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In early September 2016, Samsung Electronics Co. Ltd. (Samsung), a leading manufacturer of smartphones headquartered in South Korea, released the new generation of its flagship smartphone, the Galaxy Note 7. Despite initial positive reviews and a strong market reception, just eight days later, Samsung voluntarily recalled 2.5 million of the smartphones, after receiving reports of the devices overheating and catching on fire. The problems persisted even with the replacement device, and the company decided to cease all production and sales of the Galaxy Note 7 in October 2016. Samsung faced a highly commoditized market, decreasing global demand, and increasing competition, but the company now also needed to deal with one of the biggest recalls in the history of the industry. What had gone wrong, and how could the company move forward?
The case is suitable for use in introductory business courses at both the undergraduate and MBA levels, including strategic management, marketing and operations management, and communications management. It offers students the opportunity to ·assume the decision-making position of an executive of a multinational conglomerate; ·gain exposure, at a basic level, to the diverse array of challenges during crisis management; ·understand the importance of effective communication to relevant stakeholders; ·practise management oversight on a layered issue; and ·study a recent and relevant example of a notable technological failure in recall history.