Kelby Jones, Mike Carpenter, Samantha Jensen BYU COMMS 336Plowman Friday: 5/31/13 HALF-TEAM CASE: IKEAs Horse

Meat PR Problem AGENDA 1. 2. 3. 4. 5. An introduction with a topic sentence, a conclusion and references. Tie-in to public relations issues, and maybe start with a SWOT. What were the organizations options? What would you have done differently? Apply a personal experience.

1. SUMMARY The recent horse meat scandal involving IKEA shows that even the most trusted companies need to safeguard brands and reputations. IKEA is an international, privately-owned furniture company most known for its affordable assemble-at-home style of furniture. As of late 2012, the company has assets of nearly 30 billion and operates in 44 countries around the world. In addition to furniture, IKEA also sells traditional Swedish foods at cafeterias in its storesIKEA is a Dutch company with Swedish roots. In late February 2013, Czech authorities found traces of horse meat in a batch of meatballs being sold in IKEA cafeterias. Within a few days, the popular furniture company was the butt of jokes for selling horse meat. By responding quickly, IKEA was able to protect its good reputation with minimal damage; however, IKEA could have offered more transparency and accepted more responsibility (Higgins, and Stephen Castle) ("IKEA Group Yearly Summary FY12"). Selling horse meat was not something started by IKEA. The horse meat problem had recently been growing in Europe, where numerous companies across several countries had been discovered of selling horse meat. Notable companies including Burger King, Nestl and Tesco

had all been affected. The growing number of once-trusted companies selling horse meat caused concern across Europe, and stricter and more extensive meat testing procedures were enforced; this in turn led to inspectors finding more guilty companies. Before long, IKEA was found on the growing list of companies selling horse meat (Higgins, and Stephen Castle) (Horovitz). Shortly after the discovery of horse meat in its food products in late February, IKEA made a press release stating that it was immediately removing all meatballs and other minced meat products from its cafeteria menus. The horse meat had been traced back to a supplier in Sweden, and that meat had been distributed to almost every country in Europe. (The meat distributed to American stores was not in question.) Although the horse meat had only been distributed to European countries, the issue soon became international as social-media users from all over the world made comments (IKEA Withdraws Meatballs From Sale). Social media surrounding the horse meat scandal exploded and IKEA was at the center of commentary. Opinions in comments were varied. One humorous comment suggested that IKEA could start selling its food in ready-to-assemble packagingmuch like its furnitureso that customers would know exactly what they would be eating. Other comments were concerned and upset, and some users questioned whether horse meat had actually been sold in American stores. IKEAs brand and reputation were in serious trouble, and it needed to take action before things became worse (Horovitz) (Kavoussi). IKEA filed a police report in early March against one of its Swedish suppliers of meat, about one week after the horse meat in its meatballs had been discovered. Familjen Dafgard, the company that produces most of IKEAs meatballs in Europe, had traced the horse meat back to the supplier. In a statement it released on the same day, IKEA apologized for the horse meat issue and reaffirmed that the trust of customers was its top priority. In cooperation with Dafgard,

IKEA redesigned parts of its supply chain in order to improve quality control. By tightening its control over the supply chain, IKEA became confident enough to re-release its meatballs into store cafeterias by the end of March (Tepper). In a press release detailing the return of its famous meatballs, IKEA detailed the new measures it was taking to ensure that horse meat would never again be found in its products. IKEA had cut the number of suppliers was cut from 15 to 7, it would perform DNA testing on both the raw and cooked meat, and it had added new measures to make every piece of meat traceable. "We want to have a traceability standard in place, tracing meat from farm to fork," said IKEA Foods Chief Executive Edward Mohr. IKEA answered a large number of quality control related questions in the press release, and finished by restating that any unhappy customers could return meatballs for a full refund (Ikea Meatballs Return After Horse Meat Scare) (Sales start of newly produced meatballs). In conclusion, IKEAs horse meat scandal shows that even the most trusted and popular companies need to protect brands and reputations. By responding quickly, IKEA guarded its good image with minimal damage to its reputation. However, IKEA could have protected its brand even better by offering more transparency and taking more responsibility instead of shifting the blame onto the meat suppliers.

2. SWOT Strengths: - The Familjen Dafgard meat products are only used in Europe IKEAs. - IKEAs signature meatballs are loved around the world. Weaknesses: -Sales may go down globally. - IKEA uses multiple products 3 the meat company Familjen Dafgard Other ideas for the SWOT: -IKEA didnt sell or purchase the horse meat knowingly -IKEA wouldnt have gained much of anything from selling the horse meat -Other companies (Nestle, Burger King, Tesco) had also purchased horse m Threats: - People will be skeptical of the meat served at IKEAs around the world. - IKEA must find a new meat supplier and keep the loved taste of the signature meatballs.

Opportunities: - Show customers they care about the quality of food IKEA serves. - Certify that its food is safe.

Although some crises are unforeseen, IKEAs horse meat crisis could had been prevented if it had conducted a risk assessment. A risk assessment identifies potential problems and helps to manage issues to prevent crises. IKEA is guilty of not researching its entrusted suppliers of

meat. It should have done research on the company it chose to buy its meat from. Knowing it made a mistake, IKEA should take the opportunity to research all of the companies it carries to ensure its products meet the expectations of its customers. This would ensure customer satisfaction, and conducting a risk assessment would decrease the odds of having a similar crisis. IKEA had a crisis communication plan. Once the horse meat had been detected it used the preemptive action strategy to try and address the problem before other versions of the story were able to emerge. IKEA should had used the offensive response strategy of embarrassment. IKEA wasnt aware that it was serving horse meat and this strategy would have been helpful in lessening the accusers influence. Also, IKEA didnt ensure the meat that it was serving was from an exceptional provider. However, no one was physically harmed by the ingestion of horse meat. In order to justify its actions, IKEA should have responded with a statement telling the world that there was no serious damage or injuries caused by the tampered meat. In order to move past the crisis, IKEA used the diversionary response strategy of disassociation. IKEA stopped selling Familjen Dafgard meat products and didnt start selling its meat balls until it could find an adequate meat provider. IKEA should have shown concern, but not admitted guilt. When IKEA found out about the tampered meat, it stopped selling the product. However, it should have expressed concern towards the crisis and worked to find a solution because it claims to have not known so it shouldnt have felt guilty. 3. What were the organizations options? At times of crisis, any organization, large or small, faces similar struggles. Its main goal is to take steps to ratify whatever issue it is facing while restoring a positive image and reputation. Each organization chooses its own path in accomplishing this, but the options tend to be pulled from crisis management choices that have already been made by others. Generally an

organization can either choose to hide the issue at hand and be very secretive about its dealings, be completely transparent and apologize for its actions, or reroute the blame elsewhere and shift focus. During the horse meat scandal, IKEA had to determine which of these options would be best for them. The following is a description of each option, and how IKEA could have used it in a crisis. The first option, which many believe to be the worst choice, would be to hide the issue and be very secretive. IKEA could have denied any horse meat had been found, and set up a very defensive approach to the matter. By ignoring the problem, there is an off chance that the matter will simply blow over and something else will take its place. You do, however, run the risk of the problem festering and growing worst and worst. This risk has severely increased since social media became prevalent, and it is highly likely that this option would have simply made the issue worse and harder to overcome. The second option, which is commonly believed to be the best form of crisis management in public relations, would be to become completely transparent as an organization. Taking responsibility quickly, genuinely apologizing and taking steps toward ratifying the issue lets the public know that while the organization has made a mistake, it is willing to do all it can to make things right. Sometimes this is even necessary when the issue at hand is not entirely the organizations fault. This would have been the case if IKEA had chosen this option. The truth is that many European companies were being supplied horse meat without knowing. IKEA was simply part of a supply chain and didnt think much of it. By taking full responsibility for the issue, IKEA would have increased the negative publicity upon itself. By explaining the situation, publicly apologizing and taking steps toward correcting the issue, IKEA could have moved past the horse meat scandal a little quicker and helped it blow over.

The third option, which seems to be the path IKEA chose, was to try and reroute attention to its suppliers and place the blame on them. Unfortunately, many people have a hard time seeing such a large company as the victim. Many people tend to believe that big businesses are responsible for most of the problems in the world. Because of this, they dont believe a lot of what big businesses say. While IKEA made the mistake of playing the victim, they did take a lot of positive steps to ratify the issue, including filing a police report and launching an investigation into the root of the problem. While this helped its cause, many still saw right through placing the blame elsewhere and had a difficult time overcoming the negative attitude created at the time of the horse meat scandal. While IKEA had many options as to what it could do in response to this scandal, these are the three that stuck out because of how they apply universally to any organization. 4. What would you have done differently? In an attempt to gain direction as to how this scandal could have been handled differently, research was needed to compare and contrast different management options. This research presented many ideas that will be covered, but the general consensus was that IKEA (as well as the other European manufacturers affected by the crisis) should have done a better job of owning up to the error that had been made and publicly do all it could to correct it. As the senior vice president and chair of crisis litigation of the strategic communications firm Levick, Gene Grabowski has analyzed IKEAs response to the horse meat scandal and believes it made a classic public relations mistake. He insinuates that IKEA made the classic mistake of trying to appear as victims," which is not a good thing when it comes to crisis management. Grabowski believes that there are three players in crises like these: the victim, the villain, and the vindicator. "People don't identify companies as victims because of their size and

resources," he said (Dubois 2013). IKEA did a decent job of being a vindicator of sorts. It stopped sales of horse meat-contaminated beef and issued press releases informing customers of the locations where the meat is known to be fine. These were all positive steps, but while IKEA didnt play the victim card in its entirety, it did portray an image of non-control and tried placing blame on its own supply chains. Playing the victim was not the only mistake that was made by IKEA in response to this scandal. Supplier identity has always been a bit hazy among big companies like IKEA. During a time of crisis, transparency is always the first thing to come into question, and for IKEA, things were no different. Customers immediately demanded to know who the suppliers of the horse meat were, where it was located and why the company was associating itself with such a low quality institution. This is something that can be avoided by every company by being completely willing to provide supplier information. IKEA should have let its customers know where the meat was coming from before the crisis happened. This would have put the customer at ease when questioning the product, and held IKEA accountable while choosing suppliers. Another issue that is still occurring in the scandal revolves around IKEAs online response. While many media outlets were reporting what was happening in the scandal, the main conversation was happening on social media sites such as Facebook, Twitter and blogging sites. IKEA could have very easily researched the online conversation and launched social media campaigns that would combat false rumors and lack of awareness. It also could have used social media as a way to publicly inform its customers as to what was being done to reduce the risk of something like this happening again. Overall, the way IKEA handled this issue wasnt terrible. It made sure to correct the error and let everyone know that even though nothing dangerous was taking place, it wouldnt

stand for what had been done. It did, however, try to make itself out to be the victim when it should have just owned up to what had happened, apologized and very publicly taken steps to fix the issue. It also could have chosen better channels with which to get its message across. These are all things that could have helped IKEA restore, and even increase its positive image. 5. Apply a personal experience. Food poisoning is the worst! It is an awful reaction that results from eating undercooked food or food with bacteria and other germs, and can happen when eating out or even when preparing food in your own home. In my case, I got food poisoning from Mongos Stirfry a new restaurant hot spot in Provo, UT. Although many rave about the foodand I loved it before this experienceI am sad to say I will never eat at Mongos Stirfry again. At Mongos you serve your self a heaping dish of raw, frozen meat. You then allow the cooks to grill the meat until it is done. The meat I consumed was either not properly stored or was frozen incorrectly. That night, I began to feel sick and was up all night with symptoms of food poisoning. Now when I hear anyone say good things about Mongos, Im always sure to warn them about the restaurant based on my food poisoning experience because I dont them to endure food poisoning. Face-to-face communication, in this case, is very effective; most likely my friends will remember my story and chose not to eat there given other options. This face-to-face communication is what IKEA was worried about in its horse meat scandal. Many people trust IKEA and its products. The horse meat in the meat balls contaminated the meat, causing many customers to be disgusted that they could have consumed a non-traditionally slaughtered animal. People began to talk with their friends about this scandal, sharing negative feelings that they had begun associating with IKEA.

In the modern technological world, people can express experiences and post reviews about businesses online instantly. I didnt share my experience online, but upon reading reviews from other customers, I realized that many other people had complained about food poisoning from certain meats. Overall, however, Mongos ratings were still high. IKEA is not a part of a food chain; the food service is meant as a bonus to complete the shopping experience, and it adds to the atmospherics of IKEA. People world-wide were upset at and sceptical of IKEA over the quality of meat served in its cafeterias. To protect its image, IKEA changed its meat providers and quickly restarted serving its signature meatballs. If Mongos even put up a simple sign saying that it passes all health codes and regulations, I would probably return. IKEA admitted that it had made a mistake and its customers were forgiving.

WORKS CITED Dubois, S. (February 26, 2013). How IKEA can get back on the horse after a meat scandal. Retrieved May 30, 2013 from management.fortune.cnn.com/2013/02/26/ikea-horsemeat/. Higgins, Andrew, and Stephen Castle. "Ikea Recalls Its Meatballs After Detection of Horse Meat." New York Times [London] 25 FEB 2013. Web. 3 Jun. 2013. <http://www.nytimes.com/2013/02/26/world/europe/ikea-recalls-its-meatballs-horse-meat-isdetected.html?pagewanted=all>. Horovitz, Bruce. Web. 3 Jun 2013. <http://www.usatoday.com/story/money/business/2013/02/26/horse-meat-scare-ikea-nestleburger-king-tesco/1948885/>. "IKEA Group Yearly Summary FY12." IKEA.com - IKEA. IKEA International Group. Web. 3 Jun 2013. <http://www.ikea.com/ms/en_GB/pdf/yearly_summary/ys_welcome_inside_2012.pdf>. Ikea Meatballs Return After Horse Meat Scare. <http://articles.chicagotribune.com/2013-03-21/business/chi-ikea-meatballs-return-afterhorsemeat-scare-20130321_1_complex-food-industry-horsemeat-familjen-dafgard>. IKEA Withdraws Meatballs From Sale. Web. 3 Jun 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/IKEA_withdraws_meatballs_from_sale>. Kavoussi, Bonnie. Web. 3 Jun 2013. <https://en.wikipedia.org/wiki/The_Huffington_Post>. Sales start of newly produced meatballs. Web. 3 Jun 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/sales_start_meatballs>. Tepper, Rachel. Web. 3 Jun 2013. <http://www.huffingtonpost.com/2013/03/05/ikea-horsemeatmeatballs_n_2811554.html>.