpt, sets the stage for a discussion of the company's internal resources and capabilities as they relate to crisis management. The significance of this chapter lies in its framing of the challenges Smithkline faced leading up to the recall.
Strategy Formulation: This section focuses on Smithkline's strategic response at both the business and corporate levels. It is expected that this part would detail a SWOT analysis, outlining the company's strengths, weaknesses, opportunities, and threats, informing the strategies employed to address the crisis. The business-level strategy would have centered on managing the immediate crisis of the recall and maintaining market share, while the corporate-level strategy would address broader implications for the company's image and future product development. The effectiveness of these strategies would be a key element of the analysis.
Strategy Implementation: This chapter likely discusses how Smithkline adapted its organizational structure and leadership to manage the crisis. It would include actions taken to detect and resist future tampering attempts, emphasizing the operational changes implemented in response to the threat. This involves not only immediate crisis response but also long-term measures to prevent future incidents and restore public trust. The details of this implementation phase would be crucial in evaluating the overall success of the company's response.
Keywords
Smithkline Beecham, Contac, product tampering, crisis management, product recall, pharmaceutical industry, strategic response, SWOT analysis, brand reputation, time-release capsules, OTC medications.
Smithkline Beecham and the 1986 Contac Tampering Incident: FAQs
What is this document about?
This document provides a comprehensive preview of a case study analyzing Smithkline Consumer Products' response to the 1986 Contac tampering incident. It covers the company's strategic analysis, formulation, and implementation in the face of this significant crisis, exploring broader issues related to crisis management within the pharmaceutical industry.
What are the key themes explored in the case study?
The case study examines crisis management in the pharmaceutical industry, the impact of product tampering on brand reputation, strategic responses to major product recalls, the balance between public safety and business interests, and the role of strategic leadership during a crisis.
What is included in the Table of Contents?
The Table of Contents includes sections on: About Smithkline (including its history and ContacⓇ), Strategic Analysis (external and internal environments), Suppliers and Marketing Strategies, Strategy Formulation (business and corporate levels, SWOT analysis), Strategy Implementation (adapting structure and strategic leadership), a Glossary (including PPA and the poisoning mystery), and References.
What does the "About Smithkline" section cover?
This section provides a brief history of Smithkline, its growth through mergers and acquisitions, and its key milestones leading up to the Contac crisis in 1986.
What is covered in the "Strategic Analysis" section?
This section analyzes the external environment (market demand, product features, competition, and tampering incidents) and the internal environment (financial aspects) surrounding Smithkline's Contac product before and during the crisis.
What does the "Strategy Formulation" section discuss?
This section details Smithkline's strategic response at both the business and corporate levels, likely including a SWOT analysis to identify strengths, weaknesses, opportunities, and threats, and the strategies developed to address the crisis.
What is included in the "Strategy Implementation" section?
This section discusses how Smithkline adapted its organizational structure and leadership to manage the crisis, including actions to detect and resist future tampering attempts and measures to restore public trust.
What keywords are associated with this case study?
Keywords include: Smithkline Beecham, Contac, product tampering, crisis management, product recall, pharmaceutical industry, strategic response, SWOT analysis, brand reputation, time-release capsules, and OTC medications.
What is the overall objective of the case study?
The objective is to examine Smithkline's strategic response to the 1986 Contac tampering incident, using this event to explore broader issues related to crisis management within the pharmaceutical industry.
What are the chapter summaries about?
The chapter summaries provide concise overviews of each section, highlighting the key information and analysis presented in each chapter of the case study.
- Quote paper
- Stefan Schweig (Author), 2005, Smithkline Consumer Products. The Contac® Relaunch, Munich, GRIN Verlag, https://www.grin.com/document/45067
