Samsung Galaxy Note 7 Recall - Case Study Example

Samsung Galaxy Note 7 Recall Name Institution Course Tutor Date Note 7 Battery Explosion Incident These days any Smartphone can do just about anything, but exploding or blowing up is not on the top of most end users’ list of anticipated features. When reports about Samsung Note 7s’ battery explosion began to surface, the tech reporters jumped on the tale, which escalated quickly. In about a week after reporting on the Samsung Note 7s’ battery explosion saga, the Federal Administration advised all the passengers never to switch on or even charge their Samsung Note 7 smartphones aboard aircraft or store them in airplane cargo (Mwai and Collins, 2016). The South Korean electronics giant company, made a formal recall process but that was way later after the Samsung Note 7 smartphone had already harmed the consumers in many ways, leading to lawsuits and a public relation nightmare for the company. Thousands of Samsung Note 7 users experienced various cases of battery failure that led to emissions of noxious fumes, explosions and fires (Golson and Jordan, 2016). According Bart and Jansen, (2016), the failures dramatic form classifies them as being thermal runaway in nature. Such letdowns are the consequence of the cessation of the thin passivation SEI layer on the anode, because of overheating or physical penetration. Samsung Recalls 2.5 Million Note 7 Models The time Samsung Note 7 was launched, there were two battery suppliers namely ATL, an independent company and SDI which is a subsidiary owned by Samsung. The South Korean technology giant initially believed that SDI obtained batteries were the cause of the explosion. This report came after the company analyze the SDI batteries. The analysis showed that the plates found inside the SDI battery were too close to each other, near its smooth-edged corners meaning the SDI batteries were vulnerable to short circuit (Bart and Jansen, 2016). Further analysis showed that the SDI sourced batteries also had flaws in its cloistering tape and the covering of its negative electrode (Bart and Jansen, 2016). Therefore, Samsung Corporation initially directed the Samsung Note 7 Users with SDI batteries to swap their handset with Samsung Note 7 smartphones on ATL batteries. Within a few days, reports emerged that also Samsung Note 7 smartphones on ATL batteries began exploding forcing the company to recall over 2.5 million Samsung Note 7 smartphones and reports shows that the tedious recall cost the corporation over $5.3 USD, not including the effect or hit on the Samsung’s long term trademark image, and not to mention the issues that disposal of over 2.5 million non-removable battery phones have on the environment. Samsung Smartphones Banned from Flights After the reports of Samsung Note 7 smartphones battery explosion and causing harm to a number of individuals, most of the airlines especially in the United Emirates banned the use of Samsung smartphones aboard aircraft, this is according to the analysis provided by Golson and Jordan, (2016). A good number of other airlines and aviation authorities especially in the United States such as the US Federation Aviation Administration, issued serious warnings against charging or turning on Samsung Note 7 smartphones inside airplanes. Additionally, the Government of Canada ordered a recall of the Samsung Note 7 smartphone model. The Thailand government decided to ban the import of the Note 7 totally. Samsung later announced the release of a software update that helped reduce the risk Note 7 smartphone catching fire by preventing the maximum battery charge to sixty percent. According to Bart and Jansen, (2016), the incident of Note 7 battery explosion forced companies such as AT&T, T-Mobile, Sprint Corp., and Verizon Communications Inc. to quit selling the Note 7 model and make arrangements on how to waive return or exchange charges for any client who bought the phone. Nevertheless, a number of clients complained about challenges in exchanging the Note 7 model. In barely a month, more than ten billion USD had been expunged from Samsung’s market worth and the corporation was forced to postpone the introduction of the new smartphone in India and other crucial markets. Within the same month, the United States Consumer Product Safety Commission had already received ninety cases of Samsung Note 7 over-heating, including twenty six that had left users with scorches. The commission, after carrying out an examination, concluded that the batteries in Samsung Note 7 model were pinched initiating short circuits and overheating. Around the same time in China, Chinese consumers began accusing the South Korean electronics giant of discerning against China, by failing to recollect the Galaxy Note 7 (Golson and Jordan, 2016). The reason why Samsung did not recall Note 7 model sold in China is because they claimed that the faulty batteries were no in Note 7 smartphones sold in China regardless of three reported cases of explosions of the Samsung Note 7 model. Various stores in China started to get rid of Galaxy Note 7 despite not having official request to take them off the shelves. According to Mwai and Collins, (2016), the Chinese State Newspaper, the People’s Daily, wrote that it was very insincere of the South Korean electronics giant to re-collect only two thousand units in China but over 1 million in the US. Almost immediately after the occurrence of Note 7 battery explosions, several reports emerged that the owners of Samsung’s Galaxy Note 7 predecessors such as the Galaxy S7 Edge, and Galaxy S7 handsets in the US, UK and Philippines had reported incidents of this models emitting smoke and catching fire (Mwai and Collins, 2016). Within the same month, a cabin crew on an IndiGo airplane flying to Chennai from Singapore, reportedly used a fire extinguisher to douse a Galaxy Note 2 phone that was on fire and emitting sparks. In another incident, Southwest Airlines reportedly evacuated a flight in the United States, state of Kentucky, after smoke was seen originating from Samsung smartphone, although the phone model was not confirmed (Dobie and Ales, 2016). South Korean Corporation Discontinues Galaxy Note 7 Production At the beginning of October, 2016, various reports also emerged that the “safe” Note 7 smartphones that had been swapped under the recall were also overheating and catching fire. That was when the Samsung Company announced officially that it was going to permanently discontinue the production of the Galaxy Note 7. According to Golson and Jordan, (2016), as an outcome of the scandal, the company’s’ share price has dropped by 7% and market analyst estimate that the company might lose over $5 billion worth of revenues once the recall is over. The Current State of Samsung The incidents of battery explosions began sometime late last year, just a couple of weeks after the company launched the latest smartphone, the Samsung Galaxy Note 7. Immediately when the incident occurred, Samsung responded swiftly and with thoughtfulness to its leading shareholder – the consumer – promising instant act to scrutinize and comprehend the problem (Mwai and Collins, 2016). Bearing in mind that there were over thirty five testified cases of blowing up handsets within a comparatively short period of time – about 14 days after the sales launch – company’s predicament management team was fast, client centric, rationally well connected, and focused on swiftly partnering with their main associates such as the mobile carriers (Bart and Jansen, 2016). Nevertheless, as additional incidents and issues began to surface in various countries, including the biggest consumer China, Samsung started to take some mistakes such introducing a discriminating recall of its merchandises in specific countries only, and not giving a clear explanation of the foundation for doing so in specific countries. After such an incident, Samsung began to consider the need for adaptable and sustainable crisis management and the need to globalize the crisis management plan. The Corporation considered both short term and long term measures. Short Term Measures 1. Review of the Samsung’s crisis administration plan to make sure that it is comprehensive, robust, capable of being both local and global, and constantly updated 2. The company developed better harmonization of communications, planning, and public relations administration, comprising of social media tracking and teachings for senior administration in each relevant republic. Long Term Measures 1. To handle the battery explosion incident well, Samsung had to consider Shareholder identification, arrangement and anticipation analysis. Samsung underwent a shareholder analysis to comprehend reputation risk and opportunity. 2. Samsung had to engage in an enterprise risk administration assessment, gap examination, and modification that is clearly synchronized with administration, the administrative team, and the board, and surfaces its crucial calculated hazards in an evocative and actionable way. References Dobie, Ales., (2016). "It's official — two days after Samsung canceled the phone, it's been recalled (again) in the United States.". Android Central. Retrieved 13 October 2016 Mwai, Collins., ( 2016). "Rwanda Bans Troublesome Galaxy Note 7 Bart, Jansen., (2016)."Smoking, popping Samsung Galaxy Note 7 prompts Southwest evacuation". USA Today. Golson, Jordan., (2016). "T-Mobile is second US carrier to halt Galaxy Note 7 sales, giving $25 credit to affected customers" Read More