Sebastian Feliciano

Daniela Bogotá

Alejandra Cuervo

Samsung and one of the biggest crises.

In this essay the Samsung company is going to be related, which currently shows

sales and earnings drops of 55.6% year-on-year, representing 5,580 million dollars, in

the second quarter of the year. Likewise, its sales have fallen by 4% to 47.5 billion

dollars between the periods April and June 2019. Given this, the firm faces challenges

of commercial, business and global economic uncertainty. Since in the middle of the

trade war between the United States and China and recently Japan's export

restrictions against South Korea ( Yonhapnews 2019)

One of the biggest crises that affected Samsung was caused due to the exploitation

of their Galaxy Note 7 phones in 2016 due to the battery that causes cell phones to

explode, this occurred in airplanes causing fires and affecting passengers, forced to

curb sales of one of its most demanded products compared to rival Apple iPhone 7.(

BBC Mundo, 2016)

According to EMIS, Samsung's net profit shows that between 2015 it presents an 8%

difference compared to 2016. showing losses in sales of Samsung Galaxy 7 Note due

to the fall of the devices.

To solve the problem of the Galaxy Note 7 the company acted efficiently about the

management of this crisis. First samsung stopped the production and sell of the cell

phone, the who has already the cell phone the company gave them two options: 1.
The return of all their money, 2. The company provide a new cell phone. But this first

strategy it didn't work very well, because the cell phones that they gave in the form of

warranty were the same as the Galaxy Note 7 and also left with failures. So Samsung

stop to give Note 7 and start to give S7 or S7 Edge (Crónica global, 2016).

The relation with the chapters:

In this case we can observed that Samsung have to stop his globalization of

production that is to take advantage of the production of scales, so when it start the

problem Samsung was producing the Galaxy 7 Note phone it high scales but when

they start to exploit Samsung had to reduce the production until they had to spot for

complete the production of this kind of phones, meanwhile they had to produce a lot

of S7 to give to the consumers affected, despite this problem Samsung nowadays is

one of the biggest companies.

In the other hand Samsung is an international business this means that engages in

international trade and operate in more than one country, because of globalization of

market that in simple terms is the merging of distinct and separate national market

into a global marketplace, Samsung have to satisfy consumers around the world in a

global market that in this example is smartphones, in which they had a lot of

competition and with the problem they had, competitors take advantage and some of

the clients change Samsung brand to other brand.

Besides Samsung did not fulfilled with the product safety law that is set certain safety

standards in which a product must adhere, because of this Samsung receive a lot of

demands from consumers affected by his product, the reaction for this was to give

customer all the money back, or give a new cell phone, when this problem happen

Samsung also receive a lot of bad publicity inclusive people create games of bombs
representative by the Samsung 7 note, but because of his good management of the

crisis they overcome this problem with technology and the use of internet to give

consumers rapidly a answer for this crisis.

We conclude that even though the company failed in the first strategy to solve the

problem, they acted quickly in giving priority to consumers. Samsung learned that if

they skipping quality processes, they put in risk the image of the company. On the

other hand, this case has a strong relationship with the globalization because all the

phones that sold around the world presented the failures that affecting the company’s

sales. Finally, everything that happened in recent years caused Samsung to lose

credibility and continue to reduce its current sales compared to 2015. In addition, its

competitors took advantage of their mistake by offering better quality products.

Images:

1. Taken from BBC mundo.

References:

Yonhap.(28 de agosto de 2016) Las ganancias de explotación de Samsung

Electronics disminuyen , recuperado el 28 de agosto de agosto de 2016 del sitio web:

https://sp.yna.co.kr/view/MYH20190731011500883
BBC mundo.( 2016,11 de octubre) Samsung surge a los usuarios que apaguen sus

Galaxy 7 Note por los problemas de la batería que explota, recuperado el 11 de

octubre de 2016 del sitio web: https://www.bbc.com/mundo/noticias-3761473

EMIS (2017 - 2016 - 2015) Samsung Electronics Co.,Ltd. (South Korea), recuperado

de la plataforma: https://www-emis-

com.ez.unisabana.edu.co/php/companies/index/financials?pc=KR&cmpy=1651328&

view-fins=all&fptype=A&curr=USD&display_units=6&hide-

empty=yes&excel_export=&form_sent=1&cons=A&pub_standard=&periods%5B%5

D=2017YN&periods%5B%5D=2016YN&periods%5B%5D=2015YN

Crónica global.(2016, 12 de octubre) Samsung ofrece dos soluciones a los usuarios

del Galaxy Note 7, recuperado el 12 de octrubre de 2016 del sitio web:

https://cronicaglobal.elespanol.com/business/samsung-ofrece-dos-soluciones-a-los-

usuarios-del-galaxy_61964_102.html

Charles W. L.Hill (2013). Globalization (pp. 2-41) , National Differences in Political

Economy (pp. 44-67), Political economy and economic development (pp. 68-97).

International Business: Competing in the global marketplace. New york: The McGraw-

Hill.