Samsung and the ongoing Note 7 debacle

24

October

2016

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The Galaxy Note 7, the successor to the Galaxy Note 5, was supposed to be the flagship model of Samsung. Unfortunately for Samsung, it didn’t go as planned. The Galaxy Note 7, an Android phablet smartphone, was officially released on 19 August 2016. On 11 October 2016, after a series of events, the Galaxy Note 7 was permanently discontinued. The problems were due to a non-replaceable battery that was prone to explode.
To clarify, here is a brief overview of events leading up to the discontinuation of the production:

Aug. 19 – Official release Galaxy Note 7.
Aug. 24 – First report Note 7 explosion in South Korea.
Sept. 2 – Global recall of 2.5 million Note 7 phones.
Sept. 9 – U.S. Consumer Product Safety Commission urges Galaxy Note 7 users to stop using their phone.
Sept. 15 – Recall of about 1 million Note 7 phones.
Sept. 16 – First customer sues Samsung for burns from Note 7 explosion.
Sept. 19 – Note 7 exchange program started in South Korea
Sept. 29 – Statement saying more than 1 million Note 7’s in use with new battery.
Oct. 6 – Evacuation of a Southwest Airlines plane due to smoke from a Note 7 device on board.
Oct. 9 – Several providers halt issuing new Galaxy Note 7 smartphones due to safety concerns.
Oct. 11 – Sales and production permanently halted by Samsung, customers are asked to stop using the Note 7
Oct. 14 – Expected operating profit hit of around $3 billion for Q4 2016, Q1 2017 combined due to the Note 7’s discontinuation.

Recently, Samsung provided their Note 7 customers with a fireproof box to send their phone back. These boxes will not be shipped by plane, as that is considered to be too dangerous. Next to that, special gloves are provided to put the phone safely in the box. You can imagine what that does to the Samsung brand image. The intended solution of replacing the batteries with new batteries from a different supplier did not work. These new batteries exploded as well. Three customers have sued Samsung because of the smartphone fires. Samsung has stated that it is thinking about releasing only one flagship model per year, to prevent serious issues like this.

Moreover, recalling of the phablet smartphones is an environmental disaster. In 2013 it was stated that the construction of one smartphone needs about 75 kilograms of raw materials. As Samsung wants to prevent Note 7’s from staying on the market, the phones will not be refurbished. Currently, companies are hardly able to recycle smartphones. There are almost no parts in the Note 7 that can be recycled, including the material cobalt which is known to often be mined by child slaves.

Overall, it can be stated that due to the combination of an inadequate first solution, financial and environmental consequences, and the effect on the brand image this is a real debacle for Samsung. Essentially, discontinuing the production and sales of the supposed to be flagship model comes through as giving up.
Sources:

http://www.rtlz.nl/tech/samsung-geeft-klanten-brandveilige-doos-om-note-7-op-te-sturen

http://www.rtlz.nl/tech/terugroepactie-note-7-is-ramp-voor-het-milieu

http://www.reuters.com/article/us-samsung-elec-smartphones-timeline-idUSKCN12J03Z?il=0

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Digital transformation project – Movares – Group 55

24

October

2016

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In this digital transformation project, we analyzed Movares Nederland B.V. and its current use of an IT application. Movares is an engineering- and consulting company headquartered in Utrecht with approximately 1100 FTE and four regional offices. It was founded in 1995, when it divided from Nederlandse Spoorwegen. Previously focused mostly on the rail industry, today, Movares is involved in a much broader sense. They are involved in projects and advisory in mobility, heavy rail, light rail, environmental planning, water and energy. Their projects include: HSL-Zuid, Betuweroute, Spoorzone Delft.

Movares is involved in big and small civil engineering projects, consulting, and they conduct research. They help building a variety of civil engineering structures like rail stations and bridges. When engineering or consulting, amenities, usefulness, future value, and sustainability play an important role for Movares. Their motto says ‘We connect’. Movares has two divisions: Rail and Ruimte, Mobiliteit & Infra. Problem

One of their IT problems is their corporate identity, and especially the Microsoft office system Movares is currently using.  Movares currently uses a very outdated version of Microsoft office and because the system is so outdated Microsoft will end delivering security for the program on 10-10-2017, also security is also a current problem. The current Microsoft office system is not compatible with versions of the customers. Customers can only open reports when they deactivate their security mode. The maintenance costs are high due outdated programming language and tricks programmers must use in order to make the system compatible with other systems. Lastly, the integration with other programs is also a problem. The engineers work with the latest technologies and programs which cannot be integrated with the old Microsoft office system

 

To overcome this challenge we suggest that Movares new corporate identity will use augmented reality (AR) technology.  AR is the integration of digital information with the user’s environment in real time. Unlike virtual reality, which creates a totally artificial environment, augmented reality uses the existing environment and overlays new information on top of it. Augmented reality makes it possible to turn a 50-page document into a virtual experience. For Movares this is an opportunity to make the reports look more professional and understandable, since a lot of stakeholders don’t have the same technical background as the engineers of Movares. AR makes it possible to easier understand difficult processes simply because the visualization of a certain process explains ‘more than a thousand words’.

 

The new corporate identity with AR technology will be a good fit with the current business model. One of the core businesses of Movares is consulting, as a consultant you deliver solutions or advise other companies. In the market where Movares is operating they often advise on high-tech solutions for complex problems. Delivering the reports in outdated software is, therefore, a weakness. If Movares updates to the new technology this would better fit with their motto (‘we connect’) and strategy. The implementation of AR technology can result in a competitive advantage, due to a richer user experience, and is in line with their goal to be leading in the field of transport civil engineering.

 

We recommend Movares to start with outsourcing 3 or 4 projects. If the AR technique shows positive results Movares can do a thorough investigation on the costs and opportunities of setting up their own AR unit. For the upcoming years Movares can benefit from the new Microsoft office by meeting all the requirements, and by using AR the stakeholder will have a better understanding of the projects.

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How Amazon wants to use bundling to enter European internet service provider industry

22

October

2016

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Amazon, the largest internet-based retailer in the world, might want to enter the European internet service provider industry. They aim to do this by bundling internet access with Prime Video, their video streaming service. From Amazon’s perspective, this step makes sense because it is believed they are currently planning to introduce Prime Video in various European countries, next to entering the European internet service provider industry. Next to that, it looks like they want to compete with cable companies who provide both internet service and media streaming. Amazon recently bought the rights to broadcast a number of series in the Netherlands.

Amazon currently has seven separate retail websites for Europe, including the UK and the Netherlands. Bundling their video streaming service with internet access is a logical step, as the products work together and it offers the opportunity to introduce the products simultaneously in the European countries. Offering internet service to European customers fits their overall product portfolio, and increases the Amazon ecology.

As the media streaming industry is getting more and more competitive, price will be an increasingly important factor. Currently, depending on location, the price of a Netflix subscription can be about twice the price of a Prime Video subscription. This may contribute to a possible reduction of the Netflix market share. An important factor in attracting customers is the production of ‘Original’ series, series only available on the platform that owns the series. The Grand Tour, the coming successor of the widely popular Top Gear, is an example of an Amazon Original series which will undoubtedly attract former Top Gear enthusiasts.

We can expect to see greater European presence from Amazon in the future, entering the media streaming and internet industry simultaneously. Offering internet service will be an addition to the Amazon ecology, making the platform more complete for their customers. In an increasingly competitive media streaming market, product differentiation by offering ‘Original’ series will be very important.

Sources:
http://www.nu.nl/internet/4328976/amazon-brengt-filmstreamingdienst-binnenkort-nederland.html
http://www.rtlz.nl/tech/amazon-wil-in-europa-internetprovider-worden

Amazon could become an internet service provider in Europe

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