Applying Crisis Management Concepts to Samsung Galaxy Note 7 Crisis

Running head: CRISIS MANAGEMENT
Applying Crisis, Crisis Management Concepts, and Framework to the Samsung
Galaxy Note 7 Crisis
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1CRISIS MANAGEMENT
Executive summary
The main purpose of this study is to identify the importance of crisis and crisis management.
The purpose is being served in this report with an example from Samsung’s Galaxy Note 7
explosion cases. It is being shown in this study that Samsung had failed to appropriately
manage the crisis. As a result, the study finds that the flagship model Galaxy Note 7 stayed in
the market for just two months. It is mainly due to the inappropriate crisis management policy
at Samsung.

2CRISIS MANAGEMENT
Table of Contents
1. Case background....................................................................................................................3
2. Importance and role of crisis and crisis management in international business firms...........3
2.1 Crisis and crisis management...........................................................................................3
2.1.1 Characteristics...........................................................................................................4
2.1.2 Importance of risk management................................................................................6
3. A descriptive comparison of 2 of the 4 Crisis Management Cycles learned in Week 6........7
4. Application of Crisis Management Framework on Samsung Galaxy Note 7 Crisis..............9
5. Using Crisis Management Framework to sequentially analyze the following:...................11
(A) The pre-crisis background context................................................................................11
(B) The crisis point (or risk event).......................................................................................12
(C) The crisis response and management.............................................................................13
(D)The potential or future impacts and other impacts and complications and general
lessons learned 13
Recommendation......................................................................................................................14
Conclusion................................................................................................................................14
References................................................................................................................................16

3CRISIS MANAGEMENT
1. Case background
The highly anticipated Samsung’s Galaxy Note 7 was expected to produce many
accolades for the company. The purposes had looked promising as well with power packed
features inbuilt in the 5.7-inch phone. However, all that expectations started to vanish when
one of the Note 7 phones caught fire while during plugged in for the charge. The fire catching
case is not the first of its kinds and has already had happened before. In past, laptops from
Sony went through similar stages. Lithium batteries commonly being used in phones, laptops,
and other electronic devices are believed to be prone to catching the fire (Australian Popular
Science, 2018). The phone that started so well with lots of wave reviews from different media
resources such as Wired, Time, The Verge and others ended with strong criticisms from
across the globe. Circumstances got worsened with Apple successfully launching its flagship
iPhone 7 and Google releasing its official Android phone. Samsung was expectedly slow in
responding to this crisis. Samsung finally decided to delay the shipment of fresh Galaxy Note
7 phones. It was followed by recalling the already sold devices from various parts of the
world. In addition to these steps, Samsung offered an exchange offer for those who have
purchased Note 7 phones. The offer was whether going for fresh Note 7 phones or for any of
its two flagship phones Galaxy S7 or S7 edge phones. The replacement of Galaxy Note 7 did
not either perform well as the Southwest Airlines Flight 994 had to evacuate in response to
the replaced Galaxy Note 7 that went up in smoke (Australian Popular Science, 2018).
2. Importance and role of crisis and crisis management in international business firms
2.1 Crisis and crisis management
On a broader note, a crisis is a state which threatens to harm one's reputation (Booth,
2015). From the business perspective, a crisis can be defined as a potential threat that stems
from either internal or external influences. These potential threats arise when crisis become