Samsung is currently in a situation where it has to navigate its brand through continuous negative publicity. Just recently, the company’s involvement in a bribery case that resulted in the impeachment of South Korean President Park Geun-hye has led to the arrest of Jay Y. Lee, vice chairman of Samsung Electronics. This news, on top of exploding phones and malfunctioning washing machines adds another blight to South Korea’s biggest brand. However, despite Samsung being overwhelmed with scandal after scandal, it continues to recover. Even now, two Samsung executives have taken responsibility for the latest scandal and have offered to resign from their positions. Thus giving Samsung a little reprieve from their latest issue to their brand. Furthermore, Samsung share in the Asian market continues to grow. How is it that Samsung continues to withstand such failures and negative publicity?
To begin with, Samsung is quick to admit fault and beg forgiveness. For whatever reason, Confucius ideals, nationalism, pride, Samsung does not try to hide its failures. They try to remedy the problem immediately, such as attempting to replace phones once they discovered their phones were exploding. Once the backup phones started exploding, Samsung made an immediately recall and offered full refunds. It is important to note that for a lot of companies, this would a deathblow to the brand. However, Samsung’s product range is extremely diverse, from producing military equipment to owning sports clubs. Their integration across all spectrums allows them to continue prospering despite failure in one chain of their brands.
It is also important that Samsung is one the historic “chaebols” in South Korea. A chaebol is a large business conglomerate, usually family owned, and these business have historic ties to the South Korean government going back to South Korean president Park Chung-hee. In essence, chaebols such as Samsung, of which it is the most prominent, area representation of South Korean success and are often a source of nationalistic pride. They are not supposed to fail. They are the embodiment of South Korean industrialization and played a key role in developing new industries, markets, and export production that turned South Korea into an economic powerhouse. In fact, during the Asian Financial Crisis, chaebols were able to roll over loan after loan, as they were deemed “too big to fail.” Even despite recent regulation, chaebols still act in an almost monopolistic manner.
Needles to say, not all companies can have such government support, but the growth of Samsung and its diverse integration is a blueprint for how a business should expand and prepare for eventual failures. Despite their phone failures, they are still one of the biggest brands in the world, and they refuse to be held back. They have continued their R&D and are already preparing to launch a new phone that has already begun generating considerable buzz the smartphone arena. In the long run, it seems that Samsung will come out no worse for wear… just as they always have.