OPERATIONAL STRATEGY of GALANZ Economics and Management, Tongji University Teacher’s Name : WANG Shijin Student’s Name: Md. Manik Rana Chowdhwry ( )

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 In 1995, Galanz captured 25.1 percent of domestic microwave oven market.

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

Cost Quality Flexibility Delivery & Service 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 Innovations

Production technology and key components parts were purchased from Japan Q3. What is the role technology has played in the success of Galanz? 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

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

OEM/ODM Original Equipments Manufactures/ Original Design Manufactures Either OEM or their purchaser arrange distribution system. OBM Original Brand Manufactures They need to manage distribution system to take competitive advantage among its competitors Q5, What are the different between OEM/ ODM versus OBM in terms of production, design, marketing, distribution and customer service ? OEM/ODM take order from their purchaser /business customer. OBM forecast demand for end customer OEM and their business customer work very closely, thus they don’t need focus customer service. OBM must keep themselves their customer service.

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.

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 ? Combination of OEM, ODM and OBM Effectiveness of low cost strategy-company can increase the price of new products. 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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