Galanz Case Study Final answer PDF

Preview

Summary

Galanz Case Study Final answer...

Description

Galanz Case Study Q.1 What were the order winners/qualifiers for Galanz in the microwave oven business during the stage of its development?

Order Qualifiers:  Quality  Delivery

Order Winners:  Low Cost  Low Price

Q.2 Rank the importance of Galanz‘s operations objectives of cost, quality, flexibility, delivery, service and innovations. How has the importance changed over the years?

  





 

In the recent ten years, Galanz's core competitive power lies in one point: its low price/cost. First of all, it constantly develops new products and proprietary technologies(Flexibility); Second, it launches high quality and low-price products to enlarge its market share by making use of its advantage in total cost (small profits but quick turnover); Thirdly, it begins to develop key components and parts by applying its own technology by investing more in R&D and puts them into production to further reduce the total cost of manufacture. Thereby Galanz set up an entrance barrier which is a key in such strategy(Innovation). The equipment that Galanz has introduced through OEM, great-batch production, low labor force cost, big span of control and monopoly on the party of purchaser have made Galanz get an advantage in cost for a long period: the reason why it could reduce its prices so frequently much lower than its antagonists', and it has a sufficient space for making profits. Fourthly, Galanz's scientific marketing strategy was a great competitive power (Service and Delivery). Furthermore, it had developed new functions of microwave oven and improved the consumption environment for its global customers. Then Galanz has set up a strong marketing network not its own distribution channel but in cooperation with commercial agents in different places. It also consolidates its market by ceaselessly launching new and different products and improving its service quality and service level (warranty, trans-regional maintenance service)

Q.3 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 heavily in key technologies and development of key components. The uniqueness of Galanz is to control the key technologies and key components lead them to “Made in China to Created in China”  Galanz believes that key technologies have great importance in its development and high-end products will enable it to take the global market.  First mover advantage in technological innovation in Light wave ovens in 2001.  Galanz has increased its investment in product research and development and has strengthened the innovations. Every year, Galanz has invested 5% of its annual turnover in research and development and has set up five research and development centers in Hong Kong, USA, South Korea, Zhongshan and Shunde. It plans to set up the sixth research and development center in Japan.  By 2007, Galanz has made over 760 achievements related with microwave ovens, to include spherical microwave technology, microwave enhancing and compensation technology, microwave leakage prevention technology, light wave technology, aerobic cooking technology, etc. which have become a landmark for this industry. Galanz has registered over 1000 patents, to include more than 10 international patents and over 700 authorized patents. Q.4 What are Galanz competitive and operations strategies, and how does its operations strategy support its competitive strategy?       

Competitive Strategies: Low price of Microwave Oven High quality Operation Strategies 24/7 working production line Employees working 3 shifts in production line Economies of Scale gained by having low cost and large number of available labour helped Galanz to work for 24/7 working production line by which they can produce much lower price Microwave Oven with good quality.

Q.5 What is the difference between OEM/ODM versus OBM in terms of production, design, marketing, distribution and customer services?

OEM / ODM Original Equipment Manufacturer/ Original Design Manufacturer

OBM Original Brand Manufacturer

OEM, manufactures / design products or components that are purchased by another company and retailed under the that purchasing company’s brand name.

Selling the product of the second company under its own brand just adds a virtual extrinsic value to product.

OEM / ODM take order from their purchaser / business customer

OBM forecast demand for end customers

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 to focus much on customer service.

OBM must keep themselves open to their customer so that customer can interact them at any time.

OEM/ODM vs OBM in overseas market     

Overseas consumers were not familiar with Galanz as a brand of microwave ovens. Strategic partnership with multinational companies such as K-Mart and Wal-Mart were confined to OEM deals. Liang junior began to offer Galanz- branded microwave ovens to superstores. Technical support from Fillony to help Galanz set up R&D centers overseas to showcase Galanz branded microwave ovens in the country. Ratio of Galanz OBM and OEM microwave ovens rose from 1:9 to 3:7 from 1997 to 2003.

Q.6 Should Galanz develop its OBM business in the International market? Should Galanz continue its OEM/ODM businesses?

 Yes, Galanz should develop its OBM business in the international market.  It help Galanz to get world recognized brand image.  It help to penetrate in other countries where Galanz is currently not present. o Yes, Galanz should continue its OEM/ODM businesses o These businesses help Galanz to get economies of scope. o These businesses did not require Galanz to invest in brand building thus high profit and Galanz can price Microwave oven at lower side.

Q.7 What should Liang do to lead his 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 advantage in the market place?

- Effectiveness of low cost strategy- company can increase the price of new products. - Combination of OEM, OBM and ODM a) b) c) d)

should have a balance between OEM and ODM in the overseas market. foreign customer value brand more than cost. focus should be more on OEM, but at the same time improve the OBM business step by step. e) Need to invest more resources in customer relationship management....