When several Samsung Galaxy Note $7$ Smartphone spontaneously exploded last August, the South Korean company

assigned hundreds of employees to test the device and diagnose the issue as quickly as possible. None were able to

get a phone to explode. Samsung's engineers, on a tight deadline, initially concluded that the defect was caused by

faulty batteries from one of the company's suppliers. Samsung, which announced a recall of the Note $7$ devices in

September, decided to continue shipping new Galaxy Note $7$s containing batteries from a different supplier.

The solution failed. Shortly after Samsung began delivering replacement devices to customers, reports surfaced that

some of those were blowing up too. Company engineers went back to the drawing board again to figure out the

problem, according to a person briefed on the test process who spoke on the condition of anonymity because the

internal workings were confidential.

Samsung has received at least $92$ reports of Note $7$ batteries overheating in the United States, with $26$ reports of burns

and $55$ reports of property damage, according to information posted by the U$.$S$.$ Consumer Product Safety

Commission. The agency is now working on a potential recall of the replacement Note $7$s$.$

On Tuesday, even before Samsung had announced it was ceasing production of the Galaxy Note $7,$ its South Korea$-$

traded shares fell more than $8$ per cent, its biggest daily drop since $2008,$ knocking $US$17$ billion off the company's

market value. Strategy Analytics, a research firm, had earlier estimated that Samsung could lose more than $US$10$

Page $2$ of $3$

billion because of the phone's troubles. Samsung's Smartphone business also helps its other divisions by buying their

computer chips and panel screens.

More worrisome is how people may lose trust in the Samsung brand. An editorial in South Korea's largest newspaper,

the Chosun Ilbo, said: "You cannot really calculate the loss of consumer trust in money." It said that Samsung must

realize that it "didn't take many years for Nokia to tumble from its position as the world's top cellophane maker."

The Galaxy Note $7$ was one of the most ambitious products Samsung had begun marketing under the leadership of

its vice chairman, Lee Jae$-$yong, who took the helm of the country's largest family$-$controlled conglomerate, or

chaebol, after his father, Lee Kun$-$hee, the chairman, became ill in $2014.$ The senior Lee, who has not been seen in

public since, famously burned a pile of $150,000$ defective Samsung phones $21$ years ago to demonstrate the company's

commitment to quality.

The Galaxy Note $7$ was released in August, largely to acclaim from reviewers. In the month before its rollout,

Samsung had hundreds of "beta testers" using early versions of the units,

including third$-$party testers like its carrier partners AT&T and Verizon.

None identified a problem that might cause phones to explode, according

to the person briefed on the testing process.

Samsung's chief Smartphone rival, Apple, announced new iPhones last

month. Samsung's fight to compete with Apple by cramming increasingly

sophisticated features into the device may not have helped. Industry

experts are inspecting Samsung's supply chain to see whether the rush to

market caused technical problems or led to corners being cut.

Q$1.$ In recent weeks many airways and courier companies published warnings about using or recharging

Samsung Note $7$ onboard their aircrafts. How do you see this action affecting consumer reactions to the

brand and the way it is marketed. Explain your answer in light of the customer based brand equity.

Q$2.$ How do you see Samsung sources of brand equity in terms of awareness and Image affected by this

incident and how should Samsung try to bridge for a better future for their Galaxy Note brand.

How to Deal with a Case

A case study analysis requires you to investigate a business problem, examine the alternative solutions,

and propose the most effective solution or extract a key learning, using the supporting evidence presented

in the case.

Before you begin writing, follow these guidelines to help you prepare and understand the case better:

$$ Read the case well and take notes, or highlights to relevant facts and try to underline key issues

$$ Define the central issues in the case $($Problem Statement$)$

$$ You may refer here to the respective question it may be of help

$$ Often it makes sense to Organize the problem statement in a hierarchical way:

$$ Identify the single most Over$-$Riding Issues

$$ Then spot any additional sub$-$issues, subsidiary to the main over$-$riding one

$$ When dealing with them deal with the most important first

$$ Identify Possible Root$-$Causes for the information provided

$$ You need to figure out and define the Firm's strategic goals and objectives

$$ Now you may be able to identify key external & internal constraints

$$ Try to list all Possible Relevant Alternatives that apply within the constraints

$$ Select the Best relevant alternative and state why it is the Best