Business Policy

MBA-II

Beech-Nut Nutrition Corporation

Hamza Rizwan
(12P01318)
SEC C








Core problem:
The core problem being faced by the beech-nut nutrition is the food adulteration in beech
nut juices because of the supplies provided by the supplier which put the company image at
stake. The juices from suppliers were ordered through broker from universal company and were
found being adulterated and not in a pure form. This can lead to serious issues for company as
food agencies can take action against beech nut for selling adulterated juice in the market. This
issue was of concern for the food agencies like FDA and they were in a position to publicize
Beech-Nut as a companys selling adulterated products in a highly competitive market.
Other problems:
The company was not financially strong and it had negative net profits which were making
difficult for company to have new suppliers or upgrade their old machinery.
Not profitable and cash flow issues
Company was facing strong competition from Heinz and Gerber who were spending many
on their marketing to attract customers and increase their market share.
Company was facing difficulty in finding new suppliers due to their financial issues.
Processed Apple Institute retained detectives to keep several companies under surveillance
which included, Universal Juice Company, Beech-Nut supplier.
No method to keep a check on supplies arriving from the Broker.


Alternative Decisions:
Decisions 1:
The company must file case against the universal juice company and claim loss from the
universal juice of adulteration of it products. In order to file a law suit against it supplier, Beech-
Nut needs to collect information from quality assurance department and should collect proof
against its supplier. This option will also lead to bad publicity for the company.

Decision 2:
To maintain their competitive position they must try to forgo this issue because if this
information gets out it will make their image in the public negative of providing unhealthy
products in the market and return all these products back to the supplier and ask for replacement
in form of pure products.
Decision 3:
They must revise the agreement with the universal company and without going in to the courts
find new suppliers.
I will recommend Beech-Nut should go with the number 1 option by collecting evidence agent
the universal company and take them to court and claim for the losses and in the meanwhile look
for new suppliers which will provide them with best products for the market.