Operations Strategy at Galanz

Galanz Case

CASE ANALYSIS REPORT ON

Operations strategy at Galanz

MGT 546 Operations and Service Management

Case Summary

This paper is all about one of the leading electronic appliance manufacturer of china, the Galanz group. The case tells about the phase development of a manufacturing company. How a down feather producing company entered into production of the microwave oven and how they become the leader in national and international market.

The company was found in 1978 as the down feather producing company. The original name of Galanz was Guizhou Down Product Factory and their main objective was to produce down product to supply in the international market and earn foreign currency.

But the drastic change in the company was brought by the decrease in the revenue of the company because of the quota system and the industrial revolution played major role in the transitional phase of the company.

They are the leading manufacturer by covering microwave oven market 50% of total market share by 2003. The case also explains about the competitive and operation strategy that Galanz used to achieve meteoric growth.

The initial competitive strategy of the company was cost leadership, and they followed it. The cost leadership benefit was available to this company because of the factors of production available at low cost. Not only that the company adopted in innovative style of production in operation and due to which was able to gain exponential growth.

Case Analysis

Q.1. Rank the importance of Galanz’s operations objective of cost, flexibility, delivery, service and innovations. How has the importance changed over years?

In the early phase Galanz did not have any competition; they prepared the ovens by outsourcing the parts of the oven and selling the equipment in the international market. They operated for supplying the parts of the oven to the international producer. The cheap labor and land to produce gave Galanz a competitive advantage, which reduced the cost of production. Their products were used as the raw material and value was added and sold at premium price in by the foreign companies. So, at first we can say that the company was operating at low cost strategy because they wanted to make money. This was also because of the political views followed by the country.

The country was moving towards modernization, the Chinese households were entering into new way of cooking. The government and its policies were changing. So, the domestic market for the product was opened. They also went into price war to dominate the international players when they realized the potential domestic demand of the oven i.e to gain market share from its competitors. From 1996, Galanz adopted low