Samsung hasn’t been looking very well lately. The release of the Samsung Note 7 has stirred up major controversy as reports of batteries overheating and exploding surfaced – which even led to the Federal Aviation Administration (FDAA) advising against packing the cellphones into checked baggage. The recall of 2.5 million units of the exploding Note 7 cellphones has been dubbed,

“the smartphone industry’s biggest recall to date” – Wall Street Journal

On Friday, September 9th, the company’s market value dropped by more than $10 billion, and dropped another $15.9 billion the following Monday.  Aside from the major drop in shares, there has been many reports speculating that the cash costs of the recall is estimated at $1 billion.

Image courtesy of Forbes

The Note 7 catastrophe does not only bring harm towards the company in a financial stance, but more importantly, their brand image and reputation would be heavily affected.  In my personal opinion, the short-term financial losses suffered by the company now are minuscule compared to a loss in customer loyalty and confidence; which may potentially have a larger effect on the business in the long term.

Even though Samsung claims to have solved the issue of defective batteries,  putting the Note 7 back on the market very soon, some consumers (like myself) might still be wary of the product.  The possibility of losing consumers is very high especially since the smartphone and technology market is growing at such a rapid pace, and also the company’s largest competitor, Apple, has just recently released the new iPhone 7.

The brand has not been able to recover completely from the crisis yet, especially because of the recent reports of exploding top-loading washing machines from the company.  And prior to that, the company has already recalled 70,000 washing machines in Australia after claims of the machines causing fire.

Perhaps the full-blown disasters indicate that it would be an appropriate time for Samsung to conduct a SWOT analysis on the approach they should take to come back up into the market.

I think that the company should invest more into its operations department.  They should be focusing more in the quality control section – for example, conducting more tests on the products before they are released into the market.  Aside from that, the company should also invest more into its research and development department in order to develop better ways to engineer or produce their products to ensure a higher safety standard.

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