Mere weeks after Samsung unveiled its Galaxy Note 7, reports surfaced of the smartphone catching fire. Within a month of the device’s launch, the company recalled 2.5 million Note 7s, citing faulty batteries as the cause of the crisis.
What started as a manufacturing mishap quickly escalated into a public relations (PR) nightmare. With customers’ safety at stake, all eyes were on Samsung, which didn’t take full responsibility of the flaw for more than three months after the phone’s recall. The company’s mobile division experienced a 96 percent drop in operating profit as negative headlines continued to emerge, including airlines prohibiting passengers from bringing the phone on flights.
What happened to Samsung could happen to any company; several other brands have faced recalls. For example, Johnson & Johnson pulled its Tylenol products from shelves in 1982 after seven people died in the Chicago area, and Hasbro halted sales in 2007 of its Easy Bake Oven after reports of the toy badly burning children.