OPERATIONAL STRATEGY
of
GALANZ
Economics and Management, Tongji University
Teacher’s Name : WANG Shijin
Student’s Name: Md. Manik Rana Chowdhwry (1436299)
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About Galanz
Funded in 1978 by Liang Zhaoxian, as an enterprise dealing in
down feather products
Obtained Export quota in 1992 in China which was restricted.
Thereby obtaining export volume by more than RMB 23 Million.
The Management decided to diversify due to projected week
future. Product first Microwave oven in 1992.
In 1995, Galanz captured 25.1 percent of domestic microwave oven
market.
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Q1.What were the order winners/order qualifiers for Galanz in the
microwave oven business during the early stage of its development ?
Offering a low price was way to compete in the market.
Abundant supply of cheap labor and land.
Further achieve a low cost of production and further increase production
capacity.
Suppliers settings us component production in Galanz
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Q2.Rank the importance of Galanz’s operations objectives of cost,
quality, flexibility, delivery, service and innovations. How has
the importance changed over the years?
Cost
Quality
Flexibility
Delivery & Service
Innovations
Tactic to reduce production cost
Quality earned acclaim among international industry
Customizations
Variety
Highly Centralized Organizational Structure.
Galanz has set up a strong marketing network and distribution
channel which is cooperation by commercial agents and different
places. Lunching new and different product with warranty
and maintenance service
Production of magnetrons and establishment of R&D Department
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Q3. What is the role technology has played in the success of Galanz?
Production technology and key components parts were purchased from Japan
Galanz is undergoing transference from production scale to high technology,
From professionalism to diversification, from manufacturing to creativity and
From a worldwide manufacturing facility to a global brand.
Galanz has invested 5% of its annual turnover in research and development and
Has set up five research and developments centers in Hongkong, USA, South Korea
Zhongshan and Shunde.
Investment in R&D has proven fruitful along with learning from overseas
partners and importing the most advances technologies through these
relationships
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Q4, What are Galanz’s competitive and operations strategies, and how does
its operations strategy support its competitive strategy ?
Completive Strategy: Low price and high quality
Operation Strategy: 3 shifts worker and 24 hours production line.
Low labor cost and 24 hours production line able to produce much lower price
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Q5, What are the different between OEM/ ODM versus OBM in terms of production,
design, marketing, distribution and customer service ?
OEM/ODM
OBM
Original Equipments Manufactures/
Original Brand Manufactures
Original Design Manufactures
OBM forecast demand for end
customer
OEM/ODM take order from their
purchaser /business customer.
Either OEM or their purchaser
arrange distribution system.
They need to manage distribution
system to take competitive
advantage among its competitors
OEM and their business customer work
very closely, thus they don’t need focus
customer service .
OBM must keep themselves their
customer service.
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Q6, Should Galanz develop its OBM business in the international market ?
Should Galanz continue its OEM and ODM business ?
Yes, Galanz should develop its OBM business in the international market.
Its help Galanz to get world recognized brand image
Its help to penetrate in other countries where Galanz is currently not present.
Yes, Galanz should continue its OEM and ODM business
These business help Galanz to get economies of scope .
These business did not require Galanz to invest in brand building thus high profit
and Galanz can price Microwave Oven at lower side.
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Q7, What should Mr. Liang do to lead its company to greater success ? Should the
company Change its overall cost leadership strategy ? How should the company set
priorities and Utilize its resources and capabilities to gain competitive advantages in the
market place ?
Effectiveness of low cost strategy-company can increase the price of new
products.
Combination of OEM , ODM and OBM
a) Should have a balance between OEM and ODM in the overseas market.
b) Foreign customer value brand more then cost .
c) Focus should be more on OEM, but at the same time improve the OBM business
step by step.
d) Need to invest more resources in customer relationship management.
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THANKS
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