GDB3113Z: CORPORATE COMMUNICATION
SEPTEMBER 2018
PROJECT 2: COMPANY CORPORATE COMMUNICATION PROFILING
SAMSUNG
Lecturer: MR. ABU BAKAR SEDEK BIN ABDUL JAMAK
NAME ID COURSE
SITI BALQUIS BINTI KHIDZIR 21885 ICT
TANG JOHN LOONG 21632 BIS
THAVANESHAN MARIMUTHU 24154 BIS
1
21723
NURDIYANAH BINTI ISMIR ICT
2
TABLE OF CONTENTS
SUMMARY.............................................................................................................................................2
INTRODUCTION.....................................................................................................................................3
A) COMPANY PROFILE........................................................................................................................4
B) ORGANIZATIONAL STRUCTURE......................................................................................................5
C) FUNCTION AND ROLES OF CORPORATE COMMUNICATION..........................................................6
D) CURRENT TREND............................................................................................................................7
E) ISSUES AND CHALLENGES..............................................................................................................8
F) WAY FORWARD.............................................................................................................................9
G) MAJOR CRISIS MANAGEMENT.....................................................................................................10
i) On the Objective for This Communication...............................................................................11
ii) On the Decision What Resources Are Available.......................................................................12
iii) Diagnosing Company’s Reputation..........................................................................................13
iv) On Choosing an Appropriate Communication Channel...........................................................14
v) On Setting Company’s Corporate Reputation..........................................................................15
CONCLUSION.......................................................................................................................................17
REFERENCES........................................................................................................................................18
APPENDICES........................................................................................................................................19
1
SUMMARY
2
INTRODUCTION
The Samsung Group is a South Korea-based conglomerate company that includes a
number of subsidiaries. It's one of the largest businesses in Korea, producing nearly
one-fifth of the country’s total exports with a primary focus in the electronics, heavy
industry, construction, and defense industries. Other major subsidiaries of Samsung
include insurance, advertising, and entertainment industry businesses
With only 30,000 won ($27 USD), Lee Byung-chull started Samsung on March 1 in
1938, as a trading company based in Taegu, Korea. The small company of only 40
employees started as a grocery store, trading and exporting goods produced in and
around the city, like dried Korean fish and vegetables, as well as its own noodles.
The successful diversification became a growth strategy for Samsung, which rapidly
expanded into the insurance, securities, and retail business. Samsung was focused
on the redevelopment of Korea after the war with a central focus on industrialization.
Samsung entered the electronics industry in the 1960's with the formation of several
electronics focused divisions. The initial electronics divisions included Samsung
Electronics Devices, Samsung Electro-Mechanics, Samsung Corning, and Samsung
Semiconductor & Telecommunications. Samsung built their initial facilities in Suwon,
South Korea, in 1970, where they started producing black and white television sets.
Between 1972 and 1979, Samsung began selling washing machines, changed to
Samsung Petrochemical and then Samsung Heavy Industries, and by 1976, had
sold its 1 millionth B&W television.
Samsung has also continued to expand in the mobile phone market, becoming the
largest manufacturer of mobile phones in 2012. To remain a dominant manufacturer,
Samsung has earmarked $3-4 billion to upgrade their Austin Texas semiconductor
manufacturing facility.
Samsung's focus in the future is centered on five core businesses including mobile,
electronics and biopharmaceuticals. As part of its bio-pharma investment, Samsung
formed a joint venture with Biogen, investing $255 million to provide technical
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development and biopharmaceutical manufacturing capacity in South Korea.
Samsung has budgeted nearly $2 billion in additional investment to pursue their bio-
pharma growth strategy and leverage the advantages of their joint venture.
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A) COMPANY PROFILE
5
B) ORGANIZATIONAL STRUCTURE
6
C) FUNCTION AND ROLES OF CORPORATE
COMMUNICATION
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D) CURRENT TREND
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E) ISSUES AND CHALLENGES
There are three main challenges that communications professionals must grapple
with:
The instant communication made possible by smartphones and constant
connectivity.
Everyone today is an author. While news channels 20 years ago would only
broadcast professional grade footage, grainy cellphone videos have become
commonplace in the rush to break news first while crisis events play themselves out
in real-time on social media.
Personalization of news. Media consumption has become much more tailored to
individual interests. Linear TV is on its way out and people can watch what they
want, when they want and where they want through a growing choice of services.
People no longer need to read newspapers – over even visit newspaper websites –
when they can get all the information from news aggregators and social media
groups.
The ongoing issues faced by United Airlines in the US perfectly showcase how these
three trends create an explosive combination that can rapidly lead to a global
reputational crisis. From banning leggings to forcibly removing a passenger from a
plane to dead bunnies in the cargo hold, it is unlikely that any of these incidents
would have received the widespread and global attention that they did.
Likewise, Snapchat – ironically a beacon of the new media landscape which so
recently completed its initial public offering (IPO) – is facing a global crisis with the
#boycottSnapchat hashtag after its chief executive allegedly said he didn’t want the
company to expand into “poor” countries such as India and Spain.
However, it is not just in times of crisis that organizations need to take the new
information landscape into account. Rather, new technology must be integral to
communications strategies with activities and campaigns built around new ways in
which the world communicates.
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Samsung has had a number of brand-damaging challenges in recent months, such
as permanently canceling production of its Galaxy Note 7 mobile phone in October
after reports that the product's battery was catching on fire. Even in Malaysia,
Samsung Note 7 is strictly restricted in airport. That same month, the beleaguered
brand forecast a $5.3 billion profit hit associated with the recall and termination of the
Note 7 device. This followed on the heels of reports in September that certain
Samsung washing machines were exploding.
Besides that, from its brand issues, Samsung faced scrutiny among industry
professionals and the media for its crisis communications response tactics, which
were viewed as non-transparent, slow and vague, especially for a technology
company.
Moreover, the brand canceled a panel at the Association of National Advertisers'
2016 Masters of Marketing conference in October in which Pio Schunker, senior VP-
global head of brand integrated marketing, was slotted to give a speech. The
discussion was supposed to be about how to tell a brand's story in today's
challenging marketing landscape.
Samsung face many challenges since they diversified in various business. The
electronics giant also makes military hardware, apartments, ships and operates a
Korean amusement park! Imagine how complicated it would be if you were asked to
compose a Boston Matrix for Samsung's entire product or business unit portfolio!
The business currently has around 350,000 employees and in 2011 reported
revenues of $220 billion and economists estimate that Samsung's revenues account
for about 20% of the value of South Korea's economy
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F) WAY FORWARD
1980 to Present
In 1980, Samsung entered the telecommunications hardware industry with the
purchase of Hanguk Jenja Tongsin. Initially building telephone switchboards,
Samsung expanded into telephone and fax systems which eventually shifted to
mobile phone manufacturing.
The mobile phone business was grouped together with Samsung Electronics
which began to invest heavily in research and development throughout the 1980's.
During this time Samsung Electronics expanded to Portugal, New York, Tokyo,
England, and Austin, Texas.
In 1987 with the death of Lee Byung-chull, the Samsung group was separated
into four business groups leaving the Samsung Group with electronics, engineering,
construction, and most high-tech products. Retail, food, chemicals, logistics,
entertainment, paper, and telecom were spun out among the Shinsegae Group, CJ
Group, and Hansol Group.
Samsung developed as a global company all through the 1990's. The
development division of Samsung anchored a few prominent development ventures,
including one of the Petronas Towers in Malaysia, Taipei 101 in Taiwan and the half-
mile tall Burj Khalifa Tower in the UAE. Samsung 's designing division additionally
incorporates Samsung Techwin, an aviation maker that produces flying machine
motors and gas turbines and also providing parts utilized in fly motors on Boeing and
Airbus airplane.
In 1993, Samsung started to concentrate on three businesses — hardware,
building, and synthetic compounds. The rearrangement included auctioning off ten
backups and cutting back. With a recharged concentration in hardware, Samsung
put resources into LCD innovation, turning into the biggest maker of LCD boards on
the planet by 2005.
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Sony banded together with Samsung in 2006 to build up a steady supply of
LCD boards for the two organizations, which had been an expanding issue for Sony,
which had not put resources into huge LCD boards. While the organization was
almost a 50-50 split, Samsung claimed one offer more than Sony, giving them
authority over the assembling. Toward the finish of 2011, Samsung purchased
Sony's stake in the association and took full control.
Samsung's focus in the future is centered on five core businesses including
mobile, electronics and biopharmaceuticals. As part of its bio-pharma investment,
Samsung formed a joint venture with Biogen, investing $255 million to provide
technical development and biopharmaceutical manufacturing capacity in South
Korea. Samsung has budgeted nearly $2 billion in additional investment to pursue
their bio-pharma growth strategy and leverage the advantages of their joint venture.
Samsung has also continued to expand in the mobile phone market,
becoming the largest manufacturer of mobile phones in 2012. To remain a dominant
manufacturer, Samsung has earmarked $3-4 billion to upgrade their Austin Texas
semiconductor manufacturing facility.
Samsung announced the Gear VR in September 2014, which is a virtual
reality device developed for use with the Galaxy Note 4. Also in 2014, Samsung
announced that they would begin selling fiber optics to glass manufacturer Corning
Inc.
By 2015, Samsung had more US patents approved than any other company, being
granted over 7,500 utility patents before the end of the year. Samsung released a
fitness smartwatch in 2016 called Gear Fit 2, as well as wireless earbuds called Gear
Icon X. By the end of the year, the Gear G3 smartwatch was announced. In late
2017, the company continued to release products: The Galaxy Note 8 was a
particular triumph for the company, which had struggled with manufacturing issues
during the release of the Galaxy Note 7.
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G) MAJOR CRISIS MANAGEMENT
Figure 1 Article of the crisis on the news
Figure 2 Article details
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i) On the Objective for This Communication
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ii) On the Decision What Resources Are Available
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iii) Diagnosing Company’s Reputation
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iv) On Choosing an Appropriate Communication Channel
The crisis regarding Samsung Galaxy Note 7 exploded was not only occur in
Malaysia but it also affects the other user of the smart phone from other countries
too. This problem occurs a month after the smart phone has been released where
there are certain victims affected with it. In Malaysia, one of the smart phone user
has made a post on Facebook regarding how the phone exploded when he was
driving with his wife back home which gives warning and alert the other users about
how dangerous the phone is if they are not alert with the current condition. Based on
the post that has been spread throughout the country, most of the users able to be
aware on the danger of the smart phone and take appropriate measure to ensure
that the phone does not explode without their observation.
After there are several cases on the explosion of the smart phone, Samsung has
taken an appropriate measure to recall back the product due to the faulty on the
batteries that overheated and exploded. The product recall has been a success
where there are 2 million devices that has been recall after a few months and the
product has been discontinued to ensure that there are no other users affected. The
company claimed that there are flaws in the battery design and manufacturing that
caused the crisis to occur. Samsung has made the achievement to recall 96% of the
product from the users globally.
Recalling a product is never easy however, Samsung has made it possible by using
an appropriate communication channel with the users. The first communication
channel used are the media where Samsung stated that their goal is to achieve
100% total recall on the product. They have been using media because it is the
widest communication channel that can be used to connect and communicate with
the other users. Other than using media, Samsung has been using the other means
of communication by using the first digital recalls where they have been sending text
messages and emails to communicate on the recall. This method has been used to
ensure the user are aware with the recall that has been made because it will be
dangerous for the user to the phone since it can easily explode anytime.
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Other than using the media and digital recall, Samsung also take initiative to
increase the speed of returning all the units by working with the other telecom
carriers on issuing a software update that would help to disable the smart phone’s
charging ability which would lead to render it as a useless phone. All the service
provider also agreed to distribute the update on diminishing the device charging
because it was a safety issue. Samsung employees team has been established to
help collecting the phones from all the consumers at the airport since the
Department of Transportation has banned Samsung Note 7 on the airplanes. The
goals on recalling 100% of the product has been achieved since all the initiatives
taken by Samsung is a success. Therefore, Samsung has used the appropriate
communication channel to solve the crisis that occur since most of the users are
aware on the crisis and able to cooperate with the company to solve it.
v) On Setting Company’s Corporate Reputation
The crisis on Samsung Note 7 explosion has been a big issue in the media
especially the smart phone fans since it involves with the customer’s safety. In order
to ensure that their corporate reputation maintained, they have been taking
appropriate measure to clear it back and regain their customer reputation back.
Samsung started to take action by identifying the root cause of the issue with the
Note 7 and apply it to the future product design. They have taken initiatives to make
a month-long investigation to know what went wrong with the Note 7 phone. They
have been building a test lab to find the root cause of the Note 7 issues. After the
crisis occur and the product recall has been made, Samsung started to build a new
test lab that are staffed with 700 researchers, 200,000 devices and 30,000 batteries
to make an attempt on replicating the cause of the fires on the phone. This lab has
been used to test the whole device including areas such as the role of wired and
wireless charging which also involve the fast charging and normal charging mode.
The test also takes into account by testing it on the water resistance with and without
the back cover to know the cause of the explosion.
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Other than that, Samsung also make a test on the other device features such as the
UCB-C charger, its Iris scanner and make evaluation on the software and algorithm
that are tied to the wireless charging. Furthermore, a test on how the third-party
application that impact the phone also has been take into account to find the cause
of the explosion. After a month of doing test to find the cause, Samsung has
concluded that the cause of the phone explosion is the battery manufacturing issue.
In short, there are flaws on batteries from two different manufacturers where the
principal root cause of the first manufacturer’s product was negative electrode
deflections and the second manufacturer’s product suffered from abnormal ultrasonic
welding burrs. These problems occur because a small subset of batteries could
overheat and potentially catch fire.
In order to build back the company reputation, Samsung has created battery
advisory group and designs 8-point battery safety system that includes leaders from
various universities and specialized consultants. They also include a new quality
assurance process that both Samsung and its component manufacturers need to
follow where they implemented a multi-layer safety measures protocol at the product
planning and a new 8-point battery safety system. All the learnings and processing
for testing Lithium Ion batteries that has been made by Samsung will be contributed
to various global standardization bodies which the goodwill act will help to ensure
that the other smartphone vendors can request the same inspections to ensure that
it is safe to proceed with. After taking appropriate measure to ensure that their
product is safe, they have made an explanation to the users and implement a safer
method to produce a new quality product to the customer and able to gain back the
customer trust by producing a high-quality product to the users. Samsung also used
the marketing release campaign to emphasize that next phone produced was the
safest and the most innovative phone that the company had ever produced to firmly
trying on putting the Note 7 crisis behind them. Samsung has been handling the
crisis effectively and the release of an excellent new flagship phone had set
favourable conditions for Samsung’s recovery.
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CONCLUSION
Samsung is an international company that has been operating for the past few years
with most of their product has been penetrated to numerous country market from all
over the world. It also has been one of the largest smartphone maker where it has
been recognised globally as an industry leader in technology and now ranked as a
top 10 global brand around the world. Samsung is a company that emphasize on the
importance of corporate communication between all the parties involved to ensure
that they are able to serve their best to the customers around the world.
The crisis regarding Note 7 that explode on the hand of the user occurred on August
2016 has given a big impact to the company where they have been facing 30%
profits dropped by the cost of the recall and resulting on the drop-in sales caused by
erosion of confidence in the brand. Samsung has been taken a measurable and
appropriate step to ensure that the crisis they faced able to be solved. Samsung also
able to manage the short and medium-term impact on the crisis well by recalling the
S7 Note which shows clear leadership and communicating in a transparent and
honest manner where lead them to an impressive recovery in 2017. The crisis faced
also made Samsung to made change on the way it approached when releasing new
phone models. The way Samsung respond promptly to the short and medium-term
aspects of the crisis and adjust their strategy to overcome their initial pitfalls, identify
and address its failing has help to enhance their business resilience for the future.
The steps that has been taken by Samsung to solve the issue shows that they are
very serious on the company corporate communication strategy that helps the
company stay high and strong in the industry.
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REFERENCES
https://www.samsung.com/my/aboutsamsung/company/history/
https://www.forbes.com/sites/nvidia/2018/11/21/ai-innovators-radiology-
startup-puts-the-power-of-ai-in-the-hands-of-physicians/#7164fa6b1f79
https://www.bloomberg.com/research/stocks/private/snapshot.asp?
privcapid=30350941
https://instinctif.com/insights/crisis-recovery-samsung-18-months-explosive-
s7-note/
https://www.washingtonpost.com/business/how-samsung-moved-beyond-its-
exploding-phones/2018/02/23/5675632c-182f-11e8-b681-
2d4d462a1921_story.html?noredirect=on&utm_term=.612c06772c80
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APPENDICES
Company Official Web Page
Company Products
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Article on Samsung Crisis
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