Benefits and Costs of Closed Innovation Strategy: Analysis of Samsung’s Galaxy Note 7 Explosion and Withdrawal Scandal

Abstract

The Samsung Galaxy Note 7 has been withdrawn from the market after a number of the devices exploded after its launch in 2016. Our research seeks to answer three questions and proceeds as follows. Did the closed innovation of Samsung trigger the Galaxy Note 7 withdrawal? If so What are the costs and benefits of Samsung's closed innovation? From among the qualitative inquiry methods, this study used case study research. From this research, we isolated three important implications. The first is the benefit and cost of Samsung Electronics' closed innovation strategy. The second is the internal impact of the Galaxy Note 7 explosions on Samsung Electronics. The third is that success in open innovation strategies requires a great investment to produce strong effects. © 2018 by the authors.