CASE ANALYSIS

The following case is excerpted from the article below. Instructions follow the case.

The Tragic Side of Tide Pods

The colorful laundry packets have become one of P&G's biggest blockbusters. There's only

one problemtoo many kids are getting poisoned by them.

Fortune Magazine

By

Jake Meth

February 19, 2019

T

ide Pods are arguably

one of the most successful innovations in the storied, 181-

year history of consumer goods leviathan

Procter & Gamble. They're also the top-selling

brand in a household-product category that became ubiquitous practically overnight.

Eight years ago, liquid-detergent packets were barely a presence in U.S. stores; by 2018

they accounted for nearly one-fifth of the laundry detergent market and $1.5 billion in

sales. And P&G, the maker of Tide Pods and another popular brand, Gain Flings,

controls 79% of that business.

But the design factors that have made laundry pods so successfultheir compactness,

easy accessibility, and aesthetically pleasing lookare also potentially fatal flaws. Too

often, it appears, young children and seniors with dementia mistake them for candy and

try to eat them. And when that happens, they're more likely than other detergents and

other household cleaning products to cause serious injury.

Laundry pods' threat to public safety became apparent immediately after their North

America launch in 2012. Between 2011 and 2013, the number of annual emergency-

department visits for all laundry detergent-related injuries for young children more than

tripled, from 2,862 to 9,004.

The majority of injuries resolve within 24 hours without long-lasting effects. Still, pods

make up 80% of all major injuries related to laundry detergent, according to the

American Association for Poison Control Centers (AAPCC), despite accounting for only

16% of the market. In rare cases, long-term complications can ensue. And nine people

have died in the U.S.two children younger than age 2 and seven seniors with

dementiain cases definitively linked to laundry pods.

To the extent that most consumers are aware of these dangers, it's thanks to an asinine

Internet trend. In late 2017 a handful of teenagers started posting videos online of

themselves eating laundry packets in a surreal viral phenomenon known as the Tide Pod

Challenge. That cultural episode cast laundry-pod poisoning as a self-inflicted wound,

harming only the irresponsible. But the Challenge has accounted for only a tiny fraction

of the injuries caused by this now pervasive product.

P&G and other detergent makers, startled by soaring numbers and prodded by

regulators, have taken the product back to the drawing board more than once. But

despite multiple changes to the pods' design and exterior packaging, intensive

industrywide meetings on the issue, and seven years of brainstorming and testing, the

situation has not substantially improved when measured by the total number of calls to

poison-control centers and emergency-department visits.

Pods have prompted an average of 11,568 poison-control calls a year involving young

children since 2013, their first full year on the U.S. market. (The majority of calls, or

exposures, involving pods are not associated with serious injuries, but they're the best

population-wide data available to measure pods' impact on public health.)

And when injuries are inflicted, they remain disproportionately severe: In 2017, the

most recent year for which figures are available, 35% of pod exposure cases among the

whole population wound up being treated in health care facilities; for all other laundry

detergents and for household cleaning substances, that figure was 16% when pods were

excluded.

Consumer advocates and public health experts argue that, for all its well-intentioned

efforts, the industry has refused to confront the brightly colored elephant in the room:

the swirly, multi-hue design schemes that make the mini-packets look so much like

candy. If manufacturers can bring themselves to make all pods look neutral and less

inviting, says Gary Smith, director of the Center for Injury Research and Policy

at

Nationwide Children's Hospital, "we can design this problem out of existence."

P&G and other detergent makers point to different injury measures, arguing that they've

brought down the market-adjusted rate of exposures even without such changes, by

improving the childproofing of packaging and educating the public on proper safety

habits. "Our job is to prevent children from having access to the product completely,"

says Damon Jones, P&G's vice president for global communications and advocacy.

While they haven't ruled out future changes, industry and regulators have announced no

plans for a more aggressive safety intervention. But in an era in which many consumer-

facing businesses have tremendous leeway to regulate themselves, the Tide Pod

dilemma raises urgent and disturbing questions. Has P&G truly reached the limit as to

how safe it can make its popular product? With no legal requirements to make pods

safer, do ethics require the industry to go further? Can an "improved" product that still

causes thousands of hospital visits a year be considered safe? And at what point does the

manufacturer's responsibility for accidents end and the consumer's begin?

That these questions need to be asked testifies to a fundamental truth of America's

consumer product ecosystem: It's largely up to companies to determine how to respond

to a consumer hazard. While government agencies occasionally step in, safety decisions

usually come down to business leaders balancing the success of a product against

reputational and legal concerns. At least for now, P&G has made its determination: The

Tide Pod is safe.

Instructions:

Assume that at this point P&G has two options - they could either do nothing

(their current stance) or they could reformulate Tide Pods to assure that they are as safe as other

laundry detergent products. Also assume that neither option would break the law, and that

reformulation will mean both expense and loss of market share for P&G.

Please answer the following questions:

1. Which option would a utilitarian say that P&G should pick?

2. Which option would a profit maximizer say that P&G should pick?

3. Which option would a universalist say that P&G should pick?

4. Which option would you chose and why (it does not have to be 1, 2, or 3)?

Please divide your response into three sections corresponding to the three questions above.

Grading:

Utilitarianism analysis, including stakeholder analysis: 10 points max.

Profit Maximization analysis: 10 points max.

Universalism analysis: 10 points max.

Your analysis:10 points max.