Executive
Summary
Mengiu Diary Group, one of
the top dairy manufacturer and distributor in China, was ranked as the largest
dairy group in China by the market share of 22% in 2004. The company has
successfully built its brand equity in the country by various high profile
advertising campaigns which has led to over USD 3 billion in annual revenue and
has become a symbol of the entrepreneurship in China. However, the tainted milk
scandal in 2008 that has claimed thousands of sickness and lives of children impacted
the organization in both economical and social values as its brand equity and
revenue has dropped significantly. Since the scandal has drawn numerous media
reports around the globe, Mengniu was not only suffering from profit loss but a
severe impact on its corporate and social values and has paved a long way for
the company to face the future challenges in recapturing consumers’ trust and
brand recognition in the midst of the crisis. The report has identified the CSR
and sustainable issues in this case and has also illustrated the different
sustainable forces and stakeholders’ viewpoints. Finally,
the
actions of the various stakeholders are also considered and evaluated with some
recommended actions to conclude the report.
A sustainable enterprise is one that
contributes to sustainable development by delivering simultaneously economic,
social, and environmental benefits—the so-called triple bottom line. (Hart L,
2003). Mengniu management needs to consider those
forces and incorporate them in the corporate level strategy to sustain the
business.
Apparently
the melamine scandal has seriously impacted Mengniu’s
values in economical, ethical and social perspectives as such scandal has
caused thousands of human illness and death which has affected the company’s
reputation and profitability. Mengniu has to face the recovery path to survive
the scandal and ultimately to recapture consumers’ trust by providing high
standard of quality products and re-building its brand recognition. Moreover,
they are required to perform a positive accountability and corporate social
responsibility to the public to deliver a promising and a long lasting
relationship with the customers.
