THINK – ACT – REACT

Samsung completely stops with their incendiary Galaxy Note 7! This means that worldwide both the sales and production has fully stopped. Shortly after the launch of the Samsung Galaxy Note 7, it was found that the smartphone batteries can suddenly burst into flames. Based on the blog of Éva, I would like to elaborate on the previous blog by introducing additional information about the issue.

Note 7 bursts into flames (Source: Twitter)

The case

In an official statement Samsung stated that they have stopped sales of the Note 7. For customers who already have Galaxy Note7 devices, Samsung will voluntarily replace their current device with a new one. Here, Samsung refers to their “exchange program”.

As mentioned in the blog post of Éva, the President of Samsung Electronics America also released video in which he admits the mistakes of the organization and apologizes to the affected customers. He also points out that the Note 7 with a new battery is safe and that the battery issue is resolved. However, since that statement a new nightmare has arisen for Samsung when they found out some of the replacement devices were blowing up too.

Animation about the Samsung Galaxy Note 7 (Source: Instagram)

Reflection on the case

Is Samsung dealing with a double crisis? This has taken a beating from stakeholders over its trustworthiness, especially with a marquee product that was supposed to rival Apple’s iPhone. According to the New York Times Samsung is now working on a potential second recall of the Note 7, this time focused on the devices that Samsung had shipped to replace the original smartphones. In my opinion this is an example of failing leadership of Samsung in handling the crisis. In contrast to Éva, I do not agree that Samsung is on the right track in trying to diminish the damage already caused to their corporate reputation. In fact, I believe they may have made it even worse.

I wonder why Samsung did not pull the devices off the market completely and take time to fix the problem. At least Samsung would have had the chance to provide the ‘standard excellence’ they claim to represent. Instead, Samsung rushed to replace the defective devices for new devices that were supposedly safe, but eventually also blew up spontaneously.

I agree with Éva that Samsung responded quiet fast after the first reported incident, but I think Samsung could have prevented worse reputation damage if they would have handled the issue more strategically in relation to their response strategy, rather than sending confusing messages and handling hastily. As Eva described, Samsung used the apology strategy (Coombs, 2007) in order to try to rebuild their reputation. However, Éva did not mention that Samsung at first was in denial of their own mistakes as they stated that the problem of the overheating battery of the smartphone was caused by other (external) factors. This is what Coombs (2007) calls the ‘scapegoat’ strategy.

What could Samsung have done better? 

Lets start with the fact that Samsung should have been more open and honest about the problem. That goes by saying that Samsung should have called this ‘issue’ by its proper name, by calling it a “product recall” in stead of an “exchange program”. With clear messages Samsung could have prevent confusion at the media and public, and they would have created more frame-alignment in the different messages.    

Secondly, Samsung should have taken time to investigate the source of the problem first, in order to be able to release a new and safe smartphone. Customers who were willing to forgive Samsung at first, have lost their trust in the company when also the new smartphones began to blow up. Samsung is currently still investigating the problem.

To gain competitive advantage Samsung must fulfill its core values "provide quality" instead of focusing on competing with Apple. Samsung has not fulfilled its expectations and a failure in expectations is problematic for organizations. Instead, now they are faced with clients that are considering turning to their competitors in response to this double crisis. I hope this is a lessons learned for Samsung.

Author

Daisy de Jong, currently studying the Master track Corporate Communication at the University of Amsterdam.