RIP Samsung Galaxy Note 7
Samsung decided this week to completely pull the plug on its Galaxy Note 7 and end the exploding phone situation less than two months after it was launched. The company is estimated to take a $10 billion hit as a result of this failed new product release. Samsung appeared to have the problem under control after its recall action in September, however smartphones that were designated as safe began catching fire in October as well. These new customer complaints led Samsung to make the final decision of permanently discontinuing the production and sale of the new Galaxy Note 7.
In a case like this, the supply chain of a company is placed under extreme scrutiny. Samsung initially believed the problem was associated with a specific battery provider. This supplier was removed from Samsung’s list, but as problems continued to surface, it became clear that the defects could not be pinned on a single player in the supplier network. It is this global network that made the tracing of the issues extremely difficult. This supply chain and quality control oversight led to plummeting stock market shares, and Samsung is bracing itself for an estimated $5 billion in profit loss. Aside from the enormous monetary impact, the company is also expected to take a big hit in market image and credibility.
Read more on Samsung’s disastrous new product release here.
More bricks, more mortar for Amazon?
A year after Amazon opened its first brick and mortar bookstore in Seattle, rumors this week suggest the retail and ecommerce behemoth may be planning an expansion into physical grocery store locations. One focus of these small stores would be on perishable items such as milk and meat. This rumored convenience store expansion would offer customers the ultimate shopping experience, including the opportunity to place orders for items on touchscreens that are not necessarily on the shopping list for that day. The items would then be delivered to customers’ homes at a later date. The stores would initially be available to Amazon Prime members only. This is a strategic decision that supports the company’s pursuit of loyalty from its current online buyers.
Brick and mortar seems to be “in” at the moment for Amazon as the company is also planning on opening more bookstores in the near future. Amazon is also expected to open over 100 “pop-up stores” in malls across the U.S. by 2017. If successful, current retailers such as Wal-Mart and Target may experience increased competitive pressure and lost market share.
Read more on Amazon’s expanding brick and mortar strategy here.
Climate Change as a leading culprit in coffee shortage?
No rain along Brazil’s “coffee belt” is threatening the world’s coffee supply. A new report suggests climate change could be to blame for a three-year drought across Brazil’s main coffee bean farms. A local farmer, Naygney Assu, reports that he sees no future in coffee farming due to the dry conditions he has experienced in the town of Espirito Santo in Eastern Brazil. Assu has lost 90% of his crop this year and the production of the robusta bean, used primarily in espressos and instant coffee, was down 30% across his state. Experts fear coffee production in the region will completely disappear if there is no improvement in the amount of rainfall, as coffee beans are a water-intensive crop. The report also looks beyond Brazil and claims that warmer weather and reduced rainfall worldwide could cut viable coffee production locations in half by 2050.
Read more about the threatened supply of coffee here.
Have a great weekend!
