Head2Head Incorporation, a public listed company, operates in virtually all countries and earn revenue and incur costs in multiple currencies. The Group develops, manufactures and markets medical devices, pharmaceuticals, and consumer packaged goods. The growth of The Group been achieved by investment and acquisition. It is organised into three global business units which manage their sales in international markets, and take full responsibility for strategy and business performance. Only 15% of the business is in the country of incorporation. Competition in the sector is quite fierce. The industry is highly regulated in terms of medical and environmental laws and regulations. Head2Head Incorporation engages in in the research and development, manufacture and sale of a broad range of products in the health care field. The development of new and innovative products, as well as protecting the underlying intellectual property of The Group’s product portfolio, is important to The Group’s success in all areas of its business. The competitive environment requires substantial investments in continuing research. In addition, the development and maintenance of customer demand for The Group’s consumer products involves significant expenditures for advertising and promotion. The Group lodges its patents for products and enters into legal proceedings where necessary to protect patents. Obsolete products are disposed of with concern for the environment and the health of its customers, with reusable materials normally being used. The Group competes across a wide range of geographic and product markets and encourages its subsidiaries to enhance local communities by reinvestment of profits into local educational projects. The Group’s share of revenue in a market sector is often determined by Highly Regulated Industry with Medical & Environmental Laws & Regulations government policy. The markets contain a number of different competitors including specialised and large international corporations. The Group has developed a set of corporate and social responsibility principles during the period which is the responsibility of the Board of Directors. The Managing Director manages the risks arising from corporate and social responsibility issues. The Group wishes to retain and attract employees and follows policies which ensure equal opportunity for all. Employees are informed of management policies and regularly receive in-house training. The Group enters into contracts for fixed rate currency swap and uses floating to fixed rate interest rate swaps. The cash flow effects of t ese swap match the cash flows on the underlying financial instruments. All financial instruments are accounted for as cash flow hedges. A significant amount of trading activity is denominated in the Dinar, Euro, Pound Sterling, Yen and Renminbi. The Dollar is its functional currency.

Crisis – Testing Time!
Tānini was the the most successful over-the-counter product in the America with over one hundred million users. Tānini was responsible for 19 percent of Head2Head Incorporation corporate profits during the first 3 quarters of 2019. Tānini accounted for 13 percent of Head2Head Incorporation ’s year-to-year sales growth and 33 percent of the company's year-to-year profit growth. Tānini was the absolute leader in the painkiller field accounting for a 37 percent market share, outselling the next four leading painkillers combined, been a corporate entity unto itself, profits would have placed it in the top half of the Fortune 500 companies. During the Autumn of 2019, for reasons not known, a malevolent person or persons, presumably unknown, replaced Tānini Extra- Strength capsules with cyanide-laced capsules, resealed the packages, and deposited them on the shelves of at least a half-dozen or so pharmacies, and food stores in the Chicago area. The poison capsules were purchased, and seven unsuspecting people died a horrible death. Head2Head Incorporation, is the parent company of Aspen
Consumer Products Company which makes Tānini, suddenly, and with no warning, had to explain to the world why its trusted product was suddenly killing people.
Andrew William, assistant director for public relations Head2Head Incorporation recalls how the company reacted in the first days of the crisis: "We got a call from a Chicago news reporter. He told us that the medical examiner there had just given a press conference-people were dying from poisoned Tānini. He wanted our comment. As it was the first knowledge we had here in this department, we told him we knew nothing about it. In that first call we learned more from the reporter than he did from us." Andrew's dilemma points out something that has become more prevalent with the expansion of 24hour electronic media. The media will often be the first on the scene, thus have information about the crisis before the organization does. 

Media Frenzy
The initial media reports focused on the deaths of American citizens from a trusted consumer product. In the beginning the producttampering was not known, thus the media made a very negative association with the brand name. All 3 networks lead with the Tānini story on the first day of the crisis. CNN News put a human face on the story which contained the following: "When 12 year-old Mary Posch of Elk Grove Village, Ill., awoke at dawn with cold symptoms; her parents gave her one Extra-Strength Tānini and sent her back to bed. Little did they know, they would wake up at 7:00 a.m. to find their daughter dying on the bathroom floor." The print and online media weighed in with equally damaging headlines: Time Magazine, "Poison Madness in the Midwest," Newsweek, "The Tānini I Scare,"
The Washington Post, " Tānini, Killer or Cure." The media was not only focused on the deaths but it was also pervasive. Throughout the crisis over 100,000 separate news stories ran in U.S. newspapers, and hundreds of hours of national and local television coverage. A post crisis study by Head2Head Incorporation
said that over 90 percent of the American population had heard of the Chicago deaths due to cyanide-laced Tānini within the first week of the crisis. Two news clipping services found over 125,000 news clippings on the Tānini story. One of the services claimed that this story had been given the widest US news coverage since the assassination of President John F. Kennedy. Media reporting would continue to focus on Tānini killing people until more information about what caused the deaths was made available. In most crises media will focus on the sensational aspects of the crisis, and then follow with the cause as they learn more about what happened.

QUESTION: Draft a report suitable for inclusion in a Management Commentary (Management Discussion and Analysis of Results of Operations and Financial Condition) for Head2Head Incorporation which deals with the key risks and relationships of the business.

Answer rating: 100% (QA)

Abstract Head2Head Corporation a public listed company operates worldwide The company is in medical field which used to manufacture and markets medica... View the full answer