Principles of Management Case Study: Samsung Note 7 Recall Analysis

This case study analyzes the Samsung Galaxy Note 7's product failure, examining the initial success, the subsequent reports of overheating and combustion, and the company's recall strategies. It delves into the symptoms, the major problem related to the battery, and the causes, including manufacturing defects and inadequate investigation. The study highlights the impact on brand image, consumer safety, and the financial losses incurred by Samsung. It discusses the company's recall efforts and the eventual decision to cease sales and production, emphasizing the importance of thorough investigation and proactive measures to prevent such failures. The case also considers the competitive landscape, the product's features, and the overall implications for management and leadership within the company, including the importance of quality control, customer satisfaction, and crisis management.

Running head: PRINCIPLES OF MANAGEMENT
Principles of Management
Name of the Student
Name of the University
Author Note

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Summary
The smart phone industry is a rapidly growing industry in the global market. The
Samsung is one of the leading global manufacturers operating in information technology and
mobile communications, consumer electronics and device solutions. The case study shows the
detailed information regarding the incidents of Samsung Galaxy Note 7 which was rated as four
and half star as compared to Apple iPhone 7 Plus. The company further stand second after Apple
in the leading mobile industry. The product launched was marked as the failure of the reputation
of the brand Samsung. The Galaxy Note 7 when launched made huge revenue for Samsung as a
result it increased the sales and production of the company. The reports of overheating and
catching fire on the mobile started to be informed soon after which the first recall was placed by
Samsung in order to sustain their goodwill and reputation which cost the company about 2.5
million. Anyway, this failed and again the same problem came to arise and finally the product
was ceased in terms of sales and production both.
Symptoms
The symptoms started as overheating of the batteries and the combustion of the mobile
phones. In some cases the mobile phones exploded suddenly. The user after complaining about
the product to Samsung stopped using the products. The quality commission put stop on using
Samsung Galaxy Note 7 and also stated that the customers using the product should stop using it.
The smart phone industry is rapidly increasing the markets such as North America,
Western Europe, Japan and Asia in 2.5 years. The android OS had immensely positive impact
over the global smart phone market. The feature of android includes low cost services and user

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friendly software has attracted a huge amount of customers to operate and consume worldwide.
For many of the manufacturer’s Android have driven and opened a platform for competitive
market.
The Samsung is one of the leading manufacturers on a global basis in terms of volume
(Samsung ca, 2018). It operates in more than 50 lawsuits. The Samsung brand is considered as
valuable in the world. Samsung was a manufacturer of mobile phones and its high level of
vertical integration was its strength. The innovativeness of adapting methodologies and
adaptability of technological trends were its internal strength. Later it was reported, that an
incident took place in an airplane where the smoke filled inside the flight which was caused due
to the combustion of Samsung mobile phone. After this incident, the flights between Canada and
United States ban the phone usage (Hartley, 2017).
Major problem
The major problem was related with the battery of the Samsung Galaxy 7 Note. The
battery was getting overheated causing to explosion of the mobile. After the launch of the
product, the arrival of reports regarding the complaints related to overheating and catching of fire
due to the mobile started coming. It affected the brand image and as a result there were many
losses caused to the consumers who purchased and to the company as well. This incidents one
after another happening with the users kept on reporting even after the first recall. In the first
recall Samsung admitted their mistake and stated that there was a defect in their mobile phone
batteries and announced that all the Samsung Galaxy Note 7 were getting replaced after the
fixation of the battery. However, the same problem persist which again made the company to
recall and this time. The major problem that pursued with Samsung was they did not pay

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attention in the internal problem instead they again launched Note 7 with the same issue. Later
the company had to take decisions to cease the sales and production of Samsung Galaxy Note 7
(Smith, 2017). In place the company should have tested and investigated the case and all the
incidents taking place and reason in brief in the initial stage to prevent the second recall.
However, the first recall was going according to the plan and again the analyst had figured out
the sales unit as 15 million units but it failed due to the lack of investigation.
Causes
Instead of thoroughly investigating about what went wrong the company admit the
mistake and soon released another version of the Note 7 with the same defect. Instead it should
have tested its mobile phones again with a small group of sample people before launching after
the initial recall. The company expected losses and that also immediate from the mobile
business. It was a result of the insulated elements led down by the short circuit and self heating.
After investigation it was reported that the battery manufacturing issues stand out to be
the reason for the galaxy Note 7 fire. There was a defection in the negative electrode in the
production of batteries of the first batch and in the second batch of production melted coppers
were found (Heaps & Poindexter, 2017).
Samsung’s recall strategy was planned to sustain the goodwill and loyalty among the
customers and the media but unfortunately it turned to stand less satisfactory with the upcoming
reports of overheating and combustion. The batteries were getting overheated and causing to
explode. This resulted in the damage to both consumers and company. The safety of the
consumers were hurt which ruined the reputation of the company.

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The Samsung Product Galaxy Note 7 is created with a 5.7 inch display with Android
6.0.1 Marshmallow, and 12 mega pixel cameras with 5 mega pixel front camera. The battery is
of 3500 mAh with RAM 64GB. It is a wireless charging device and can give competitive
challenge to Apple iPhone 7 Plus. The product was facing a problem with its quality of its
battery which was defected. However, the company had tried and assured its consumers,
retailers, distributors and its stakeholders by taking apology and gratitude and stating that it will
give its all efforts to regain the customers trust.

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Reference
Heaps, M., & Poindexter, K. (2017). The Quest for Quality in the Modern
Enterprise. Quality, 56(4), 32.
Smith, A. D. (2017). Integrating Intellectual Property and the Smartphone Patent Wars: Case
Study of Conflicts of Supplier Partnering.
Hartley, S. (2017). The case of the exploding Samsung phones. Busidate, 25(1), 9.
Samsung ca. (2018). Mobile | TV | Home Appliances. Samsung ca. Retrieved 21 March 2018,
from http://www.samsung.com/ca/