From Charlie Sheen’s recent, eccentric behavior to Lindsay Lohan’s run-ins with the law to Tiger Woods’ reputation damage, insuring the rich and famous (and sometimes out of control) has never been easy. PropertyCasualty360.com takes us on a wild ride to look at specific insurance issues that affect those with a lot of money and, sometimes, a lot of risky behavior.
Here I am again, writing about Toyota’s troubles.
Today, the car company announced another massive global recall of close to 1.7 million cars due to fuel leak problems. The car models in question affecting the U.S. are the Lexus IS and GS sedans. And though Toyota says it has received no reports of accidents or deaths due to the malfunction, it has had numerous complaints from North American, European and Japanese customers.
It’s been a horrible two years for the world’s largest car manufacturer. Last February I wrote about the Prius recall and the numerous questions that followed regarding buy tamiflu online www.scottsdaleweightloss.com/wp-content/uploads/2023/10/jpg/tamiflu.html no prescription pharmacy
Think that’s bad? Toyota also demands that their employees never walk around the office with their hands in their pockets.” target=”_blank” rel=”noopener noreferrer”>the company’s totalitarian business environment.
The “Toyota Way” is the company’s long-standing philosophy that, among other things, places an extreme emphasis on maximizing efficiency by minimizing waste. Some have even said it acts almost like a religion amongst Toyota’s 316,000 employees. There is even a Toyota-approved way of turning corners when walking around the company’s numerous hallways (you must do say at a 90 degree angle). Think that’s bad? Toyota also demands that their employees never walk around the office with their hands in their pockets.
Now if only they could be that vigilant and careful with their car manufacturing process. Does Toyota value waste-cutting and efficiency more than product quality and customer safety?
It’s a question that has been asked more than once.
In the last two years, we have seen big hits to the brands of Toyota, BP and basically every bank in existence. Reputation risk has been an increasingly large concern reported by top execs on surveys since around 2005, but aside from improving crisis response and, maybe, buying insurance to recoup some losses, there are not a ton of clear-cut ways to manage such a nuanced, nontraditional exposure. (This article from our Risk Management magazine, “The Importance of Reputation,” offers some additional advice.)
We can now add one more company to the list: Johnson & Johnson. A recent New York Times article details at how the formerly Teflon brand on Johnson & Johnson has been struggling since its massive recalls.
Little red flags jut out from the shelves at a CVS drugstore in suburban Boston, alerting shoppers to shortages of nearly a dozen Johnson & Johnson products. Among them are Motrin, Rolaids, children’s Tylenol liquid and adult Tylenol, Mylanta, Pepcid AC and even some Neutrogena skin care products.
“Looking for Tylenol pain relief products?” asks one of the signs. The notices at CVS serve as a stark reproof to Johnson & Johnson, whose brands have for more than a century been synonymous with quality.
In the drug business, Johnson & Johnson will not just face lower sales. Their products will now have to compete with the similarly effective generic alternatives that are usually cheaper. The Johnson & Johnson brand used to demand a premium because people trusted it to be safer than store brands. The importance of that trust — particularly trust from parents — to the company is hard to overstate.
What will happen if it becomes frayed?
While the drugstore signs that helpfully suggest “Try CVS/pharmacy brand” are intended to assist frustrated shoppers in identifying alternatives to missing brand-name products, they also serve as constant reminders of another of J.& J.’s continuing problems: It must persuade millions of disappointed customers to once again pay a premium for products that may no longer seem to be of any higher quality than the less expensive store brand.
“I don’t even consider buying them any more,” says Thien-Kim Lam, a mother of two and a blogger in Silver Spring, Md.
Anyone have any suggestions for Johnson & Johnson?
We talk a lot about reputation risk around this parts. A tarnished brand has increasingly been identified as a leading threat and as BP and Toyota have seen, it can have long-lasting drawbacks to the company.
At this point, most have come to realize the importance of reputation and brand recognition. So while this isn’t really about risk management or protecting the brand, I thought this Freakonomics post about how pharmaceuticals strategically create brand names for their drugs that include the letters X and Z would interest you.
“Reflecting their infrequent occurrence in English words, x and z count for 8 and 10 points in Scrabble, the highest values (along with j and q) in the game. So names that contain them are likely to seem special and be memorable. ‘If you meet them in running text, they stand out,’ is the way one industry insider explained.” The trend, however, is relatively recent, which Stepney attributes to a couple factors. “I suggest that this phenomenon arose because of the fast rate at which new products were being introduced, the fact that the difference between many “me too” drugs was more apparent than real, the immense rewards that were seen to accrue from innovative marketing, and the fact that the ploys available for use in the naming of drugs are so restricted.”
You think this would work for insurance?