Crisis Communication Strategies: Analyzing the Samsung S7 Fiasco

This report provides an in-depth analysis of the Samsung S7 Fiasco, focusing on the crisis communication strategies employed by the company. It examines the initial response to the exploding phone issue, including the recall and public statements. The report highlights the various communication channels used, such as social media, press releases, and customer service, and assesses their effectiveness in managing the crisis. It also explores customer perceptions and the factors influencing them, including brand loyalty and trust. The analysis further delves into the eight components of effective communication, evaluating how Samsung utilized each component to navigate the crisis and mitigate the damage to its brand reputation. The report concludes by emphasizing the importance of effective crisis communication in maintaining customer trust and brand image, and how Samsung's actions, despite the initial setback, ultimately contributed to its ability to recover and maintain its market position.

Management Communication
Samsung S7 Fiasco

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Introduction
Communication forms the backbone of any business organization. Effective communication
strategies adopted by the business set the right positioning for the brand and build a connection
between the brand and its stakeholders (Guffey & Loewy, 2012). Businesses are seen
communicating with their customers in the form of media, PR, customer service, customer
relationship management strategies and recently, Social media (Meredith, 2012). This report
throws light upon a major issue faced by electronics giant Samsung over the S7 fiasco. The
organization underwent troubled waters and immense loss during the case. The brand confirmed
an estimated loss of over $ 3 billion (Tuttle, 2016). However, it was only the effective
communication strategies adopted by the brand that saved the brand’s positioning in the market.
Samsung s7 fiasco
Samsung S7 was one of the most anticipated mobile phones since the time it was announced in
the market. The mobile phone model was launched on 2 August, 2016. The device had already
created a buzz in the market and hence many people had pre-booked the phone. Once the device
was launched, the demand continued to grow for some time. However, by the end of August
things started going downhill. The first Samsung galaxy S7 explosion was reported on August
24, 2016 in China. The device exploded when it was charging and by the end of August, over 30
smartphone explosions had been reported (Hartley, 2017).
On 2 September, 2016, after analyzing the issue to an extent, Samsung released a public
statement announcing that the brand will replace the current S7 with a new one (Samsung, 2016).
This worldwide recall of a particular smartphone model was the largest in consumer electronics
history (Dempsey, 2016). Samsung urged the users to return their smartphones at the earliest.
The brand even announced an over the air update that would limit the charging of the phone to
60% (First Post, 2016).
The brand’s shares started plummeting and it was losing trust (Shamsey et. al., 2017). Customers
from across the globe resorted to social media to complaint about the brand.

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Source 1 Twitter
The brand image for Samsung was at a toss and it was imperative that the brand responds to the
issue in a planned and highly effective manner.
Crisis communication channels
It has often been seen that various organizations and even leading businesses face severe wrath
over a bad quality product. However, it is the response of the business to its stakeholders as well
as its attempt to communicate with them that creates a protective shield around the brand. The
very first rule of communicating under a crisis is to apologize and control the panic that has
occurred.
Samsung resorted to all communication channels including their own website, official social
media pages, media releases and new reports to apologize for the mistake that occurred at their
end. The brand asked all customers to return their phone, promised to deeply analyze the issue
and fix it at its very core.

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Source 2 Pinterest
Channel of communication at the time of a crisis communication plays a significant role in
addressing the issue (Schultz, 2011). Samsung understood this and resorted to all possible
channels to address the issues. A brand can initiate a communication with stakeholders either
through public platforms and reach out to a wide audience or they can communicate in a one on
one manner and demonstrate excellence of service. At this time, Samsung did both. The social
media channels and media reports aim to engage audience at large and calm the situation (Veil
et. al., 2012). On the other hand, Samsung further tightened its customer service centers,
increased the number of temporary recruits and ensured that anyone who gets in touch with the
brand gets his or her issue resolved.

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Source 3 Samsung
Samsung even organized various press releases and media interviews and accepted its mistake
and addressed the issue. At such a time, an organization could have completely ignored the press
and focused on resolving the issue. But Samsung’s head of business mobile division, Koh Dong-
jin, personally ensured that the seniors of the business be present in all the media conferences
and take responsibility for the issue.

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Source 4: Yonhap
Customer perceptions
Individual perception plays a significant role in any form of communication (Coombs &
Holladay, 2011). Individual attitudes, values and even psychological state largely impacts their
perception of the communication message. Some of the customers were furious and completely
boycotted the use of Samsung and on the other hand, most of the customers continued to hold
trust in the brand. Reuter’s survey poll resulted that a whopping 91% of the current Samsung
customers are likely to buy their next phone from Samsung only (Dazeinfo, 2018). This is the
kind of loyalty that Samsung needed at this point of time. This loyalty and immense trust in the
brand is not just a result of years of excellent service but also years of impeccable
communication strategies adopted by Samsung.

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Source 5: Wall street journal
Samsung even resorted to publishing a page long apology in the newspaper. Even the press
conference was apologetic and thorough. The company took complete responsibility and
promised its stakeholders to fix the issue. It is important to note that all of these announcements
from Samsung came at a strategically planned time. Koh had announced the results of the

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investigation just a few days before Samsung reported its highest quarterly profits in three years.
This further built trust among consumers of the brand.
Source 6: Wall street Journal
8 Components of communication
An effective communication process can be broken down into 8 essential components.
Fortunately for the brand, Samsung aced at all of these 8 components to ensure the efficacy of
their communication during this tough time.
Source
Source is the person who sends the message. Samsung was careful about ensuring the most
appropriate source of all communications made by the brand. While announcing the recall, the
message was sent by the chief operational office, Tim Baxter. Country heads made apologies and

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onus of resolving customer issues in their particular countries. It was evident that all the leaders
of the brand are taking complete responsibility.
Message
The messages transmitted by the brand were humble, carefully curated and had an emotional
appeal as well as a future plan of action.
Channel
Channel is the way in which the message travels between the sender and the receiver (McQuail
& Windahl, 2015). Samsung resorted to every possible channel to reach out to its customers and
be available for them. Social media including the brand’s official Facebook and Twitter account
gave live updates many times in a day. The brand itself called upon press releases to leave no
room for speculation and even resorted to print media as a channel of communication.
Receiver
Samsung customers were the receivers and given their unabashed loyalty to the brand, it is safe
to assume that they understood the context of the message by the firm.
Feedback
Responding to the source intentionally or unintentionally is a way of giving feedback. Samsung
customers took to social media to write about the brand and this was their way of providing
feedback. Many customers even demonstrated support and loyalty towards the brand.
Environment
The global environment at the time of a crisis is that of stiff competition and when customer
centricity takes a foreground.
Context
The language and tone of communication was formal but added a personal touch which gave the
message an emotional appeal. Context is all about what communicators expect from each other

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(Neuendorf, 2016). Samsung handled the situation in a manner that was expected by such a
strong brand.
Interference
Interference is anything that blocks or changes the source’s intended message. The immense
wrath on social media and funny tweets from people across the globe acted as an interference.
Source 7: Phone arena
Conclusion
Samsung is a leading name in the consumer electronics segment. 2016 proved to be a tough year
for the brand owing to the explosions caused in one of the most anticipated models of the year.
Samsung faced immense wrath over the issue for a long time. However, Samsung set a perfect
example of handling crisis communication in an effective manner.
The organization took complete responsibility for the problem faced by its customers. The brand
took to every leading communication channel and platform to apologize for the inconvenience

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cause. The brand even ensured to improve its customer service centers during this tough phase in
order to be available for the customers who contact the brand. Eventually, the brand recalled all
the phones and replaced them with new ones. The cancelled pre-orders were refunded in an
effective manner.
Communication strategies adopted by Samsung during this phase have truly garnered trust
among employees. It was perfect timing, context and channel of message that hit the nail right on
top and ensured that the brand calms the panic and restores trust. Overtime, it would be safe to
say that Samsung will not be known as a company that made exploding phones but it will be
known as a company that made exploding phones but embarked on the road of redemption,
earned customer loyalty and continued to generate mammoth revenues for the brand.

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