Full name: Nguyen Thi Thy

Class : DH43AV002

ID Student : 31171023160

THE EFFECT OF TECHNOLOGICAL

FACTOR
ON SAM SUNG
GALAXY NOTE 7 EXPLOSION

ABSTRACT

The purpose of this report will look at how the technological factor affected on Sam Sung and
the company’s approaches to the issue. Sam sung faced to catastrophe of the Samsung Galaxy Note
7’s batteries explosion which caused the great loss to the company, its brand image as well as. Then
Sam Sung took actions to cover this situation and regain trust from the customer. Besides, this report
also refered to other firm which was affected by technological factor like Sam Sung.

INTRODUCTION.

International Business Environment is multidimensional including the political risks, cultural

differences, exchange risks, legal & taxation issues. It comprises political, economic, technological,
and social-cultural factors…
Succeeding in the international business environment is dependent on the extent to which managers
understand key factors in the international business environment. Thus, studying international
business environment is really important. Only focusing on customers is not enough. Companies
have to pay attention to the competition, government policy and regulation, and the broader
economic, social, and political macro forces. International business environment is enable
companies to get straight that today’s environment get complex and dynamic and they cannot just
remain passive in the market. They must learn to live with chaos in order to cope with the radical
changes.
CASE PRESENTATION.

Consumer electronics giant Samsung Electronics is an international corporate, It is the

flagship subsidiary of the Samsung Group. Samsung Electronics the largest electronics industry in
South Korea, engaged in LCD, semiconductor, mobile phones, digital media business, it is the
biggest sales of the electronics industry manufacturers in the worth. “Inspire the World, Create
the Future.” is the vision of Samsung Electronics. In the mobile phone market, Samsung
Electronics is the number one of the market share in the world, successfully beat a traditional
mobile phone manufacturers such as: Nokia, Motorola, Sony. Sights on future market trends to
the touch smartphone, Samsung also compete to launch the products corresponded to the
competitors, such as Galaxy S2, to compare with the biggest competitor Apple’s IPhone.

When doing business, none of company can avoid being effected by international
business environment. Sam Sung is not exception. Samsung is one of the companies that have
been engaging in international business for decades.

Technology is Samsung’s biggest strength. Everything they offer — phones, televisions,

tablets — are all facets of technology. The company consistently creates upgrades to existing
product every couple of years. Then there’s the risk of manufacturing errors. Samsung
experienced this first hand with their exploding phones. This was considered to be technological
factor that effected on Sam Sung.

CASE ANALYSIS.

Issue

In 2016 ,, Sam Sung faced a disaster, there’s the risk of manufacturing errors, the batteries
inside the Samsung Galaxy Note 7 were faulty and easily overheated, causing them to explode.
Within weeks of the launch, Samsung's customers in South Korea reported that the phones
were catching fire. Some had even exploded. By September 2, the company stopped producing
the phone and was sending replacements. Its business was buckling: Samsung quickly lost $26
billion in value in the stock market. It got worse. A U.S. government recall followed on
September 12; a second came in October when the replacement units had the same incendiary
issues. Analysts estimated the setback would cost the company $17 billion in sales, adding that if
the crisis didn't sink Samsung's mobile business, it would almost certainly kill the Note line. The
Galaxy Note 7 explosions mark one of the largest-ever fiascos for a hardware company in recent
memory. Samsung issued formal recalls for the phones not once, but twice. It lost billions of
dollars in potential profits. And for some consumers, the incident eroded trust in the Samsung
brand.

Approaches
 So what Sam Sung approached to this scandal?

 The first step in the brand recovery was making the unusual move of calling a press
conference to reveal the results of the investigation. Samsung’s mobile head, DJ Koh,
explained in depth the root cause of the issue: the high-density batteries provided by one of
its suppliers had a design flaw that could cause spontaneous combustion within the device.
Sam Sung took all responsibility and gave a deep apology to the public. They dared to admit
that they didn’t know what made battery go wrong. They was decisive and exerted
themselves to the utmost to figure out what made the phones explode.

 To prevent it from happening again, Samsung set up a battery advisory group that
included academics from Cambridge University, Stanford University and the University of
California, as well as battery consultancy firms. Samsung deployed 700 researchers who
stress-tested 200,000 Note 7 phones, 30,000 Note 7 batteries, and enlisted a third-party audit
of the investigation for full transparency

 According to Competition Administration Department of the Ministry of Industry and

Trade of Vietnam, only considering in Viet Nam, Sam Sung spent about 240 billion dong to
refund over 12,000 Galaxy Note 7 owner, and aslo offered each owner a voucher costed
1.5milions to afford other Sam Sung products.

Evalutaion

Those move was crucial for Samsung, but more so for the brand, as it owned up to its
missteps. Revealing the extraordinary measures taken to identify the cause was another step
in rebuilding consumers’ shattered confidence.
Those were meritorious and got support by a large number of users. And many people
even shared that they were willing to spend money buying Note 5 and S7 or accepted waiting
for Sam Sung to release Note 8 to buy in order to show support to this electronics giant.
Samsung isn't the first company to have a major consumer recall, nor will it be the last. It’s
how a company handles a product recall that determines its future success or failure. While
it’s been a difficult time for Samsung, the company took ownership of the issues, acted
quickly and worked diligently to fix its problems. With its new and improved quality
assurance processes and design prowess, Samsung should make a strong comeback as the
world awaits the arrival of the Galaxy Note 8.

Recommendation:

Before launching any product, Sam Sung need to have a deliberated inspection, because
the quality of the product is the leading factor that decides to the success of failure of the
company. To further enhance the customer services and the quality of products, it is
recommend to build up the flagship store and more retail trader all around the world, it can be
expansion the sales network and strengthen the market power. In addition, in order to prove the
 quality of products, it is recommend Samsung Electronics to make the adjustment of the
warranty period of products.

FIRM IN A SIMILAR SITUATION

Technological factors affected on IPhone

Not only was Sam Sung , Apple used to be effect by technological factors. In 2012, April, the
company was placed at a disadvantage when it was forced to start investigations into Wi-Fi issues
that were affecting its latest iPad Tablet. Some of these problems included slow speeds, inability to
pick wireless networks and dropped connections. Some of the symptoms that were noted with the
product at the time included slow-Wi-Fi speeds, intermittent connectivity and the Wi-Fi could not be
seen. The company was forced to find ways of addressing these problems.

Just recently, in 2014 February, the company released Mac and Mobile operating systems in
order to fix critical security flaw problem. Some of the users of the product were exposed to hackers
who made attempts at intercepting their internet communication. The company in order to address
this problem released iOS for iPhone 4 as well as later models, iPad 2 and fifth generation iPod
touches.

Security flaw is a major challenge and it is one of the difficulties technological factors that the
company has had to deal with. This is because the company’s products had the potential that made it
easy for hackers to keep track of and monitor exchange of sensitive customer communication. The
flaw was in the manner the OS provided important information which is known as SSL (secure
sockets layer) or TLS (transport layer security). The two layers are supposed to make it possible for
users of Apple products to transmit information without worrying about security issues.

Though Apple offered a solution for the technological problems, industry researchers still
warned that it would be possible for hackers to find ways around the patch. This in turn led to
comparisons between Microsoft and Apple software.

CONCLUSION

In conclusion, technological factors are one of many external factors that can affect businesses..
They can be defined as factors which relate to the presence and development of technology, on
either a local or global scale. Samsung Electronics are facing a lot of risks, such market risk and the
exchange risk; many of the unknown factors exist. In the long run, Samsung must have a
comprehensive plan to deal with these problems.

,
 APPENDIXES

1. Abstract
2. Introduction
3. Case presentation
4. Case analysis
 Issue
 Approachs
 Evaluation
 Recommendation
5. Firm in similar situation
6. Conclusion

REFERENCES

https://pestleanalysis.com/pest-analysis-of-samsung/

https://blueoceanoutsource.co.ke/international-business-environment-samsung-case-study/

http://www.shareyouressays.com/knowledge/11-reasons-to-study-international-business-
environment/114485

https://www.techradar.com/news/this-is-how-much-samsung-says-itll-lose-on-the-galaxy-
note-7-recall

https://www.thegioididong.com/tin-tuc/toan-canh-scandal-samsung-galaxy-note-7-no-tam-
biet-2016-940995

https://qz.com/892221/samsung-ssnlf-finally-explained-what-caused-the-galaxy-note-7-
explosions/

https://www.lowyat.net/2017/147018/samsung-regained-consumer-trust-galaxy-note-7/