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Keeping it Clean during COVId-19 Outbreak -The Sanitizer Shortage

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case W14C76
March 16, 2020
Aradhna Krishna
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Keeping it Clean During COVID-19: The Sanitizer
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In early 2020, a new coronavirus was spreading across the world. It was first detected in China and
reported to the World Health Organization (WHO) on December 31, 2019 as an unknown pneumonia.1
The virus spread quickly and was soon detected in over a hundred different countries including Korea,
Japan, Italy, Iran, and the United States. WHO named the virus “SARS-CoV-2” and the disease it created
“coronavirus disease 2019”, or COVID-19. The virus spread was declared a public health emergency of
international concern (PHEIC) by the WHO on January 30, 2020.2 There had been five previous PHEIC
declarations since 2009—the 2009 swine flu pandemic, the 2014 polio declaration, the 2014 Ebola outbreak
in Western Africa, the 2015-2016 Zika virus epidemic, and the ongoing Kivu Ebola epidemic.3 Under the
2005 International Health Regulations, countries and states were required to respond promptly to a PHEIC
declared by WHO.4 In the case of coronavirus, the international community requested US $675 million to
help protect states with weaker health systems.5
The Virus Explained
No
Coronaviruses had nothing to do with the corona in the eyes. Instead, they were a large family of
viruses (i.e., bacteria) that commonly existed in people and many different animals such as cats and bats.
But, each animal species (including humans) had its own coronaviruses, which generally did not affect
them. It was when animal coronaviruses spread to people that disease could occur. Other diseases caused
by coronaviruses included MERS and SARS. All three of these viruses originated from bats, and DNA tests of
the virus in different countries indicated similar sequences, suggesting a single source.6
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It was conjectured that the virus broke out in a large animal market in Wuhan, Hubei Province, China,
indicating an animal to person spread, but later the virus spread from person to person. There was also
“community spread” which meant it was unknown how or where someone became exposed to the virus.7
Published by WDI Publishing, a division of the William Davidson Institute (WDI) at the University of Michigan.
© 2020 Aradhna Krishna. This case was written by Aradhna Krishna, Dwight F. Benton Professor of Marketing at the University of
Michigan’s Ross School of Business. The case was prepared exclusively as the basis for class discussion and is not intended to illustrate
either effective or ineffective handling of a situation. It should not be considered criticism or endorsement and should not be used
as a source of primary data.
This document is authorized for educator review use only by ZAFAR HUSAIN, Al Ain University of Science & Technology until May 2020. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
W14C76
Keeping it Clean During COVID-19: The Sanitizer Shortage
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Symptoms, Care, and Prevention
When people became infected with coronavirus, their symptoms ranged from very mild to very severe,
and some people died from the illness. Older patients were more vulnerable.8 One big problem with COVID-19
was that people could be carriers for 14 days and show no symptoms.9 As such, it was more difficult to
contain the disease.
Clearly, healthcare workers caring for patients with COVID-19 were more vulnerable to catching the
infection themselves. The same applied to other people who had close contact with patients (e.g., relatives).
Additionally, travelers returning from affected locations were at increased risk of infection.10
Product Shortage
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To prevent catching coronavirus, nearly all health agencies—including the Centers for Disease Control
(CDC)—suggested washing or sanitizing hands frequently, keeping surfaces clean and disinfected, avoiding
physical contact with others, and wearing a mask if infected or near infected people.11
Due to the rapid threat and spread of coronavirus in the US, hand sanitizers and wipes became nearly
impossible to find. In February 2020, CVS and Walgreens warned consumers that there could be a shortage of
hand sanitizer. A CNN article said, “US drug stores, retailers and suppliers are racing to keep up with surging
interest for cleaning products as fears over coronavirus intensify. Demand for products like hand sanitizers,
face masks and cleaning wipes has spiked, according to CVS, Walgreens and others. CVS warned it may cause
supply shortages…The hand sanitizer business is about 5% of the total business. It is presently growing at
a very high rate…companies are stepping up production to meet demand…”12
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The CNN article then cited Clorox Chief Financial Officer Kevin Jacobsen as saying, “We are taking up
inventory levels [to] be prepared for the potential increase in demand for some of our bleach products,” and
Reckitt Benckiser, the maker of Dettol, and Lysol’s CEO Laxman Narasimhan as stating, “We’re continuing to
make capacity investments to ensure that we don’t run out at the peak for some of these products that we
have that, frankly, consumers demand and we can’t fulfill.”13
No
Bloomberg reported that by March 2020, Target and Kroger started limiting purchases of hand sanitizer
and disinfecting wipes to six items per person (at Target) and five items per person (at Kroger) because of
widespread stockpiling.14
Still, shortages continued as did price gouging. The Wall Street Journal reported that third-party sellers
on Amazon continued to price gouge on items facing shortages so that a 70-count container of Clorox
disinfecting wipes sold for $27.99, roughly five times the typical cost. Additionally, an 8-ounce, two-pack
of Purell hand sanitizer bottles was listed at $49.99, more than six times what major retailers charged.15 The
article also reported that some firms like Purell had taken a very different tack; they were first supplying its
products to more vulnerable customers such as medical establishments.16
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How to Control Product Shortages
There are many options to control product shortages. But, what are they and how do they impact
consumers and disease control?
2
This document is authorized for educator review use only by ZAFAR HUSAIN, Al Ain University of Science & Technology until May 2020. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
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Keeping it Clean During COVID-19: The Sanitizer Shortage
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Endnotes
“Novelcoronavirus (2019-nCoV) Situation Report – 1.” World Health Organization, 21 Jan. 2020. https://www.who.int/docs/
default-source/coronaviruse/situation-reports/20200121-sitrep-1-2019-ncov.pdf?sfvrsn=20a99c10_4. Accessed 12 Mar. 2020.
2
“Statement on the second meeting of the International Health Regulations (2005) Emergency Committee regarding the outbreak
of novel coronavirus.” World Health Organization, 30 Jan. 2020. https://www.who.int/news-room/detail/30-01-2020-statementon-the-second-meeting-of-the-international-health-regulations-(2005)-emergency-committee-regarding-the-outbreak-of-novelcoronavirus-(2019-ncov). Accessed 12 Mar. 2020.
3
Davis, Nicole. “Coronavirus: what other public health emergencies has the WHO declared?” The Guardian, 30 Jan. 2020. https://
www.theguardian.com/global/2020/jan/30/coronavirus-what-other-public-health-emergencies-has-the-who-declared. Accessed
12 Mar. 2020.
4
“International Health Regulations (2005).” World Health Organization. https://www.who.int/ihr/publications/9789241580496/
en/. Accessed 12 Mar. 2020.
5
“US$675 million needed for new coronavirus preparedness and response global plan.” World Health Organization, 5 Feb. 2020.
https://www.who.int/news-room/detail/05-02-2020-us-675-million-needed-for-new-coronavirus-preparedness-and-responseglobal-plan. Accessed 12 Mar. 2020.
6
“Coronavirus Disease 2019 (COVID-19) Situation Summary.” Centers for Disease Control and Prevention, 11 Mar. 2020. https://
www.cdc.gov/coronavirus/2019-nCoV/summary.html. Accessed 12 Mar. 2020.
7
“Coronavirus Disease 2019 (COVID-19) Situation Summary.” Centers for Disease Control and Prevention, 11 Mar. 2020. https://
www.cdc.gov/coronavirus/2019-nCoV/summary.html. Accessed 12 Mar. 2020.
8
“People at Risk for Serious Illness from COVID-19.” Centers for Disease Control and Prevention. https://www.cdc.gov/
coronavirus/2019-ncov/specific-groups/high-risk-complications.html#who-is-higher-risk. Accessed 12 Mar. 2020.
9
“Healthcare Professionals: Frequently Asked Questions and Answers. When is someone infectious?” Centers for Disease Control and
Prevention, 21 Feb. 2020. https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html. Accessed 12 Mar. 2020.
10
“Healthcare Professionals: Frequently Asked Questions and Answers. Who is at risk for COVID-19?” Centers for Disease Control and
Prevention, 21 Feb. 2020. https://www.cdc.gov/coronavirus/2019-ncov/hcp/faq.html. Accessed 12 Mar. 2020.
11
“Steps to Prevent Illness.” Centers for Disease Control and Prevention. https://www.cdc.gov/coronavirus/2019-ncov/about/
prevention.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fabout%2Fprevention-treatment.
html. Accessed 12 Mar. 2020.
12
Meyersohn, Nathaniel. “CVS and Walgreens warn there could be a shortage of hand sanitizer.” CNN, 28 Feb. 2020. https://www.
cnn.com/2020/02/28/business/hand-sanitizers-wipes-cvs-walgreens-coronavirus/index.html. Accessed 12 Mar. 2020.
13
Meyersohn, Nathaniel. “CVS and Walgreens warn there could be a shortage of hand sanitizer.” CNN, 28 Feb. 2020. https://www.
cnn.com/2020/02/28/business/hand-sanitizers-wipes-cvs-walgreens-coronavirus/index.html. Accessed 12 Mar. 2020.
14
Boyle, Matthew. “Target Joins Kroger in Limiting Purchases of Virus-Related Items.” Bloomberg, 9 Mar. 2020. https://www.
bloomberg.com/news/articles/2020-03-09/target-joins-kroger-in-limiting-purchases-of-virus-related-items. Accessed 12 Mar.
2020.
15
Terlep, Sharon. “Amazon Dogged by Price Gouging as Coronavirus Fears Grow.” Wall Street Journal, 5 Mar. 2020. https://www.wsj.
com/articles/amazon-dogged-by-price-gouging-as-coronavirus-fears-grow-11583417920. Accessed 12 Mar. 2020.
16
Terlep, Sharon. “Amazon Dogged by Price Gouging as Coronavirus Fears Grow.” Wall Street Journal, 5 Mar. 2020. https://www.wsj.
com/articles/amazon-dogged-by-price-gouging-as-coronavirus-fears-grow-11583417920. Accessed 12 Mar. 2020.
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This document is authorized for educator review use only by ZAFAR HUSAIN, Al Ain University of Science & Technology until May 2020. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
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Established at the University of Michigan in 1992, the William Davidson Institute
(WDI) is an independent, non-profit research and educational organization focused on
providing private-sector solutions in emerging markets. Through a unique structure
that integrates research, field-based collaborations, education/training, publishing,
and University of Michigan student opportunities, WDI creates long-term value for
academic institutions, partner organizations, and donor agencies active in emerging
markets. WDI also provides a forum for academics, policy makers, business leaders, and
development experts to enhance their understanding of these economies. WDI is one
of the few institutions of higher learning in the United States that is fully dedicated to
understanding, testing, and implementing actionable, private-sector business models
addressing the challenges and opportunities in emerging markets.
This document is authorized for educator review use only by ZAFAR HUSAIN, Al Ain University of Science & Technology until May 2020. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860
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