Monday, September 19, 2016

How Samsung Botched Its Galaxy Note 7 Recall

Link: http://www.wsj.com/articles/samsungs-management-of-recall-wounds-companys-image-1473928872
Written by: Georgia Wells, John D. McKinnon, and Yun-Hee Kim
Blog by: Craig M. Banner

The recent recall of Samsung’s Galaxy Note 7 has exacerbated an already-botched rollout that was anticipated to gain increasing market share against Apple’s upcoming iPhone 7.  Galaxy Note 7 owners that purchased their phones before September 15th have been advised to seek a replacement device or refund due to fire hazard issues, which are caused by faulty batteries that can explode while charging.  The recall of 2.5 million devices across ten countries has created a legal and logistical nightmare for Samsung, who primarily relies on independent retailers to sell its devices and does not have an infrastructure in place to combat these problems.  Samsung’s conflicts with the U.S. Consumer Product Safety Commission (CPSC), who have both disagreed on the extent of the device’s problems and how the recall should be implemented, have led to delays in resolving the issues related to this incident.  As a result, the company’s response has the potential to hurt Samsung’s credibility with its customers for a long period of time. 


While Samsung has implemented measures to assist customers that still own these devices, such as rewriting software programs and issuing recall notices, much concern lies with the way that Samsung markets these devices through the lens of the International Planning Process.  The first phase of this process involves preliminary analysis and screening, with home and host-country constraints being primary factors.  Political and legal issues within home-country constraints were caused by Samsung’s ineffectiveness in communicating with the CPSC, while the host-country’s distribution structure was not equipped to handle a massive recall of Samsung’s cellular devices.  The second phase involves defining market segments and adapting the marketing mix accordingly.   Samsung’s methods of distribution, which entrust a conglomeration of independent retailers to handle the sale of its devices, have proved inadequate in providing an effective way to recall these devices in an organized manner.  Phase three, which involves developing the marketing plan, describes action programs that are designed to assist in fulfilling the marketing plan’s objectives.  The company’s apparent inability to implement operating procedures to handle an international recall of these devices reflects poorly on the company’s strategy in marketing this product.  The fourth and last phase is called implementation and control and involves measuring performance, assigning responsibility, and correcting errors that occur.  While this phase is ongoing, Samsung must make major efforts to ensure that these devices are recalled as quickly as possible and assign an adequate measure of accountability to those deemed responsible for this incident.

3 comments:

  1. Good article and one of the leading topics for the technology market. CNBC just announced that the Galaxy S8 is scheduled to debut in approximately five months. This will be Samsung's opportunity to promote another cutting-edge mobile device after the Note 7 disaster and regain the public's trust. The introduction of another Samsung phone will be telling. It will be interesting to see how much damage the Note 7 has done to Samsung’s reputation and ability to sell high-end mobile devices. Ally M.

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  2. The article does a good job at showing how strategic research is important before starting to distribute a product to customers. The recall of the Samsung note 7 clearly shows some failures for the iPhone manufacture since it failed to conduct enough research to determine the safety its product. This will definite affect the credibility of the firm and in the process lose some customers who may opt for other phones such as iPhone. However, in order for Samsung to stay at the top of the phone industry, it will need to build more customer confidence in their future products. In addition the article shows that customer safety should always come first in the manufacture of any product.

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  3. This Samsung phone is such a hot topic, was great for your blog.I think it's interesting that Samsung is not prepared for a recall, and that they haven't been able to assemble a special team to take care of the problem with some urgency. I feel like some of these large corporations make mistakes and just hope that they will go away because they don;t know how to fix it, or just don't do anything about it in a reasonable amount of time. I would like to see how many customers stay with the Samsung phone, or if they lose a lot of market share after this exploding phone situation.

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