What it is: Samsung is refusing to pay for damages caused by their exploding Galaxy Note 7 smartphones.
In 1982, Tylenol faced a problem. An unknown suspect slipped cyanide into several Tylenol packages in Chicago, killing seven people. Although Tylenol itself was safe, this poisoning of their products tarnished the Tylenol brand and made people wary of buying Tylenol at all.
The manufacturer of Tylenol, John & Johnson, took immediate responsibility. Rather than blame outside circumstances that were beyond their control, Johnson & Johnson immediately recalled all Tylenol packages following a principle of putting consumer safety first above corporate profits. The company then re-introduced Tylenol with tamper-resistant packaging along with steep discounts to encourage people to buy and trust Tylenol once more.
Because of John son & Johnson’s immediate and swift action to take full responsibility for the crisis, even though it wasn’t their fault, consumers rewarded the company by accepting Tylenol once more. Today, Tylenol remains one of the leading pain-killers on the market and the way Johnson & Johnson handled the crisis has been considered a textbook case for years on how to handle a crisis.
Now look at the way Samsung is handling their exploding Galaxy Note 7 smartphones. First they delayed recalling the products. Second, they never found the cause of the faulty products so they assumed it was the battery. When they gave out replacement units, those replacement units also started exploding. Even worse, Samsung’s exploding Galaxy Note 7 smartphones not only torched themselves, but often burned down people’s cars and houses as well.
To make matters worse, Samsung is continuing to delay and deny compensation to innocent victims. Although Samsung finally offered a full recall of their devices, the process remains confusing to customers. For those customers who lost property (cars or houses) due to exploding Galaxy Note 7 devices, Samsung is simply doing nothing at all.
There have only been a handful of cases of severe property damage from exploding Galaxy Note 7 devices, so the cost to take full responsibility and offer compensation would be minimal, yet Samsung refuses to do even that minimal effort. By continuing to confuse and delay, Samsung risks poisoning the entire world against not only their smartphones but their brand name as well.
By refusing to take responsibility and protect corporate profits over consumer safety, Samsung risks becoming a textbook case of what not to do in business. In exchange for the minor cost of compensating victims of their products, Samsung risks long-term damage to the entire company. How many people who bought Galaxy Note 7 smartphones will ever buy another Samsung smartphone again? How many of these people will tell their friends the problems of dealing with Samsung? How many of these people will even refuse to buy anything related to the Samsung name again whether it’s buying a television set, a dishwasher, or a tablet?
Instead of putting people first and profits second, Samsung its putting profits first and ignoring customers altogether. That’s a classic recipe for disaster. When you ignore your customers, they’ll start ignoring you. Expect Samsung’s reputation to take a huge hit that they’ll likely never recover from simply due to their own arrogance and stubbornness in dealing with this crisis intelligently.
No one’s blaming Samsung for exploding smartphones. What people are blaming Samsung for is their response to this crisis. Samsung is simply poisoning their own future in an attempt to protect their own profits. Is this a company you would trust in the future? For many people the answer is no.