Operations Management
What lead to the success of Galanz Company? Please analyses the company form the perspectives of competitive strategy and operations strategy?
The early success of Galanz can be prescribed to its ability to deploy its resources in an effective manner and establish itself as a recognized brand in its domestic market through a consistent competitive strategy of Cost Leadership (Porter). The competitive strategy of Galanz is cost leadership which has resulted with increased market share by being aggressive in the local market with ongoing price cut cycles leading to a price war in the Chinese domestic market. The price wars which started in 1996 and have been ongoing through until 2002 has ensured that competitors have reduced profits in the microwave oven market as shown in exhait5
Their competitive edge was initially their low land and labor cost, while knowledge in production technology was yet lacking, but utilizing this competitive edge allowed them to serve their domestic (heavily growing) market at a cheaper consumer price than their competitors. Galanz’s cost leadership strategy is transferred to its international OBM markets where it is known for its ability to undercut local competitors.
The operational strategies Galanz has undertaken has been the transfer of production through OEM Agreement, a focus on research and development and product innovation, making use of resources by increasing production capacity through running production 24 hours a day, bringing the production of component facilities in house and an overall drive and need for self-sufficiency in the ever changing market. As a strategic fit operation, Galanz has been able to reduce manufacturing costs through the operations strategies outlined, ensuring a lean manufacturing business that has the ability to increase production when required.
The operations strategy supports the competitive strategy through being productive translating to low product costs, having a high degree of
The early success of Galanz can be prescribed to its ability to deploy its resources in an effective manner and establish itself as a recognized brand in its domestic market through a consistent competitive strategy of Cost Leadership (Porter). The competitive strategy of Galanz is cost leadership which has resulted with increased market share by being aggressive in the local market with ongoing price cut cycles leading to a price war in the Chinese domestic market. The price wars which started in 1996 and have been ongoing through until 2002 has ensured that competitors have reduced profits in the microwave oven market as shown in exhait5
Their competitive edge was initially their low land and labor cost, while knowledge in production technology was yet lacking, but utilizing this competitive edge allowed them to serve their domestic (heavily growing) market at a cheaper consumer price than their competitors. Galanz’s cost leadership strategy is transferred to its international OBM markets where it is known for its ability to undercut local competitors.
The operational strategies Galanz has undertaken has been the transfer of production through OEM Agreement, a focus on research and development and product innovation, making use of resources by increasing production capacity through running production 24 hours a day, bringing the production of component facilities in house and an overall drive and need for self-sufficiency in the ever changing market. As a strategic fit operation, Galanz has been able to reduce manufacturing costs through the operations strategies outlined, ensuring a lean manufacturing business that has the ability to increase production when required.
The operations strategy supports the competitive strategy through being productive translating to low product costs, having a high degree of