The paper 'Communication Crisis ' is a great example of a Business Case Study. Five years ago, Toyota was faced with a product recall crisis that required them to recall millions of cars. Some of their cars were found to have unintentional acceleration problems. However, the problem was not serious but the media blew it out of proportion and fueled the notion that all Toyota automobiles are unsafe. Unfortunately, Toyota’ s crisis communication strategy failed to assure the public about the safety of the automobiles manufactured by the Japanese carmaker. This essay presents the Toyota product recall crisis of 2009-2010 and describes how the firm’ s crisis communication strategy failed.
The essay starts by describing the communication crisis and its scope. It then proceeds to describe Toyota's communication during the crisis with a particular focus on its successes and failures. Finally, it uses crisis communication theories to recommend a communication approach that would have enabled Toyota to maintain its positive brand image and avoid costly lawsuits that followed the recall. The recall crisis In 2009-2010, Toyota was forced to recall 4.2 million vehicles owing to an acceleration defect.
The Toyota vehicles had an unintentional acceleration problem that put the lives of users at risk (Associated Press, 2010). The defect was found on many Toyota models including its top-selling brands like the RAV4, Camry, and Corolla cars. Toyota was praised for making the recall before any major accidents arose as a consequence of the defects. Thomaselli (2010) notes that Toyota made the recall even before fatalities and injuries were recorded. Toyota’ s reaction is appropriate as the University of Canberra (n. d) advises a proactive approach in managing product crisis.
However, Toyota also had to deal with an aggressive attempt by its rivals to steal its customers. General Motors immediately started a campaign targeting Toyota lessees and potential buyers. It was therefore imperative for Toyota to communicate effectively to ensure they retained their reputation and customers (Seeger, 2002). The product recall crisis is a serious setback and causes huge losses to the corporation. However, the biggest loss for marketers is the poor image that is associated with the company (Associated Press, 2010). The recall starting in late 2009 was a great setback to Toyota who had been trying to restore its reputation for quality.
Positive feeling towards Toyota automobile dropped 59%; a 19 points drop, while negative consumer feeling rose to 41%; another 19 point rise (Thomaselli, 2010). Toyota had come under scrutiny when it emerged that it had known about flaws in its ignition system since 2001 (Thomaselli, 2010). Toyota’ s loss of reputation was shown by how an analyst at the Advanced Research Cente in Tokyo reacted (Bowen and Zheng, 2015). The analyst said that it was time that Toyota reviewed its production system to catch the defects that had led to the product crisis (Kalb, 2012).
On the other hand, financial losses for Toyota run to millions of dollars with some estimates putting it as $589 million (Thomaselli, 2010). As a result of the crisis, the value of the Toyota share in Tokyo slid 3.1 percent while a slide in share prices was also noted in New York (Bowen and Zheng, 2015).
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