Operations Strategy at Galanz Harvard Case Solution & Analysis



Galanz is a Chinese manufacturer engaged in the manufacturing of microwave ovens. The company was formed by Liang Zhaoxian’s father, Liang Qingde in 1978. The company is headquartered in Shunde that is based in Guangdong province. Initially, the primary operations and business of the company was related to manufacturing of down feather products. At that time, the real name of the company was Guizhou Down product factory. During that time, the company’s main operations include manufacturing of down feather products for the clients on a global level. When the company was in the manufacturing of feather products, the companies in China were not allowed to export any products without a quota.

As mentioned in the case that the company was owned by the foreign trade department of Guangdong province, the company had successful in getting the its desired quota export of its products worth more than RMB 23 million in 1992. Later, the company had transformed its business from manufacturing feather products to microwave oven and accounts for more than 50% share in the market worldwide.

Case Analysis

What were the other winners/order qualifiers for Galanz in the microwave oven business during the early stage of its development?

Winner and order qualifiers:

Orders winners can be defined as the traits or characteristics of a business that acts as a competitive advantage for the company and help companies to differentiate itself from the rivals. On the other hand, order qualifiers can be defined as those traits or characteristics that are compulsory for the companies to exhibit to stay competitive and differentiated in the market. In the case of Galanz, the delivery of products along with its quality are said to be the order qualifies for the company. On the contrary, low price along with lost cost are said to be the order winners for the company. This classification of winner qualifiers and order qualifiers is on the basis of development that has been done in the company during the early stage of development.

To deal with win orders the company has previously implemented the low-price strategy that was based on selling products at low cost in comparison with the competitors. In addition to that, the company had successfully achieved cost reduction that in turn leads them to achieve economies of scale. With the help of low price strategy, the company was able to achieve increases in demand that in turn results in a lessening in terms of cost and prices as well. Because of achieving economies of scale, the company has always been up for the price wars and able to sell products at a lower rate than its competitors. In addition to that, the company has successfully made full utilization with respect to production capacities of foreign manufacturers.

Rank the importance of Galanz’s operations objective of cost, flexibility, delivery, service and innovations. How has the importance changed over the years?

Operations objective:

During the initial years, the company does not face any rivalry in the industry. The company was engaged in outsourcing the equipment used in the manufacturing of microwave oven and then sell it to the different parts of the world. The company was engaged in production and selling of equipment to the productmanufacturers worldwide. In addition, the company has a competitive advantage in terms of cheap access to land and labor that gives a competitive advantage to the company. The products manufactured by the company was utilized as the raw materials and add value and thus sold at high prices. This concluded that company is following a low-cost strategy as the main objective of the company was to make money and to gain market share.

During the early stage of development, timely delivery, quality and cost were said to be the most important operational objectives of the company. As of now, the whole country has moved towards modernization and so does the company. The priorities of the company evolved and changed over time and thus the company has modified its focus from pursuing low cost and quality towards innovation and high focus on the quality of the products.

What is the role technology has played in the success of Galanz?

Role of technology:

As the time is passing, the role of technology has been enhanced and now, it has become much easier for the companies gather and manage a large set of information. As the time passed, the company got its expertise and proficiency in the manufacturing of Magnetron that is the equipment used in the microwave ovens………………..

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Starting from a humble beginning of being a manufacturer of down feather products belonging Shunde Township, Galanz Enterprise Group Co., Ltd (Galanz) has been turned into a world-class manufacturer, microwave oven produces about 50 percent of world production in 2003. This case describes the competitive and operational strategies, Galanz, used to achieve such rapid growth. The company began with a clear competitive strategy based on cost leadership. . She developed and implemented a system of operations, to help to reduce costs through economies of scale, the transmission capacity of the developed countries and make full use of available capacities

case has the following objectives: 1. introduce students to the concept of the order of the winner to classifiers, operations priorities / goals. 2. show how the operation priorities should reflect the requirements of the customers and influence on the company wants to compete. 3. demonstrate how a company can gain a competitive advantage through lower costs and a strategy on how to support the business strategy with the strategy and operations capabilities. 4. show the students how a company can build several opportunities over time, and how the strategy and operational capabilities of the company may change over time. 5. provide students with the opportunity to analyze the trade-offs in the strategic, operational and marketing decisions as the business expanded from domestic to international market and from OEM to ODM and OBM. 6. Challenge students to develop coherent plans of action that relate to future growth objectives. 7. help you understand the great opportunities and challenges, and the management of the activities of the supply chain in China. “Hide
by Stephen (Ji Hoon) Ng, Barbara Lee, Xiande Zhao, Xuejun Xu, Yan Lei Source: Richard Ivey School of Business Foundation 17 pages. Publication Date: Aug 05, 2010. Prod. #: 910D05-PDF-ENG

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