QUESTION 3

Identify the macroenvironment forces for Samsung. Briefly explain each of these forces.

passage ; Samsung, the Korean tech giant, faced a blow when news of its newly introduced premium smartphone, Galaxy Note 7 had caught fire went viral. The timing proved to be unfortunate for the brand as its rival, Apple, was taking pre-orders and making shipping arrangements for its new iPhone 7 and iPhone 7 Plus. As incidents of the Note 7 catching fire were reported in various news agencies across the globe, the company who had invested massively in marketing its brand to gain consumer trust, decided to recall all the Note7s they had sold.

The recall had huge financial implications on the company as investors became sceptical and share prices plunged 11% since 2008, causing the company US$22 billion in loss of market value. It impacted user confidence negatively, which was considered very high. Several airlines banned switching on or charging the Note 7 on board flights.

All smartphones, regardless of the brand, share many points of parity such as reliability, safety and convenience. In the case of Note 7, safety was heavily compromised as consumers were affected and had to think twice before choosing the phone. Trust takes years to build but can be shattered in the blink of an eye. Samsung urged consumers to return the Note 7 and get it replaced under the exchange program. Samsung released a press statement stating the safety of their consumers was their top priority and exchange programs were introduced in various countries including Malaysia. Although the number of incidents reported were very low, but good precautionary measures were taken and all the sales and shipments of Note 7 were stopped immediately.

Samsung took a major step in recalling the Note 7 and bore massive losses. Would the brand be able to regain consumer trust? According to BrandaAsia, Samsung should apologize to its consumers for the risk they carried with the Note 7 and explain the root cause of the Note 7 exploding. If the reason remains unknown, they should give a transparent and reliable explanation to gain back consumer trust. In the event of a recall, the most important thing is for the brand to be candid, transparent and give consumers a true picture of the situation.

Sources: Adapted from Venus, Hew, 'Galaxy Note 7 Recall: What Can Samsung Do to Regain Consumer Trust?', 13 September 2016. Retrieved 27 July 2019 from https://www.marketing-interactive.com/galaxy-note-7-recall-what-can-samsung-do-to-regain-consumer-trust/.