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
1. About Smithkline
1.1. ABOUT SMITHKLINE/BEECHAN GROUP
1.2. ABOUT CONTAC®
1.3. ABOUT THE HAPPENINGS IN 1986
2. Strategic Analysis
2.1. EXTERNAL ENVIRONMENT
2.1.1. Demand on the Product
2.1.2. Features of the Product
2.1.3. OTC – Over-the-Counter
2.1.4. Competition on the market
2.1.5. Tampering Incidents
2.2. FIRM INTERNAL
2.2.1. Finance
3. Suppliers
3.1.1. Marketing strategies
4. Strategy Formulation
4.1. BUSINESS LEVEL
4.2. SWOTANALYSIS
4.2.1. Strength
4.2.2. Weakness
4.2.3. Opportunities
4.2.4. Threads
4.3. CORPORATE LEVEL
5. Strategy Implementation
5.1. ADAPT STRUCTURE TO STRATEGY
5.2. STRATEGIC LEADERSHIP
5.2.1. Detecting and Resisting Tampering
6. Glossary
6.1. PPA(PHENYLPROPANOLAMINE)
6.2. MYSTERY OF THE POISENED CONTAC
Research Objectives and Core Themes
This study examines the strategic challenges faced by SmithKline Consumer Products following the 1986 product tampering incidents, focusing on the company's efforts to relaunch its Contac brand through crisis management and organizational adaptation.
- Strategic analysis of the over-the-counter (OTC) pharmaceutical market.
- Crisis response strategies in the face of product tampering and corporate blackmail.
- SWOT analysis regarding brand perception and product safety.
- Market positioning and competitive dynamics of OTC cold remedies.
- Implementation of tamper-resistant packaging and organizational strategic leadership.
Excerpt from the Book
1.3. About the happenings in 1986
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.
Summary of Chapters
1. About Smithkline: Provides a historical overview of SmithKline's corporate development, including key mergers and the brand identity of Contac prior to the 1986 crisis.
2. Strategic Analysis: Analyzes the external market environment, competitive landscape, and internal corporate status of SmithKline leading up to the tampering events.
3. Suppliers: Discusses the broader marketing challenges in the OTC sector and the difficulty of maintaining brand visibility in a crowded market.
4. Strategy Formulation: Evaluates the business and corporate-level strategies, utilizing a SWOT framework to address the aftermath of the poisoning crisis.
5. Strategy Implementation: Outlines the management actions taken to adapt the corporate structure and strategy to ensure consumer safety and restore brand trust.
6. Glossary: Defines technical terms and details the resolution of the criminal case involving the poisoned Contac capsules.
Keywords
Contac, SmithKline, Product Tampering, Crisis Management, OTC Drugs, Relaunch, Pharmaceutical Industry, Consumer Safety, SWOT Analysis, Marketing Strategy, Brand Protection, Poisoning, Market Share.
Frequently Asked Questions
What is this research paper primarily about?
The paper focuses on the crisis management strategies employed by SmithKline Consumer Products after its Contac brand became the target of a product tampering blackmail scheme in 1986.
What are the central themes discussed?
The central themes include corporate crisis response, market dynamics in the OTC pharmaceutical sector, the importance of consumer trust, and the challenges of product safety in the 1980s.
What is the primary goal of the author?
The primary goal is to analyze how a corporation manages a strategic transition and brand restoration following a severe external threat that compromises product safety and financial performance.
Which methodologies are used in this study?
The author uses a qualitative case study approach, incorporating historical data, market analysis, and a SWOT analysis to evaluate the firm's strategic environment and decision-making processes.
What is covered in the main body of the work?
The main body covers the external competitive environment, an analysis of the tampering incident, the firm's internal financial standing, and the subsequent formulation and implementation of strategic responses.
Which keywords characterize this paper?
Key terms include Contac, SmithKline, Product Tampering, Crisis Management, OTC Drugs, and Brand Protection.
What role did media play in the 1986 crisis?
Media played a crucial role through ABC News, which received the blackmail calls and acted responsibly by notifying the company and tempering public disclosure to prevent mass panic while ensuring safety.
How was the perpetrator finally caught?
The perpetrator, Edward Marks, was caught because his fingerprints, already on file with the FBI due to a previous arrest, were matched to those found on a capsule bottle.
Why did the perpetrator target SmithKline?
The perpetrator was not motivated by a desire to kill but by a desire for financial gain; he hoped to manipulate the stock market by short-selling SmithKline stock to profit from the resulting price drop.
- Arbeit zitieren
- Stefan Schweig (Autor:in), 2005, Smithkline Consumer Products. The Contac® Relaunch, München, GRIN Verlag, https://www.grin.com/document/45067
