Starbucks Ethical Crisis

Crisis communication is an area that is fluid in nature. This implies that there is no “one size fits all” solution that can be used by practitioners when dealing with any crisis, simply because crises are all differing in nature and severity for different entities. So what would be the best way to relate to a stakeholder group in times of crisis? It depends. It can depend on a whole buffet of aspects that make up the crisis – ethical implications, what is at stake for the different parties involved, credibility of the stakeholders in question, to name a few (Cancel, Cameron, Sallot, & Mitrook, 1997). In order to answer whether or not a company facing a crisis should focus on its branding or its reputation would require us to analyze and

While branding keeps only the consumers in mind, reputation encompasses every stakeholder that can be impacted by the actions of the organization, which includes the consumers as well (Ettenson & Knowles, 2008). Branding is important to create a visibility in the minds of the consumer. However, if it were not supported by a good reputation, it would undoubtedly lead to negative brand image for the company. Let us take Starbucks as an example. Starbucks brand thrives on 2 key aspects, “sharing great coffee with our friends and helping make the world a little better” (Starbucks, 2017). One of the pillars of the Starbucks brand that give them an edge in their customers’ minds is their fair trade practice. Starbucks brand prides itself as a responsible business, but when the news of their opposition to support trademarking of Ethiopian coffee beans broke out, it resulted in damages to both their brand and reputation. Consumers were furious and about 70,000 of them wrote in their complains about this to the company. The Starbucks consumers felt that the company had breached their trust by going back on their words that are inscribed in their mission, vision and values. In order to defend their reputation, Starbucks had to print and distribute leaflets with their side of the story through their retail stores (The Economist ,

Damage to one will affect the other negatively as well. Therefore, when dealing with the consumers during crisis, companies may opt to focus on leveraging their brand equity , especially if the crisis at hand is directly linked to the branding. In the case of Starbucks, their messaging to their customers might have not only stated their stance on the issue to clarify any doubts and misunderstandings, but to also draw links to their brand values to reinforce their stance to their target audience. However, not all crises are negatively link to the brand in the consumers’ minds. If we take a look at the Johnson & Johnson Tylenol case, despite causing their shares to drop to 0%, Johnson & Johnson still went ahead with their product recall. This move established that the company cared for their consumers’ well being. Thus, when it was proven that the cause of the poisoning was due to external factors, this move helped Johnson & Johnson to regain their reputation and market share rather quickly. This was also due to the fact that Johnson & Johnson applied their guiding corporate principle, “The Credo”, staying true to their corporate values and living up to their reputation (Greyser, 2009). As such, we can conclude that in the case of dealing with the consumers, companies may want to link their brand and reputation to reinforce their key messages to their target