The IPO situation

2019-02-17

IPO Media Crisis

 Tangerine Trails – Media Room

The IPO Situation

Joey’s Homestyle Pasta
Joey's is part of the New World Pasta family of brands,
a leading gourmet stuffed pasta shells manufacturer in
the United States.

It was a Sunday morning, the 18th of February
2001. Many people were enjoying at home,
Joey Corleone was in his office at Joey’s
Homestyle Pasta. Joey’s Homestyle Pasta
was going public in a couple of days, and there
was a lot in his platter to keep him glued to his
office. The telephone rang. When Joey
answered, he was not surprised to hear
Monica Buffett on the other end of the line.
Monica, Joey’s Vice President for
Administration and Operations, spent part of
every week at the Florida plant of Chandler’s
Pasta Company: A company that Joey had
acquired last year and was finding it hard to
integrate it with his organization’s cultural
fabric. In the due diligence period leading up to
the purchase, it had seemed as though a new
problem developed every week. Finally, six
months after acquiring the company, things
seemed to be under control. The initial hiccups
were attributed to the transition in senior
leadership at Chandler’s. All the existing top
executives were replaced by Joey, in order to

bring coherence and synergy with his
company. A fresh perspective was infused by
Joey’s management team, in order to bring
Chandler’s up to Joey’s standards. Monica
began,” I hope you are sitting down.” She went
to tell Joey that Chandler’s Quality Assurance
manager, Phoebe Geller, was in her office, and
“You need to hear what she has to say!” She
put Phoebe on the phone.
Joey listened as Phoebe told him that the
seafood-stuffed pasta shells that Chandler’s
had shipped to its biggest customer, last night,
were tainted with E.coli. “That can’t be true,”
Joey responded. “We have the lab results that
show it’s fine!”
“I know,” replied Phoebe, “but those results
were falsified.” In tears, the quality assurance
manager explained that she had taken the
samples of stuffed pasta that were to be sent
to an independent lab for testing and baked
them to make sure that any bacteria were
killed, then had frozen them and repackaged
them to look like packages just off the
production line.
Monica asked Phoebe to leave the room, and
then continued the call with Joey. She further
went on to say, “Joey, this is not the worst part.
This news has leaked to the local media.” Joey
was stunned. There was a huge pause before
Joey went on to say, “I need to talk to my Media
and PR team. Monica, I’ll call you back later.
Please stay put.” Joey didn’t put the receiver
down, instead, asked his assistant to
immediately send his media team into his
cabin. The wait seemed like eternity. Joey was
anxious and walked to and fro in his cabin,
waiting for the media team to arrive.
Tangerine Trails – Media Room
Ross Greene, Rachel Tribbiani and Gunther
Singh were having coffee at the cafeteria
unaware of the calls that Joey’s assistant was
trying to make on their extension. Their break
was cut short when the assistant barged in to
the cafeteria and shouted out, “Joey wants to
see you guys. Now!”
The moment they entered Joey’s cabin, they
could sense nervousness and trepidation on
Joey’s face. Joey started, “There is a problem.
And we need to fix it!” Joey went on to explain
the situation to his media team, who seemed
aghast. They could understand its gravity, as
the timing couldn’t have been worse. The news
would have grave implications on the grand
IPO which was scheduled on 20th of February.
As they left Joey’s cabin, they could not believe
what they just heard. They knew that the news
would not take much time to reach
Connecticut, where the headquarters of Joey’s
Homestyle Pasta was located. During normal
days, this would not have created such a
problem for them, as they could have asked
the chain of 200 restaurants to heat the food to
158 degrees Fahrenheit to kill the bacteria. But
this was not normal time. They very well knew
that outside media would almost devastate
their chances of a successful IPO on receipt of
such news. As clearly stated by Joey,
postponing the IPO was out of question, as the
reputation of the company is at stake, a
reputation which has taken Joey almost 15
years to build.
The media team (Ross, Rachel and Gunther)
must come up with a plan to contain the
situation and mitigate the consequences of the
situation on the IPO.
 Tangerine Trails – Media Room

What you Put yourself in the shoes of Joey’s media team and come up with a
feasible plan of action to address this issue. Prepare a ppt (max 10 slides)
are expected outlining the steps you would take, the rationale behind them and the
to do! possible impact of these steps on the IPO.