Samsung is blowing up, literally
The Note 7 Meltdown Will Haunt Samsung for a Long, Long Time
http://money.cnn.com/2016/09/12/technology/samsung-note-7-recall-battery-fires-stock/
The article discusses Samsung’s new phone, the Samsung Note 7. This phone is Samsung’s flagship phone but due to a faulty battery, there have been several dozen cases in which the devices have caught on fire or have just straight blown up. With information from one month ago, this has led to 26 reports of burns, 55 reports of property damage and in extremely severe cases, reports of nerve damage. The numbers are surely growing and one such individual who suffered burns on thigh and calf has completely lost feelings in the affected areas and had to perform several renditions of skin grafting to fix his leg. Samsung is now facing many lawsuits and has decided to completely stop all production of the Note 7. With this recent event, the brand of Samsung has been very damaged and has created a balanced network that negatively impacts Samsung.
The network in consideration is Apple, Samsung and the customers. Before the Samsung Note 7 incident, Apple and Samsung had split the customers and had an inherently negative relationship with each other due to the fact that they are rivals. Now, Samsung customers who had the Note 7 are being forced/highly recommended that they return the phone and cannot even get a new Note 7 because those are faulty as well. Chief Analyst at Jackdaw Research says, “This is the worst-case scenario for Samsung. Now that the replacement devices seem to be having the same problems, it calls into question Samsung’s whole product testing methodology and its scrutiny of its suppliers”. In fact, Samsung is paying their customers a full refund for their Note 7 as well as providing credit to buy competing phones, including their rival’s phone – the iPhone. This has created a negative relationship between the customers and Samsung because the customers feel as though they can no longer trust Samsung and has increased positive relationships between the customer and Apple because there has been no issue in reliability and the old Samsung customers are turning to Apple in wake of this event. Mark Newman, a Bernstein analyst who covers Samsung has even said, “If a customer is going out to buy a phone, they’re going to buy an iPhone 7, not a Note 7”. Samsung is at the end of two negative relationships while Apple and the customers are at a positive relationships, causing Samsung to plummet. While Samsung is a major company and has several other flagship phones that work just fine, their brand has been tarnished and they have experienced the financial effects of this as shown by the fact that their stock dropped by 7% immediately after the company told users to stop using the Note 7.