EXECUTIVE SUMMARY

Samsung is a multinational company, headquartered in South Korea, which

specializes in providing a wide range of consumer electronics and IT solutions such as

digital appliances and media, memory, semiconductors and system integration. One of the

most successful product lines that help Samsung earn annual remarkable revenues is

Samsung Galaxy Note lineup including series of super−powerful smartphones. This line is

firstly oriented towards pen computing or phablets with a large screen to bestride the

functionality of a traditional tablet with a phone. Software features like note−taking,

split−screen multitasking and digital scrapbooking apps are included in the phones with

using the stylus pen designed to be used in any smartphones. The newest member of

Galaxy big family is Galaxy Note 8, unpacked on August, 23, 2017, with largest screen

than ever before. Despite the scandal of Note 7 last year as well as the competitiveness

from iphone X from Apple. Inc, Note 8 seems to be more welcomed by customers.

Last year, Samsung experienced a nightmare of Note 7 scandals, which started with

the first explosion was announced in Korea in August and over 90 reports of smartphones

overheating in the U.S. One month later, three more explosions were informed, one on

plane, which caused damages for property and injuries as well. On October, 11th, Samsung

official issued death sentence to Note 7 phones. In one hand, customers suffered lots from

loss and injuries and concern from this scandal, yet some complained about inadequate

compensation for damages of houses, items, health and psychology arising from

unexpected battery explosion that made them upset. In the other hand, imagine and

revenue of Samsung also were affected badly. The electronics giant posted in its newsroom

that it lots about $3.1 billion on the Note 7 recall over six months.

Other than profit, what Samsung always pays more attention to is its imagine and

customers’ loyalty, therefore, right after the scandals, Tim Baxter, CEO of Samsung
Electronics North America sent an apology letter to customers to take responsibility for

damages, and to inform the solutions for the problem as well. In his letter, CEO firstly

gave the explanation for the explosion, and, in favor of the company, offered sincerely

apology for not delivering the Note 7 that customers expected and deserve. Moreover,

Samsung recalled customers to return Note 7 immediately to get a full refund and promised

for a safer, more customers−friendly version in near future for which customers who

owned Note 7 will be on list of priorities to exchange if is released. What is more,

Samsung was willing to contribute its 5% of revenue from Note 7 to charity fund for

Alzheimer patients and ensured to public disclosure every 6 months.

In conclusion, how Samsung managed to solve problems is partly effective on

calming the customers and public and on retaking its imagine as a responsible company.

Luckily, there was no reported of serious injuries and in fact, the biggest victim in this case

is Korean electronics giant itself and Samsung took actions and somehow effectively.

Beyond some solutions adapted by Samsung, I would like to give the company some

suggestions, with a view to improving its products and services. Firstly, Samsung should

spend more time researching carefully for safe technology to provide customer with

high−quality product, instead of racing to beat other competitors like Apple and forgetting

necessary stage of testing. Secondly, Samsung had better communicate openly and

transparently since many people criticized its communications for being guarded and slow

and for Samsung’s tendency towards undue secrecy and aloofness. For instance, when

issuing the first Note 7 recall in the U.S.A, Samsung ignored compulsory coordination with

the Consumer product safety Commission there.

References:
 C, Sea-jin (2016). 7 lessons from Samsung’s galaxy note 7 crisis. Retrieved

November 23th from scmp.com http://www.scmp.com/week-

asia/business/article/2029495/seven-lessons-samsungs-galaxy-note-7-crisis

 (2016). Samsung Electronics Estimates Mid-3 Trillion Won Negative Impact for

Q4 2016 and Q1 2017 Due to Galaxy Note7 Discontinuation. Retrieved November

22th from news.samsung.com https://news.samsung.com/global/samsung-

electronics-estimates-mid-3-trillion-won-negative-impact-for-q4-2016-and-q1-

2017-due-to-galaxy-note7-

discontinuation?_e_pi_=7%2CPAGE_ID10%2C3135892343