Presentation of the Samsung Note 7 and the controversy surrounding its battery problems

1. Samsung’s Note 7

2. Introduction
◎ Incident
◎ Thesis
◎ Presentation blueprint
Source: CNN

3. Background of
Samsung

4. Byung-Chull Lee
79
Countries
285
Offices
50.000+
Employees
Gyeonggi-do
(South Korea)

5. “Inspire the World,
Create the future”
- Samsung
“To inspire the world with
innovative technologies, products
and design that enrich people’s
lives and contribute to a socially
responsible, sustainable future.”
-Samsung
Mission:
Vision:

6. Samsung’s Goals
◎ Quantitative Goals
○ USD 400 billion in sales, predominantly No.1 in the global IT
industry & Global top 5
◎ Qualitative Goals
○ Innovative company
○ Respected company;
○ Top 10 world’s best workplaces
○ Creative leader building new markets
○ Global enterprise that attracts the world’s best talents

7. Company’s Values
People
Excellence
Chance
Integrity
Co-Prosperity

8. S.W.O.T Analysis

9. Strengths
● Samsung has well-established position and
influence in multiple different markets which helps
to enhance the value of the brand
● Strong capability for research and development
Weaknesses
● Heavy dependence on the Google Android platform
for software

10. Opportunities
● Strong future outlook in the market of smartphones
● Smart wearable devices market offers Samsung growth
opportunities
● Increasing demand for manufacturing services in
electronics industry
Threats
● High amounts of competition are entering into the
market, also increasing simplicity/less diversity exists
in the market
● Lower average market prices
● Foreign exchange risk

11. Outbreak of
the Issue

12. "A modest but welcome improvement over its
predecessor, offering a more ergonomic design, an
enhanced stylus, the same camera as its Galaxy S7
cousin, and some software tweaks"
Source: Times

13. Rumors Circulating
Source: Websta
13,818
15,621
17,267
38,436

14. Reports of Defective Issues
Source: nytimes, Time

15. Major incident
September 4, 2016
Source: abcNews

16. Government actions
September 8:
U.S. Federal Aviation
Administration
September 9:
U.S. Consumer Product Safety
Commission
September 15:
U.S. Consumer Product Safety
Commission
Source: Fortune, Reuters

17. Second Recall

18. Failed Replacement
2 weeks after recall...
Kentucky
BBC News

19. Immediate Actions...
October 10th
Worldwide
Recall
October 15th
Department of Transportation
Help at Airports
December 19th
CPSC- 97% Response Rate
Disabling All Phones
BBC NEWS

20. “Our Investigation”
Samsung

21. Battery
Problem
From
Supplier A

22. Battery
Problem
From
Supplier B

23. “Why It Won’t Happen Again”
Samsung

24. Learn and Share
“Share what they have learned… which will benefit the
industry and safety of all consumers” - USCPSC
The Korea Herald

25. Public Opinion
Reuters. “Galaxy Note 7 Battery Disaster Did NOT Damage Samsung's Brand in US: 91% of Users
Say They'll Stick with the Firm.” Daily Mail Online, Associated Newspapers, 21 Nov. 2016. Web.

26. Reuters. “Galaxy Note 7 Battery Disaster Did NOT Damage Samsung's Brand in US: 91% of Users
Say They'll Stick with the Firm.” Daily Mail Online, Associated Newspapers, 21 Nov. 2016. Web.
Current Users

27. #SamsungNote7

28. Financial
Highlights

29. Smartphone Marketshare
57.8
17.4
27.8
292
million
Smartphones
shipped in Q1 2016
Source: Localytics

30. Stock Market: Samsung Electronics
Sep 12: Shares plummeted 7%
Oct 7: Stock hits and
all-time high

31. Samsung Electronics' revenue
by quarter from 2011 to 2017 (in trillion KRW / billion U.S. dollars)*
Source: Samsung

32. Samsung Group Breakdown
IT and Mobile
Communications
● mobile devices
● desktops
● laptops
● digital cameras
● network
equipment
SemiconductorsDisplay
screens for
● mobile devices
● computers
● televisions
(sold by Samsung and
other manufacturers)
Consumer
Electronics
● refrigerators
● washing machines
● televisions
Source: Samsung

33. Samsung Group Profits
Source: The Atlas

34. Expected to increase

35. Recall cost Samsung
$5.3Billion
Source: Forbes, The Verge

36. Net Loss
Earned $2.2 billion less than the projected $6.6 billion in profit for Q3.
Source: Bloomberg

37. Post Crisis
Forbes.com
Earned $7.2 billion in
profit on sales of $45.8
billion.
More than a 50%
increase from Q4
2015.
Source: The Verge

38. Market Share for
Shipment
Source: Samsung

39. Stock Market: Samsung
Electronics Today
Source: Barron’s

40. Implications
Implications

41. If Samsung -- in an effort to innovate --
pushed boundaries and consciously
built a dangerous product...Should
standards be changed to better
reinforce the safety of consumers from
product fails like this?
“
”- Maria Guerra,
Electronic Design

42. Banned on Airplanes
◎ Where it’s banned
○ All U.S and Japan airlines
○ Emirates
○ Qantas airline
○ Many more
◎ Not legally required for airports
to have “no samsung note 7”
signs, it should be common
knowledge
◎ Why is it banned?
Sources: International Business Times, TradeArabia, and Wall Street Journal

43. Lithium-Ion Batteries
◎ Instrumental took apart the Note 7
○ "What we found was surprising: The design can compress the
battery even during normal operation...Any battery engineer
will tell you that it's necessary to leave some percentage of
ceiling above the battery”
◎ Most phones use lithium-ion batteries
○ All Iphones and most androids
◎ Competition of price, sleeker phones, and long battery life
Sources: Wired, Instrumental

44. Dangers
◎ Wired warning of dangers
○ “By nature, lithium-ion batteries are dangerous.”
○ Thin and porous slip of polypropylene that keeps the electrodes
from touching. If that separator is breached things get hot quickly.
○ Filled with a flammable electrolyte
◎ Post Samsung
○ Iphone smoking
○ Headphones explode on airplane
Sources: Mirror, The Verge, Wired

45. Incentive to Innovate
◎ Samsung working on revolutionary solid state battery
◎ “[Note 8’s] battery pack is the safest yet by Samsung”
◎ Stabbing Note 8 battery does not bring previous outcome
Sources: Korea Herald, I4U News

46. Conclusion
◎ Controversy
◎ Samsung’s response
◎ Financial aftermath
◎ Response of public/market/government
◎ Moving forward...

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