This blog is based on the external blog Why Samsung’s Note 7 Crisis Won’t Hurt Its Brand Long Term by Utpal M. Dholakia. Basically, I agree with the writer on the following points.
Firstly, it is the allegiance of current customers that rescue Samsung from this imbroglio. For a long time, Samsung acknowledges the Points of Parity against Apple and is committed to offer same advanced designs. Meanwhile, Samsung emphasizes its Points of Difference that it could provide users with affordable price, more flexibility over control system. As a result, Samsung has cultivated a large cluster of loyal customers, for whom the PoDs and PoPs of Samsung made it irreplaceable. That`s why the customers are willing to accept the product again under the duress of explosion.
Secondly, I concurred with author that the national pride accelerate the recovery of Samsung from the scandal. It is astonishing that an estimated 20% of South Korea economy is composed of Samsung. Rather than an electronics manufacturer, Samsung is a conglomerate which integrates many subsidiaries and affiliated businesses including heavy industry, engineering, insurance etc. These industries support many families in South Korea and represent South Korea in the world. That`s why citizens have inclination to forgive the fault and trust their company again. Besides, the diversification make Samsung adamant during the scandal.
However, the future of Samsung is not as positive as what the author asserts in the article. Since Samsung is facing the headwind of new entrants in smartphone market, according to Statista, in the past 3 years, its market share plummet from 31.9% to 22%. Another crux is in the supply power of Samsung. According to its financial report, Samsung tends to scale down semiconductor product line owing to the decrease of chips` selling price and buyer volume, which may further enervates Samsung`s comparatively advantages in supply chain. Also, the crisis of buyer power may be intensified due to Note 7 fiasco. As more inexpensive products enter the market, consumers acquire abundant choices and bargaining leverage. In upscale market, Samsung can`t surpass apple in its brand value and IOS system. In middle and low end market, Samsung`s living space is being squeezed by the its competitor`s low price strategy. As a result, Samsung`s brand differentiate become more and more ambiguous. To make things worse, the fiasco now break the balance in the market. And this change seems hard to be reversed.
As far as I am concerned, the fiasco of Note 7 would actually negatively impact the future running of Samsung Electronics, and maybe the turning point of Samsung Electronics from prosperity to decline.
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reference
Samsung operating profit plunges 30% in wake of Note 7 fiasco. (2016, October 27). BBC NEWS. Retrieved October 31, 2016, from http://www.bbc.com/news/business-37784079
Team, T. (2015, February 11). Trends That Will Drive Samsung’s Semiconductor Business In 2015. Forbes. Retrieved October 31, 2016, from http://www.forbes.com/sites/greatspeculations/2015/02/11/trends-that-will-drive-samsungs-semiconductor-business-in-2015/#7b86825376d8