The Global Production Network of Samsung Galaxy S3 Smartphone - Assignment Example

The Global Production Network (GPN) of Samsung Galaxy S3 Smartphone Name Institution Course Date The Global Production Network (GPN) of Samsung Galaxy S3 Smartphone Background information of Samsung Galaxy S3 Smartphone Samsung Electric Industries, South Korean Company, released its first Android Smartphone in 2009 as well as the launching of its first Android tablet in 2010. Today, the company has developed into one of the biggest players in the production of Smartphone in the global market of mobile phones. Samsung Galaxy S3 is the third edition of its leading model that the South Korean Company continues to launch on the fast-paced Android Smartphone global market (Stieglitz 2013). This essay analyzes the Global Production Network (GPN) of the Company’s Android-based Samsung Galaxy S3 Smartphone. Global production networks (GPN) are platforms used by organizations or actors in various regional and national economies practice to sustainably compete and cooperate in order to achieve greater share of creating, developing and capturing value in the form of geographically dispersed economic interventions or activities. In GPN theory, the dynamic idea of the cost-capability ratio is applied to describe its optimization process that enables a number of firms involved in global production networks to gain more advantage of firm-specific capabilities as well as the value capture over time. Therefore, the underlying argument in this theory is that although cost reduction should be regarded as significant capitalist dynamic influencing lead firms to involve in outsourcing or subcontracting to becoming independent suppliers within home and at international level, cost is perceived to be a relative concept. This means that it should be understood in together with the so-called “act-specific capabilities” of such lead firms, and their respective suppliers so as to ultimately achieve a complete view or conclusion of its actual causal influence on both the formulation and development of their global production networks. In so doing, the dynamics of applying the cost-capability ration will be crucial in understanding the rationale for outsourcing certain value activities to independent supplier as often practiced by global lead firms (Yeung &Coe, 2015). The various forms of labour that go into creating the Samsung Galaxy S3 Smartphone product and how is this work globally distributed? Samsung which is a South Korean conglomerate has 350,000 employees across the world. Generally, the pre-orders of Samsung Galaxy in particular S3 now total to 9 million, which huge. The 9 million orders positions the Galaxy S3 as the fastest selling gadget. Basically, the orders come through network carriers worldwide and made based on the customer pre-orders, upgrades as well as anticipated demand (Anthony 2012). Big seller: Samsung has had 9 million pre-orders for the S3 - but you may be waiting for the blue mode Given the reports that Samsung Galaxy SIII gets pre-orders for 9 million units, it means that the handset is the fastest selling gadget. Thus, the 9 million figures are higher than the 8 million units pre-ordered for Microsoft Kinect that is sold within a 60 day period. Now, it is important to determine how many people or workers are used to make the huge quantities of the Samsung Galaxy S3 Smartphone-the eagerly awaited handset. The research by ExtremeTech from some releases and news stories show that it takes 75,000 workers to create the 9 million unites of the Samsung Galaxy S3 as well as the extra millions more made in future sales. In order to make the gadget, 60 Samsung production lines produce 5 million of Samsung Galaxy S 3 phones cost labour of 38,400 workers. When this figure is doubled, a total of 76,800 factory workers are used. However, it should be understood that the various parts used in making the Samsung Galaxy S3 gadget ranging from the OLED screen to quad-core exynos processor as well as RAM and NAND flash, are entirely made in-house by Samsung. By considering the manufacturing process of its mobile devices in particular-Galaxy S3 Smartphone, it is apparent that Samsung is higher with overhead that Apple. The 76, 800 works making the gadget represents about 10% of their total payroll, which is more than the entire payroll of Google (Alan 2012). How is the value captured at each stage of Samsung Galaxy S3 Smartphone production distributed along the network? Innovation is a key in upgrading in global production networks. Since lead organizations are involved in the distribution of their various production segments across firms and regions, it means that production knowledge is also distributed across such areas of production. In value capture attempts, therefore, firms develop mechanisms of how to upgrade by strategically developing into economy firms. For such firms, distributed knowledge, reverse and new innovations are core to the businesses. Forms of upgrading in GPNs focus mainly on process, function and product where learning and development of the national and firm level capabilities are considered through reverse engineering. With reverse engineering, a product is made based on its knowledge and by changing and upgrading its process of production (Nathan & Sarkar 2013). Through product differentiation of its Smartphones, Samsung Company offer their consumers with a variety of choice for making the actual product. Since it is a lead company, Samsung had attained unmatched global competitiveness particularly in hardware. When developing its Galaxy S3 Smartphone, Samsung pays more attention on enhancing the gadget’s software capabilities within the user interface and experience as well as design and brand awareness. As a way of retaining its competitive edge, Samsung has based on these software capabilities to continuously produce quality and innovative Smartphones across the world so as to enable company stay in the lead. For example, it can be argued that everybody feels good to snap pictures with his or her Samsung Galaxy S3 but majority use the Auto Mode more than other camera settings. Although the S3 camera’s automatic settings are useful, a lot more of other things one can do photographically with the gadget. As a mechanism for capturing value at every stage of developing its Galaxy S3 Smartphone, Samsung combines a basic introduction to the gadget’s camera settings to get a consumer being in a position to shoot better photos instantly (Carlon 2013). It is necessary to point out that Samsung Company has produced the best Android phones on the global market, ranging from the screen to camera to battery life. For example, the Galaxy S3 has beaten its competitors prior to venturing in innovation of software features and customizations. With the powerful marketing arm of the company, Samsung has utilized the advantages and broadcasted them on global scale, and thus the Smartphone has taken over the mobile industry. It can be noted that other Smartphone vendors exist worldwide who also use the Android software-LG, Huawei, but they do not make serious profits like Samsung does in the global market of mobile or Smartphones. However, Samsung pays attention to the fact that mobile phones are manufactured in a vast global production network and supply chain. Therefore, the company makes the same phone with different components which come from alternate suppliers. This makes the Galaxy model to vary by country and within country where it is developed from. It is notable that a particular variant may not necessarily be optimal with the network. Samsung has 10 variants of the same gadget-Galaxy S3 Smartphone (Kelion 2013). Samsung with its Galaxy S3 has grown and developed through its new polycarbonate chassis that is aimed at making a sustainable first impression. A part from the common high-end components used, the Galaxy is made of advanced features such as a big battery, near-field communication (NFC), micro SD card reader as well as the core software functions supplement of the Samsung. With the software, the gadget is developed on the pre-installed Android 4.0 operating system is well-positioned in the mobile global market because of its advanced ToucWiz 5.0 interface. For its unique case, Samsung maintains its production line and depends on a mult-component casing created from polycarbonate which has a removable back cover. Furthermore, the gadget comes with the exchangeable battery and a chip for inserting a memory card as its advantages of the design (Martin 2013). The Galaxy S3 Smartphone also developed with a micro USB 2.0 port on its bottom end, purposely to enable the sharing of audio and video material using mobile high definition link (MHL-HDMI). The gadget is produced in the sense that it suitably works best in most networks worldwide, for instance, it supports the four major GSM frequencies known as “quad-band, 850/900/1800/1900 MHz. On the side of the camera, Samsung installs two camera modules for its Galaxy S3 Smartphone to enhance good quality pictures. The phone is made to take HDR pictures where after a burst shot, the gadget automatically submits the high quality picture. The specific Samsung features are also enabled such as the smile recognition and the social tagging. This helps to owner to tag a person on a picture whenever he or she takes a shot of family or friends. All these features are created on the phone to capture value at each stage of Samsung Galaxy S3 Smartphone production and globally distributed along the network (Stieglitz 2013). What are the institutional arrangements put in place in the production of that explain the structure of its Global Production Network (GPN)? It is important to note that global production networks have occurred massively as key organizational innovation within the global operations. In particular, the needs to respond to the increasingly demanding conditions of global competition, different transformations have taken place in the attempt to organize the international economic transactions. The fundamental idea here is to understand what has exactly driven the shift from the multinational corporations to more advanced global network productions or players who appropriately integrate their dispersed, knowledge, sustainably built customer bases and suppliers into global and regional production networks. In this case, the idea of institutional arrangements or change becomes important to understand the factors behind the shift to global production network. Generally, institutions are perceived as the rules governing a society that focus on structuring the human interaction. These include; formal rules, common laws and regulations as well as informal constraints such as, norms of behaviour and the self-imposed codes of conduct. From the organizational management point of view, it should be noted that institutions plays a significant role in ensuring appropriate allocation of resources, imposing the rules of competition as well as firm behaviour. However, the analysis of institutional factors or forms of change should not only narrowly focus on transactions costs but to at least a broader competitive environment or global markets where firms operate (Ernst & Kim 2001). This implies that the market structure and the competitive changes or dynamics must be carefully analyzed taking into consideration the integral role of knowledge and innovation in an organization. In order to ensure that value are created for their stakeholders in particular, customers, suppliers, investors, employees, shareholders and local communities, Samsung Electronics Company has focused towards expanding their commitments to the social and environmental responsibility. When developing Samsung Galaxy S3 Smartphone product, Samsung embeds the aspects of social contributions and sustainable practices into their core business which reflects the structure of its Global Production Network. The new goals are developed to enhance their corporate citizenship with the main objective of creating a healthier global community by offering a more advanced Galaxy S3 Smartphones. The development of Samsung Galaxy S3 Smartphone takes into consideration the significance of creating shared value as well as giving back through Samsung products. As a result, the company performs to contribute to enhance the livelihoods of communities dwelling in areas prone to global problems. Therefore, institutional measures such as poverty reduction, environmental protection, promotion of energy self-sufficiency and health promotion are key areas of interest when creating shared valued and offering the communities where they operate in with Samsung Galaxy S3 Smartphone products. Every time the Samsung wants to develop a new product, for instance, a new variant of Galaxy S3, it conducts research on potential environmental as well as societal impacts. Besides ensuring that the new Galaxy products make people’s lives increasingly convenient and enjoyable, the company also aim at making the global community healthier. With its energy-efficient Galaxy S3 Smartphone, it is believed that the product’s global offering is specifically designed to address critical issues in various parts of the world, for instance, scarce power supply, highly climate change and shrinking water resources. Thus, the development of Galaxy S3 Smartphone product is a clear indicator of the company being committed to launching innovative products that create positive impact on significant global issues whilst fulfilling their consumer needs (Samsung Sustainability Report 2013, p.25-26). Bibliography Alan, F., 2012, ‘Samsung Galaxy S III made by 75,000 workers; phone is the fastest selling gadget of all-time’, ExtremeTech, Retrieved April 9, 2016 from, Anthony, S., 2012, ‘How many people does it take to make 9 million Samsung Galaxy S3 Smartphones?’ Retrieved April 9, 2016 from, Carlon, K., 2013, Android for Beginners: Galaxy S3 Camera – Beyond Auto Mode, AndroidPIT International. Ernst, D & Kim, L., 2001, Global Production Networks: Knowledge Diffusion and Local Capability Formation, Nelson & Winter Conference, Denmark. Kelion, L., 2013, ‘Samsung: Is the Smartphone-maker in deep water?’ Retrieved April 9, 2016 from, Martin, C., 2013, Samsung Galaxy S3 review-how does the Android phone that changed everything stack up now? PCAdvisor. Nathan, D & Sarkar, S., 2013, Capturing the Gains: Economic Innovations and Upgrading in Global Production Networks, The University of Manchester, in UK. Samsung Electronics Sustainability Report, 2013, ‘Inspire the World Create the Future: creating a new future that positively impacts the entire global community’, Retrieved April 9, 2016 from, Stieglitz, L., 2013, ‘Review Samsung Galaxy S3 (GT-I9300) Smartphone’, Smartphone Android, Retrieved April 10, 2016 from, Yeung, W.H & Coe, M.N., 2015, ‘Towards a dynamic theory of global production networks’, Economic Geography, Vol.91, No.1, pp. 1-23. Appendix Samsung Galaxy S III detailed specifications General Alternate names GT-I9300 Release date May 2012 Form factor Bar Dimensions (mm) 136.60 x 70.60 x 8.60 Weight (g) 133.00 Battery capacity (mAh) 2100 Removable battery Yes Colours Pebble Blue, Marble White SAR value NA Display Screen size (inches) 4.80 Touchscreen Yes Resolution 720x1280 pixels Pixels per inch (PPI) 306 Hardware Processor 1.4GHz  quad-core RAM 1GB Internal storage 16GB Expandable storage Yes Expandable storage type microSD Expandable storage up to (GB) 64 Camera Rear camera 8-megapixel Flash Yes Front camera 1.9-megapixel Software Operating System Android 4 Skin TouchWiz UI Connectivity Wi-Fi Yes Wi-Fi standards supported NA GPS Yes Bluetooth Yes, v 4.00 NFC Yes Infrared No USB OTG No Headphones 3.5mm FM Yes SIM Type Micro-SIM GSM/ CDMA GSM 3G Yes 4G/ LTE Yes Supports 4G in India (Band 40) No Sensors Compass/ Magnetometer Yes Proximity sensor Yes Accelerometer Yes Ambient light sensor Yes Gyroscope Yes Barometer Yes Temperature sensor No Source Data from: Gadgets 360 NDTV Venture http://gadgets.ndtv.com/samsung-galaxy-s-iii-555 Read More