Juul Labs: Guilty by Association?

Abstract

The protagonist, the CEO of Juul Labs (Juul), an e-cigarette company founded to help smokers quit cigarettes, is trying to negotiate a merger with Philip Morris International (PMI), the behemoth tobacco company, in the face of bad press about e-cigarettes and Juul in particular. If Juul and PMI merge, Juul would have access to PMI's wide distribution network, a necessity for expanding into international developed markets. Although intended for adults, Juul had become popular with teens, especially middle and high schoolers, causing a spike in youth nicotine addiction. As a result, Juul and other e-cigarette brands faced heavy scrutiny and legislative regulation from government agencies. Juul had modified its marketing strategy and complied with government orders in an attempt to reduce the accessibility and popularity of Juuls to minors, but still faced public and governmental criticism that threatened to jettison the merger. As an ex-smoker, the protagonist strongly supports e-cigarettes as a means to end cigarette use, and thus believes in Juul's purpose. Yet there is no denying that e-cigarette use (particularly the use of flavored e-cigarettes) has led many teens to vape. Because of the attacks from legislators and the media, however, PMI had reservations about doing business with Juul. But despite its efforts to address the problem including support of raising the legal nicotine use age from 18 to 21the protagonist wonders if the company had done enough. What other changes could be enacted at Juul? Did taking part in the battle against teen nicotine addiction make up for the fact that Juul practically initiated this particular nicotine epidemic? What other efforts could could prove Juul's intention to help adult cigarette smokers and to redeem Juul's reputation in the eyes of both the public and the government? Finally, was there any way to salvage Juul's pending merger with PMI? Excerpt UVA-E-0471 Feb. 11, 2021 Juul Labs: Guilty by Association? You and your assistant, Ken Bishop, were leaving the room after a long meeting with executives of Philip Morris International (PMI). Hours of negotiating had led nowhere: you and your legal representatives were unable to reach an agreement with PMI, putting the potential merger between PMI and Juul Labs (Juul), your company, on hold for the time being. The recent slew of bad press made the executives at PMI hesitant about associating with Juul. As CEO of Juul, you had been facing increasing pressure and criticism from the media, advocacy groups, the government, and society in general about your company and product. Juul was a San Francisco based e-cigarette company founded to help smokers quit smoking cigarettes. Despite being a product for smoking adults, Juuls had recently became a sensation among nonsmoking teens, especially middle and high schoolers, causing a spike in youth nicotine addiction. Juul and other e-cigarette brands were being heavily researched by government agencies, regulated by legislation, and banned from schools. . . .