Is it all over for Samsung after Note 7 Crisis?
- Fariha Khan
- November 7, 2016
While things do not look very positive Samsung at the moment, the destiny of the company is certainly not dark. Within no time after the launch of Galaxy Note 7, the company had to recall over 3 million devices it had sold. Overheating and exploding batteries were two of the causes that lead Samsung into trouble. The firm then stopped the production of the smartphones and scrapped the line altogether. Present estimates show the recall’s cost will surpass $6 billion. Even if the financial loss is mendable, the damage it did to the brand is something that is more serious. Being one of the leading smartphone brands in the world today, Samsung is the sweetheart of millions of users around the planet. Their hearts would be bleeding and minds perplexed seeing the recent Note 7 crisis. But will it all stop them from their loyalty towards the brand?
Red flags raised for Samsung by analysts
A number of forecasters have given red alert to the company expressing their concern that Samsung’s opponents will happily win a large chunk of its customers after the fire issues. According to some, as a result of Samsung’s explosion problem with the flagship line, Apple may gain 5–7 million new iPhone customers. Well, well. The company really seems to be in deep trouble… how should Samsung handle the whole situation and what should the firm do to save its repute after the Note 7 crisis?
Unlike general perception, the future of Samsung is not as bleak as it may appear. There are a number of reasons why the company will soon recover from the Note 7 crisis.
A huge loyal client base
Firstly, Samsung has a loyal base of existing customers. We have seen such things in the best as well. Back in 2009 and 2010, Toyota recalled over 8 million vehicles around the world after finding defects with scores of driver injuries and fatalities. Just as with Samsung, experts prophesied long-term damage to the brand but it did not actually happened. Surveys of Toyota owners in 2010 proved something else. Generally, most of the users were highly satisfied with their cars. Regardless of the recall, the showed much likeness for the brand. Here is a similar story… Samsung sold more than 78 million smartphones in the second quarter of 2016. And recent indications are also positive. When customers were given the choice of get another Note 7 or have their refund, 90% opted for another Note 7! This customer base will put the Note 7 crisis behind it very rapidly.
The Note 7 crisis is restricted to just one Samsung smartphone line
While the cause behind the explosion issues is still not known, it does not extend to other smartphones by the company, which is real good news. Samsung has been vigorous in explaining this dividing line to its users and studies show that consumers are sympathetic to such assertions after product recalls. In other words, they tend to return to support the company just as it used to prior to the crisis.
Geographically identified companies mostly bounce back fast
Another reason why we are sure that after Note 7 crisis, Samsung will recover without much trouble is that geographically identified brands always rebound back fast. The company has support of South Korean consumers – they see the company as a source of national pride. Local customers tend to forgive without much problem. They are ready to give the brand another chance to prove its worth. Take Volkswagen as an example. Just after couple of months following the emissions scandal broke (2015), German consumers were all prepared to give the firm another chance. A survey showed that 65% of them held that Volkswagen still made exceptional cars and that the scandal was immoderate. And interestingly, the firm did return to lucrativeness within months.
Good luck Samsung!
But it does not mean Samsung can get away with anything at all. The company cannot ignore Note 7 crisis and must learn from the past mistakes if it really wants to secure its future. If such instances occur in future too and recalls spread to other products of the company, all chances of its survival will fade. But at the moment, the company quite stable and positive about its future. Let us hope it continues to provide the world with the best products, both smartphones and its electronics - Good luck Samsung!