GALANZ CASE STUDY
1. What were the order winner/order qualifiers for Galanz in the microwave oven business during the early stage of its development?
When Galanz started its business, the microwave oven business in China was in its infancy and it was less risk to invest in the technology associated with microwave ovens because this technology had been mature and stable for a long time.
At the early stage, Galanz did not have any competitive edge in production technology but only an abundant supply of cheap labor and land. Thus the only way to compete the market is to offering a low price. From 1996 to 2002, Galanz adopted a low-price strategy by repeatedly implementing cycles of price-cutting and production capacity expansion.
During the early stage, the order quantities of microwave ovens were 10000 in 1993, 250000 in 1995, and then 2 million in 1997. The detail is following:
YEAR
DOMESTIC (OBM)
EXPORT (OEM)
EXPORT (OBM)
TOTAL
1997
1.25
0.07
0.68
2.00
1998
3.15
0.40
0.95
4.50
1999
3.00
1.50
1.50
6.00
2000
4.00
3.60
2.40
10.00
2001
6.00
3.00
3.00
12.00
2002
4.00
6.23
2.77
13.00
2003
5.00
7.54
3.46
16.00
2. Rank the importance of Galanz’s operation objectives of cost, quality, flexibility, delivery, service and innovation. How has the importance changed over years?
At the early stage of development of Galanz, the most important objective is cost, because it did not have any competitive edge in production technology but only an abundant supply of cheap labor and land. After Galanz became the leader in the microwave ovens market, its rivals refused to supply the most important component magnetron to it. So it had to developed its own design. At that moment, the most important of objective was innovation. Then by 2003, Galanz began to export its OEM ovens to overseas without brand recognition.
3 What is role of technology has played in the success of Galanz?
The microwave oven market in the 1980s was in its infancy in China, where competition and demand size were small. Only a
When Galanz started its business, the microwave oven business in China was in its infancy and it was less risk to invest in the technology associated with microwave ovens because this technology had been mature and stable for a long time.
At the early stage, Galanz did not have any competitive edge in production technology but only an abundant supply of cheap labor and land. Thus the only way to compete the market is to offering a low price. From 1996 to 2002, Galanz adopted a low-price strategy by repeatedly implementing cycles of price-cutting and production capacity expansion.
During the early stage, the order quantities of microwave ovens were 10000 in 1993, 250000 in 1995, and then 2 million in 1997. The detail is following:
YEAR
DOMESTIC (OBM)
EXPORT (OEM)
EXPORT (OBM)
TOTAL
1997
1.25
0.07
0.68
2.00
1998
3.15
0.40
0.95
4.50
1999
3.00
1.50
1.50
6.00
2000
4.00
3.60
2.40
10.00
2001
6.00
3.00
3.00
12.00
2002
4.00
6.23
2.77
13.00
2003
5.00
7.54
3.46
16.00
2. Rank the importance of Galanz’s operation objectives of cost, quality, flexibility, delivery, service and innovation. How has the importance changed over years?
At the early stage of development of Galanz, the most important objective is cost, because it did not have any competitive edge in production technology but only an abundant supply of cheap labor and land. After Galanz became the leader in the microwave ovens market, its rivals refused to supply the most important component magnetron to it. So it had to developed its own design. At that moment, the most important of objective was innovation. Then by 2003, Galanz began to export its OEM ovens to overseas without brand recognition.
3 What is role of technology has played in the success of Galanz?
The microwave oven market in the 1980s was in its infancy in China, where competition and demand size were small. Only a