Haidilao’s Crisis Management: Threats, Opportunities and Corporate Values

Abstract

Sichuan Haidilao Catering Co., Ltd. (Haidilao) is the leading hot-pot company in the Chinese market, and this case depicts how it addressed a kitchen hygiene crisis in late August 2017. Haidilao is famous for the extraordinary customer service that has made it a legend in the catering industry. The company has been the exemplar for a large number of organizations that have followed its approach and learned how to fine-tune customer service. However, the Legal Evening News released a breaking story that deflated the legend and dragged Haidilao down from its pedestal. The news, accompanied by online videos, revealed mice running around in the kitchen of one of its restaurants; dustpans and tableware being washed in the same sink; and spoons for customer use being used to unclog plumbing. This news immediately caught the public’s attention. Within several hours, Haidilao issued an apology letter that explained how it would address the problems. Shortly after the initial statement, Haidilao issued additional announcements to further provide solutions to the problems in detail. These announcements triggered still more severe online discussions about the hygiene issues. Some people thought Haidilao handled the crisis management well, while others argued that the company’s response to the problems was unacceptable. As the situation evolved, netizens’ attitudes toward Haidilao constantly changed. Keywords