Operations Strategy at Galanz Harvard Case Solution & Analysis

What are Galanz's competitive and operations strategy and how does the operation strategy support its competitive strategy?

Galanz’s competitive and operations strategy:

Initially, the competitive strategy followed by the company was cost leadership. With the help of low-cost leadership, the company had successfully gained the market share, its strategy has a huge potential for it to grow. In addition to that, the company was successful in achieving low cost product in the home country and other countries. The business of the company involves manufacturing and thus the company can achieve cost leadership either through making economies of scale and optimum use of resources. Through this, the company would be able to enhance its manufacturing scale and that in turn will reduce the overall average cost of production.

Moreover, the company followed the production capacity expansion and price cutting cycle. It further uses its facilities and capacities to attain low cost of production. Initially, the company has followed cost leadership strategy and later, the company shifted its focus towards making high quality, low cost product and fast delivery in its competitive and strategic planning. Last but not the least, the company can achieve blueprints for the decision making through its operating strategy, and this needs to be backed by the competitive strategy for the success the company in the market.

What are the differences between OEM/ODM versus OBM in terms of production, design, marketing, distribution and customer service?

Original Equipment Manufacturer (OEM):

Original equipment manufacturer is a term that is related to the manufacturing industry. OEM can be defined as a company that is accountable for the manufacturing of the products and does not engage as an owner of the brand. The company manufactures equipment with respect to the specifications that have been required by the client’s firm. The company only manufactures products and then sell it to other companies, who then do further processing of the product. The OEM manufactures a product and sells it to the respective company who then sell it in the market under their brand name.

Companies often want OEM to reduce the cost and achieving efficiency in the operations. The skills and competence that has been achieved through OEM help companies to gain competitive advantage of the company. The OEM has been famous and most commonly used in China because China is insufficient in terms of brands, technology, distribution and sales related proficiency.

Original Design Manufacturer (ODM):

The Original Design Manufacturer can be defined as a company whose prime tasks involve manufacturing along with the designing and building of the equipment. The ODM companies design products as per the requirements of the company who owned the brand. There are certain manufacturers in China who can design the products along with manufacturing. Companies often learn the designing capabilities and skills through competitors and the companies that are engaged in the designing of products. The company can transform from original equipment manufacturer to original design manufacturer just by adding design to it.

Original Brand Manufacturer (OBM):

The original brand manufacturer is the companies that are defined as the ones who are engaged in manufacturing, designing and branding of the company as well. In OBM, companies are also accountable for the sales, marketing and distribution of the products as well. The company who has gone through with the process of OEM and ODM are said to be OBM. As mentioned, the company is accountable for the manufacturing, design and branding of the product, thus; it has to be accountable for the brand image of the product as well. By shifting from being an Original Equipment Manufacturer to the Original Brand Manufacturer, the companies need to invest more in areas of creating brand awareness among the customers.

Should Galanz develop its OBM business in international market? Should Galanz continue its OEM and ODM business?

Developing OBM business in an international market or not?

The company Galanz is known to be a leader in the Chinese market as an original brand manufacturer, but the company has not yet built the same reputation in other countries of the world. China has known to be an Original Equipment Manufacturer (OEM) in the rest of the parts of the world. Previously, the company has tried to build its reputation in the international market, but, unfortunately, failed to do that because of the less recognition and presence abroad. Despite the fact that, the overall production of the company is increasing. But still, entering into the international market might become a challenge for the business as it may lose its existing OEM customers. Furthermore, the company has offered a variety of differentiated products....................................

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