Samsung Galaxy Note 7 Scandal Analysis

Running head : SAMSUNG GALAXY NOTE 7 SCANDAL
Samsung Galaxy Note 7 Scandal
Name of the student :
Name of the university :
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Executive Summary
The paper speaks about the Samsung Galaxy Note 7 scandal which occurred in the year 2016.
The battery pf the phone busted several times, leading to the phones being recalled by the brand
and banning of the particular phone in several countries. The incident brought immense harm to
the reputation of the brand and deceased its brand value. The Company was not able to handle
the crisis as swiftly it could have, and there were many loopholes in handing the crisis the most
important one is that it was not able to address the stakeholders properly and there was no
uniform strategy on the part of the brand.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
About the scandal........................................................................................................................3
Content Analysis..........................................................................................................................5
Timeline of the scandal................................................................................................................7
Impact of the scandal...................................................................................................................9
Critical Review of the scandal...................................................................................................10
Conclusion.....................................................................................................................................12
Recommendation...........................................................................................................................13
References......................................................................................................................................15

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Introduction
According to the researchers, public relations can be referred to as the maintain
relationship with the internal and external publics. To elaborate the definition further, the authors
have said that it can be said as the management function which establishes as well as maintain
the mutual relationship that exists in the middle of the organization and the public and for whom
the achievement and the failure are depended on (Ferguson, 2018). Crisis management is one of
the purposes of public relations, which is used by the Company to reduce the impact when a
company is faced with an unexpected issue (Grunig 2017). Samsung group faced one such issue
in the year 2016. The Company is known to be one of the most influential brands in the world
who have expanded an immense amount of success in the business of the mobile phones;
however with the Galaxy Note 7 battery explosion crisis. The paper focuses on this scandal and
will review the case of the Samsung Galaxy Note 7 Battery explosion and the crisis and will
deliberate the circumstances and the crisis. The paper will perform a content analysis on the issue
and discuss the time frame of the scandal and its impact on several sectors. The paper in the later
section of the paper will critically review the entire scandal and how Samsung dealt with it and
will end with a certain recommendation.
Discussion
About the scandal
One of the best electronic brands in the domain is Samsung. It is one of the preferred
mobile phones in the manufacturer and the products which have been featured in the media
across the world. The Company’s achievement is considered to be remarkable. The firm has
made the investment on the innovation with the objective in the introduction of the high end

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mobile phones to the rival of the competitor. In the year 2016 the firm has faced different
challenges and the association with the newest mobile gadget in the Galaxy Note 7. In the year
2016 Samsung galaxy manufactured the android based designed, developed as well as marketed
by the team. This was the first phone which had a USB-C connector and in the last phone of the
Galaxy note with a home button (Janeczko 2017). The demand for the smartphone on its launch
was high and the breaking in the south Korea which causes the international releases which was
delayed in some market. The Company received both the positive as well as negative reports
which were from the critics and it praises the quality in the construction in the HDR support and
in the streamline in the user interface. In the year 2016 the smartphone suspended the sale and
the smartphone and proclaimed one unceremonious recall which was found in the engineering
imperfection in the batteries of the models. It was found that the manufacturing imperfection in
the phone batteries had instigated some of the models to produce unnecessary amount of heat
which has resulted in the fires. The formal U.S recall was announced and on the year September
15 of 2016/ The exchange of the Samsung product has affected the phones for a new-fangled
reconsideration which has been exploited by the batteries and that they are source from a
different supplier (Williams et al. 2017). Unfortunately for the Company, the reports emerged
about the incident was said to be the replacement of those phones which caught fires, and
Samsung had to recall the galaxy note seven worldwide in October. This incidence permanently
ceases the manufacturing of the device in October. In terms of the safety precaution it was
distributed by the multilayer fireproof boxes in terms of the packing the Company distributed
multilayer fireboxes with specific instruction. Due to the recall created by the organization it sent
software update in the market which was envisioned to eradicate the capacity of work in the
mobile devices which includes restriction in the battery dimensions and blocking in the

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capability to connect to the wireless networks. The recall created an adverse effect on the
Samsung business in the third quarter of the 2016 and it was estimated that the company profit
went down by nearly 33% (Yun et al. 2018). Credit Suisse analysts that it was estimated that the
Company would misplace at least nearly 17 billion in the income. On January 23, 2017,
Samsung holds a live stream press conference which exposed the pedigrees of the blast.
Content Analysis
The root cause of the scandal was that it was found that the feverishness and the
sweltering of the phones was triggered due to the burning batteries of the phone and due to the
internal and the independent investigation which was established that the batteries are the main
reason of the Note 7 incident as stated by the South Korean technology. According to giant
Company, the investigation which has been carried out by their team said that it was only the
cause of the batteries and is not related to the hardware of any devices. However, other
technological experts have commented that the drive of the Samsung in the thinner phones and
the longer battery has also contributed to the situation (Bivins, 2017). The problem of the battery
in the Samsung Galaxy phones are said to be due to the overheating and because of the battery
management failures which causes the Samsung phone to smoke, catch fire and even to the
extent of exploding. The expert has said the Samsung Galaxy explosion was due to the fire stem
which caused a pressure. After a series of investigation which was conducted by the corporation,
it was revealed the main problem in the Samsung battery was the slim proportions of the phone
as there was no room for the heat-protective layer in the battery and the electrodes which came
into connection and it was caused due to the short circuit in the battery as revealed by Samsung.
However, critics have pointed out that theCompany was not able to effectively state what
went wrong in the batteries. The Company failed to issue address the issue to the public The

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Company vanished after it started to replace with the family gadget. The parent firm Amperez’s
did not comment on battery issue, and furthermore, the Company requested the partners to share
all the testing data.
The SVP of the integrated marketing communication of the Samsung said that the
Company became a daily meme discourse at the Association of the National Advertisers
Marketing Conference. The Company highlighted that the negative publicity was not only from
the press but the consumer as well. The Company in the press conference grabbed full
accountability for the crisis and admission about the battery malfunction. The Company also
opted for the third party auditors to address the issue (Miller, 2017). The Company also did away
with the fragmented brand identity, which lacked the brand identity as well the humanity. The
brand tapped into the inherent DNA relentless in the innovation and the crystallization of the
bigger bran purposes.
The firm has, however failed to use social media effectively, which is one of the most
important tools for effective crisis management in recent times. For instance, the brand took
nearly 40 days in order to post the pictures to show the gadget which is blazing it before it
responded or it acted on the issue (Allagui and Breslow 2016). Several scholars have
recommended the companies for the companies have to adapt to the social media strategy.
Samsung was not only swift in response to the problem in reporting to the social media;
however, they vehemently failed to monitor the post and the product. There was no constant
communication in the crisis of the brand Facebook, Twitter, as well as the social media pages.
It was also observed that the strategy used by the organization was not unified for
instance in Hong Kong the Company issued the statement assuring to the customer about the
gadget which was not affected because of the usage of the different battery however the

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Company had to withdraw the statement after the realization that it was affecting the sales of
other gadgets getting effected.
Timeline of the scandal
AUGUST
2ND August: Samsung unveiled the Note 7 Galaxy at the event in New York.
August 19: The Galaxy Note started its sale in the United States of America and South Korea.
( According to TIME this one was the modest and the welcoming the improvement in the
predecessor which offers an ergonomic design in the enhanced stylus.
August 24: The first report of the fire occurred in South Korea. Samsung Note first began ti hook
fire when its plugged to the charge.
August 31: The explosion is the charging surfaces in South Korea.
SEPTEMBER
1st September: Note 7 started selling in China.
September 2: The brand confirmed that there are 35 users who have reported the phone catching
fire and the explosion, which is changing in the worldwide system. The Company issued a recall
and the chain partner where the batteries of the Samsung was to be blamed. The phone remained
on the same in China as it had a different partner and it thereby supplied the batteries to those
partners.
September 5: The First Australian case of the explosion of the case caused nearly $1800 damage
in the Perth Hotel Room, and with the man claiming this the phone wedged fire. The airline of
the Company prohibits the Company from fighting with the tablets.

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September 16: The owner of the Company issues an official statement about the incident to the
owners of the recall.
September 19: Lawsuit was filed against the Company.
September 27: The replacement of the Galaxy 7 explodes in the China market.
October:
October 1: The Company resumes Note 7 in South Korea.
October 3: The sale of the Company resumed in South Korea with nearly 30000 devices which
were reported in the sold of the first weekend.
October 5: The Note 7 erupted into the flames in the Southwest Airlines from the Louisville to
the Baltimore. The phone is confirmed to be the additional of the Galaxy 7
October 7: The women in Taiwan suffered burn and the same in Virginia.
October 10: The phone permanently stopped the production of the phone and communicated that
the people should stop using the phone.
October 13: The Consumer product of the Safety announced the second recall and made it
illegitimate to wholesale the device in the United States of America.
November onwards
The New Zealand Telecommunication Forum proclaimed that the Galaxy Note 7 phone was
banned and from the local stores and was prescribed via the IMEI blacklist. On November 18
IMEI blacklist and on the 30th of the November Samsung announced that Australian banned the
Company. By December 15, 2016, Australia banned the device altogether. By introducing to the

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software, the Company wanted to restrict the charging capacity in the devices. In January the
Company barred charging the device till 15%.
Impact of the scandal
In terms of the government, the government did not publicise any ban on the Samsung
brand; however, the government of the country announced a ban of the specific product. The
Federal Aviation administration of various airlines have strongly counselled the people in not
turning the charge of the Samsung galaxy 7 phones on the onboard staff and aircraft and the
federal government also checked the baggage. The government of Korea had started an
individual investigation regarding the Galaxy 7 Crisis (Saadah 2018).
The expensive and the harmful recall of the millions of the phones had nearly wiped out
98 per cent of the profit of the Samsung dissection, and it was publicized. The core business of
the Company was that the business is slumped and dragged in the company profit down by
nearly 30 per cent with the lowest in the last two years. The flagship phone of the Samsung was
predestined to opponent the apple’s iPhone 7 however it in its place incurred a huge demand on
the Samsung brand. Scrapping the Note 7 witnessed the earning of the Company nearly dropped
by nearly 100 billion. Since the earning of the Company nearly accounted for 14% of the market
value in the stock exchange of Korea the catastrophe occasioned in nearly 1.21% fall in the stock
price of the Korean country currency which was weakened nearly by the 0.34% (Proserpio and
Zervas 2017).
The major impact which was born by the Company was in the stalk holder sector where
the public had the power to control the organizations were greatly effected with the major fall of
nearly 8.04% in the stock price of the Samsung (St. John III and Pearson 2016). However, the

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group of the stakeholders would face the crisis together; therefore the association would not
miffed much.
The functional linkage of the stakeholders who were the indispensable function of the
Company was further segregated into the input function; therefore the crisis would not hurt much
in the scene. In terms of the functional and the output function, this is said to be most effected as
well as impact. The output group included the consumer, retailers, distributors agonised the
nastiest damage and the fault of the batteries straight hurt the consumer the reputation of the
brand was as stake as the ‘safety retailers’ reputation (Ihlen and Fredriksson 2018). Therefore it
can be clearly said that these group required immediate attention. The input group namely the
offering source of the suppliers were less affected in terms of the output group; however, these
people also demanded some form of attention.
The media and the specialist group like that of the Moody, gave a very negative impact
on the matter and towards the crisis. The NGO’s especially the setting concerned groups,
strapped the brand for future planning. The groups had a worrisome messages in the stakeholders
output. The social media also played a big role in impacting negative image to the brand as it
became a source of the meme and created a lot of negative publicity for the brand. The
competitor especially apple was greatly benefited from the situation and the market share of the
brand increased
Critical Review of the scandal
The public Relation of the during the crisis varied in the organization. Public Relation has
a diversified function which includes handing the media, crisis communication, media relations,
investor relation, crisis management reputation management and also the corporate social
responsibility. When such type of crisis occurs in an organization, the first type of the sector that

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respond to the crisis is public relations (Lachlan et al. 2017). The management usually address
the situation by firstly collecting then processing and final spearheading the information. The
public relation sector of the Company tried to deal with the situation that way only. The
Company used various function of the publRelation under one umbrella and tried to deal with the
crisis. Therefore it can be said that the overall publRelation of Samsung seemed to be poorly
working on the issue of the management as well as the crisis communication.
According to academicians, the strategic management in the context of the public
relations has mainly three stages. The first one is the stakeholders followed bt the publics and
finally the subjects. The first stage, which is connected to the attention of the stakeholders is the
finest in order to minimalize the disaster or threat. When a problem remains unresolved, and the
community usually generates it, it is generally observed that the Company goes in the public
stage. The famous printing paper New York Times has disapproved the reply of the brand
Samsung to the Galaxy Note scandal. The paper further elaborated that the smartphone brand
severely delayed and halted the sales. The brand was also criticized by retailers like AT&AT and
Best Buy for not helping them in order to accomplish the crisis. The NewYork Times in the
publication house has used the term ‘bureaucratic’ to describe the publRelation of the Samsung.
The negative attitude which was made by the brand to the stakeholders particularly to the
output connexion group who is considered to be the most significant of the crisis management
was also disappointing from the brand end. It leads the organization face issue in the stage in
which the publics had happening to establish themselves in order pressurize torganization, and as
a result, Samsung finally acted on it.
The Company held a live streaming press conference after nearly half a year in order to
reply to the public. There are numerous public relations who mutual in the achievement and

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therefore brought one of the optimistic impact ( Zhang, Veijalainen and Kotkov 2017). The
Company for responding to the publics used three diverse establishments to test the cause for the
explosion. The Company set up a new organisation for the safety of the merchandise, and it
ensured that this was safe. Therefore this move was involved in the reputation management and
the social responsibility which reassured the customer that Samsung was making labours to
rebuild its standing. The Company also proclaimed that it is thinking of recycling IRS phone
which they used to address the corporate social responsibility function. This CSR activity of the
Company was linked to group concern about the environment. The Company told that due to the
designing of the product, it was an issue; therefore they would not sue the supplier. The action
was taken to send the signal to the suppliers that they are friendly, and the supplier could be
ensured that they do have a good future with the Company. The Company, through this action
also tried to show that they are taking accountability during the crisis. This technique was good
reputation management as well (Bundy et al. 2017).
However, it was noticed that the Samsung public relations were treated very differently in
China, which was the cause of disappointment among the stakeholders. The recall in China is
done much later than any other country (Stacks 2016). Samsung has used the media relations in
order to announce the battery was absolutely perfect. As China was the most significant market,
its decision was in the losses. Though, this action was augmented in the reputation crisis which
automatically injured the relationship among the Chinese stakeholders (Fan, Ju and Xiao 2016.).
Several media houses reported that the Chinese clienteles were annoyed at the brand due to its
discrimination policy in the crisis management. As a result, the Company lost nearly 7% in the
second quarter.

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Conclusion
From the above discussion, it can be concluded that the crisis faced by Samsung was
huge and multifaceted. Therefore it complicated a lot of changes in the environment, and
therefore, it unfair the relationship with the stakeholders. Based on the content analysis at can be
easily concluded that the Company responded late t address the issue and also there was no
common approach by the brand as observed different countries responded differently in handling
the situation. The incident impacted the brand from different aspect be it in the economic sector,
political sector or impacting the brand image and value of the brand. Regarding the issue of
communication, it can be clearly stated that the Company had a very passive issue which is
worse and is a result of the financial loss and the public relations among the stakeholders. The
crisis, as discussed above, should have been handled with more care.
Recommendation
The crisis that happened in the organization was unfortunate; however, there were many
things that the corporation could have done differently. First and foremost the organization
should have been more attentive as well as active in handling the situation. In public relations
specially in the age of the social media response should be much quicker, and the higher
management should always take ownership in such a situation. However, in the case of Samsung
it was seen the Company took nearly five months to respond properly, which was a good
opportunity for the public to question the Company. It is undoubtedly that the event could have
shaped into much bad picture which would permanently have an adverse effect on the image of
the Company. The second point is that the organisation should have determined firstly the most
effective stakeholders and make strategy beforehand to maintain the relationship with the
chalked out stakeholders. This would keep the issues down before it could have reached the

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public gaze and scrutiny. The third point is that the Company was sold globally, and therefore,
the treatment which was meet out in order to address the crisis should have been uniform. As
observed above the Company did not have a unified approach which further escalated the
situation. In countries like China the downfall of the stalk further indicated the situation.
Additionally the crisis worsens the reputation cannot be rebuild at once. Fourthly the Company
before launching the product should have been beware of over-ambition in order to prove a great
competitor for Apple the Company just launched the product in haste without proper quality
therefore in the aspiration of marinating the size zero the Company overall shrunk.

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