University of Cebu - Banilad Campus

College of Business Administration and Accountancy

S.Y. 2019 - 2020 | 1st Semester

Galaxy Note 7: The Phenomenal Explosion Made by Samsung

(A Case Study)

In partial fulfillment of the Midterm Requirement in BA328

(Operations Management and Total Quality Management)

Submitted by:

Conde, Angela

Ranario, Cheresse

Cabatingan, Cendy

Lanaban, Christine Joy

Cantano, Chenny Marie

Submitted to:

Ms. Liezyl A. Kuhail, MBA

 GALAXY NOTE 7: THE PHENOMENAL EXPLOSION MADE BY
SAMSUNG

Authors: Cendy Cabatingan Chenny Marie Cantano Angela Conde

Christine Joy Lanaban Cheresse Ranario

Institution: University of Cebu - Banilad Campus

(College of Business Administration and Accountancy)

Keywords: Samsung, Galaxy Note 7, Phone Explosion, Case Study of Samsung, Explosion while
charging

Abstract

This study was mainly focused on the phenomenal explosion issue of one of the most anticipated
brand of mobile phones which is the Samsung. This product was called the Galaxy Note 7 which was
supposedly made to beat the previous galaxy note which is the S5 that received thousands of positive
feedback from the public. Nonetheless, the plan turned into a great dilemma. It was said that the explosion
was reported exactly 20 days after it was introduced in the market. Public made a great noise because of
disappointment which caused the Samsung group to do some action. They made some research on what
must be the reason why their product keep on exploding and it turned out to be the batteries. Samsung
polish the issue though they taken it lightly. They made the noise stop and prevented to be heard
nevertheless, some of their ways is contrary to what we believe is right. After we accumulate all the
reactions, feedback, and responses of the people we reached into conclusion that fixing a problem must
really be done as soon as possible specially when we are talking about renowned companies which people
already given their trust and support. However, manipulating public for the company's image is already
out of the line.

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Introduction

The Samsung Group was the largest business group in South Korea. It is located in the city of
Seoul of the said country. This group was founded by Lee Byung-chul as a trading company before in
1938. According to Stickler (2013), most of the numerous subsidiaries and affiliated business of the
multinational conglomerate was under the "Samsung" brand. The present functioning business areas of
Samsung are consumer electronics, information technology and mobile communications, and device
solutions. Their company offers their innovative technologies, products, and design that follows with their
vision, "Inspire the World, Create the Future."

Samsung manufactures smart phones and one of its products that is highly the center of this
study is the Galaxy Note 7. In August 2016, they have released their much anticipated new "big phone"
which is the S7 Note. This S7 Note has a lot to live up to, namely competition from its rivals and the
success of its prior version the S5 Note, which was widely regarded as the best Android phone of its
generation.

Samsung had pioneered the concept of the "phablet" or big phone with the Galaxy S5 Note which
is the prior version of S7 Note. This provided consumers with a device that was packed full of high tech
features in a package that was larger than a traditionally sized smart phone, but smaller than a tablet.

The S7 Note, like the S5, was packed with the latest generation of tech and features, stealing a
march on Apple’s range with an improved camera, better screen definition, processor speed and battery
life. With all of this improved features for S7 Note, it was a blind spot at first that the only thing that
could drag the peak of the product's success is its fault on its battery - a phenomenal gadget explosion
made by Samsung in its entire history. (McAllister, 2018)

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Presentation

Samsung Galaxy Note 7 was posed to serve as the brand’s best 5.7-inch stylus wielding smart
phone on August 2016. This model of Samsung was well-received by most of the reviewers of the smart
phone upon its introduction to the market. In fact, Note 7 earned a Mashable Choice Awards. However,
the model’s popularity turned into a major crisis when reports about the phone’s explosions while
plugged in to charge arose. The first incidents of Note 7 battery explosion were reported from South
Korea and China 20 days after the device was introduced in to the market. Roots of explosion the official
investigation by Samsung stated that the explosion of the said model was due to faulty batteries that
overheated and exploded.

They also highlighted several key areas to where the phone explosions were attributed. The errors
reported were both in the design and manufacturing of the batteries. These include:

i. Insufficient insulation material within the batteries,

ii. Not enough room to safely accommodate the battery; and

iii. Welding burrs on the positive electrode resulting in penetration of the insulating tape and separator.

The report presented a clear and honest account of the problems with Samsung Galaxy Note 7
and identified a number of scenarios that could cause the batteries to self-ignite. Blame was leveled at a
battery casing that was too small and an abnormal weld spot, both of which could lead electrodes in the
battery to compress resulting in a short circuit. Lithium-ion batteries, like the ones found in smart phones
and laptops, have an ill reputation to catch fire in the past.

According to Loveridge et al. (2018), lithium-ion cell designs, component integrity, and
manufacturing processes all have critical influence on the safety of Lithium-ion batteries. Any internal
defective features that induce a short circuit can trigger a thermal runaway: a cascade of reactions, leading
to a device fire. A report showed that laptops from Sony had gone through an identical flaming bout in the
year 2014. The impact to the Samsung’s reign this battery design and manufacturing flaw has put
Samsung into crisis. Several complaints and disappointments by a lot of customers were widely shown
from different social media sites.

The Consumer Product Safety Commission (CPSC), which is tasked with promoting the safety of
consumer products, developing uniform safety standards, and conducting research into product-related
illness and injury, has made Samsung's recall official by publishing a report that not only confirmed the

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 full number of incidents reported and that the lithium-ion battery in the Note 7 can overheat and
catch fire, but also the Note 7 posed a serious burn hazard to consumers.

According to the CPSC, Samsung has "received 92 reports of the batteries overheating in the US,
including 26 reports of burns and 55 reports of property damage, including fires in cars and a garage". As
of 1 September, Samsung has only acknowledged 35 of these reported incidents. Still, the CPSC is
concerned enough to issue a formal recall, in which it is asking US consumers to return more than 1
million purchased units.

Here are some photos to justify the case of Samsung’s crisis:

Figure 1. Phone explosion from a customer in South Korea.

Figure 2. Phone exploded while charging inside the car for one hour.

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 Figure 3. Skin burned after phone overheats inside his pocket.

Moreover, Department of Transportation (DOT) banned the Note 7 on many airlines in which
during every preflight safety briefing, Samsung was named and ashamed further damaging the brand and
eroding consumer confidence.

Figure 4. Notice from public transportation in Florida.

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Outcomes

According to Fontella, C. (2019), a business crisis occurs when an unexpected problem puts the
stability of a company or organization at risk. These dilemmas can either originate internally or they can
be brought on by external influences. In Samsung’s case, crisis originate internally due to its faulty
battery. Samsung never planned their mistakes, they just happen and they happen at worst possible time.
While no one wants to anticipate failure, it's important that every businesses is ready to handle these
crises should they ever occur. In this study it is recommended that Samsung should:

 Cease to publicize and fix the product. As we have gathered the data, Samsung never stop
advertising while fixing the issue. That’s why the issue were spread all throughout the country.
Samsung should have make some notice to stop the selling for the meantime and fix the product.
Moreover, Samsung should cease to publicize their product in order for the consumers to be safe and
damage won’t cost the society at large.

 Respond efficiently. No matter what your company is facing or situation that you are in, always
remember that to respond efficiently to your consumers. Subsequently, customers are the lifeblood
of your business. Samsung’s retort was dilatory and impracticable.

 Thorough test before launching. In this case, if Samsung run an intensive test before publishing
then, their sales and production will not be halted. Furthermore, quality should always prevail over
quantity.

 Never exploit the data especially the public. According to Fu, T. (2017), Samsung eliminated some
explosion posts on social media in China and South Korea and it is hard to believe. Considering that
Samsung has a good reputation since they were established. Never use your advantage if your
company is in dilemma. Otherwise, people will distrust your company.

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Conclusions

Gadgets are one of the most common tool that people use nowadays for their pleasure, and one of
these gadgets includes Samsung Galaxy Note 7. However, an issue occurred in 2016 that this phone has
exploded. It made a lot of Samsung users get disappointed which results in anger, loss of trust, as well as
loss of loyal consumers. This incident affects the entire sales of Samsung Company during that year and
causes a sudden downfall. With regards to this issue, we came up with the conclusion that services should
not been taken lightly and it should have a proportionate effort between the production aspect of the
product as well. Furthermore, the company should not jeopardize the production for maintaining their
competitive side and maintaining their sales because it will cost the society as a whole.

A manufacturer should also pay attention to after-sales services. Also, efficient communication
with consumers will help a company go through a crisis effectively. An appropriate compensation and
apologies are indispensable when facing a crisis. Manipulating the public by deleting posts and
prohibiting free speech will lead to a worse situation. And lastly, never ignore the clients and their
feedback, and take actions as soon as possible.

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References

Brown, A. (2016, September 20). Galaxy Note 7 owner sues Samsung after smartphone EXPLODES in
his pocket. Retrieved from https://www.express.co.uk/life-style/science-
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Epstein, Z. (2016, August 24). Photos show the aftermath of a Galaxy Note 7 that exploded while
charging. Retrieved from http://bgr.com/2016/08/24/galaxy-note-7-features-explosion-photos/
Fu, T. PDF. Retrieved from https://cfu100.expressions.syr.edu/smartlife/wp-
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