Supply Chain
1. The success of Galanz is mainly the result of adopting different competitive strategy and operations strategy under different internal and external situation.
From the perspective of competitive strategy, first Mr. Liang took the overall cost leadership strategy. As he well understood the competitive edge of his company was offering cheap labor and cheap land, he offered a very low price to the customers. By doing that, Galanz beat the competitors away as they could not make big profit and Galanz gained a big market share within a short period of time. At the same time, Galanz escalated its production capacity through free production line transfer and provided necessary training to the operators by its clients. The most important thing was Galanz had the right to use the excessive capacity for producing its own product. By doing this, Galanz fully utilized the production facilities and resources and produced the products in a lower cost with better quality. Ultimate, Galanz could further lower the product price and attract more clients and gain more market shares. This price cutting cycle helped Galanz building a strong financial and operation foundation. The most important achievement was Galanz became the overall cost leadership. Once Mr. Liang had the solid foundation, he tried to differentiate his product from others. He tried to develop his OBM business with cheaper and better quality as the brand image focusing domestic market. Meanwhile, he kept his OEM business focusing foreign market
From the operations strategy perspectives, Mr. Liang understood he had no technology and technical experts at the very beginning. So Galanz focused only on OEM business at a very low price. As mentioned above, Galanz had the right to use the excessive capacity for producing its own product in the client’s production line. Then the capacities could be fully utilized and also helped integrate the process with its key clients. Through the OEM manufacturing, Galanz and
From the perspective of competitive strategy, first Mr. Liang took the overall cost leadership strategy. As he well understood the competitive edge of his company was offering cheap labor and cheap land, he offered a very low price to the customers. By doing that, Galanz beat the competitors away as they could not make big profit and Galanz gained a big market share within a short period of time. At the same time, Galanz escalated its production capacity through free production line transfer and provided necessary training to the operators by its clients. The most important thing was Galanz had the right to use the excessive capacity for producing its own product. By doing this, Galanz fully utilized the production facilities and resources and produced the products in a lower cost with better quality. Ultimate, Galanz could further lower the product price and attract more clients and gain more market shares. This price cutting cycle helped Galanz building a strong financial and operation foundation. The most important achievement was Galanz became the overall cost leadership. Once Mr. Liang had the solid foundation, he tried to differentiate his product from others. He tried to develop his OBM business with cheaper and better quality as the brand image focusing domestic market. Meanwhile, he kept his OEM business focusing foreign market
From the operations strategy perspectives, Mr. Liang understood he had no technology and technical experts at the very beginning. So Galanz focused only on OEM business at a very low price. As mentioned above, Galanz had the right to use the excessive capacity for producing its own product in the client’s production line. Then the capacities could be fully utilized and also helped integrate the process with its key clients. Through the OEM manufacturing, Galanz and