Operations Strategy at Galanz

Operations Strategy at Galanz
1. What were the order winners and order qualifiers for Galanz in the microwave oven
business during the early stage of its development?
In the early stage of its development for Galanz:
Orders winners - Characteristics that provide a competitive advantage for the company and
differentiate the product from competitors. Low price and low cost are order winners for Galanz.
Order qualifiers - Characteristics that are necessary for the companies to exhibit to stay
competitive and differentiated in the market. In the case of Galanz, the delivery of products
along with the quality of products are the order qualifiers.
2. Rank the importance of Galanz’s operations objectives of cost, quality, flexibility,

delivery, service and innovations. How has the importance changed over the years?
Galanz focused on lower cost of production while developing quality products. Galanz also
placed great importance on innovation by collaborating with foreign companies in acquiring
technical know-how and by partnering with universities to develop technology. It developed
flexibility by simultaneously managing its OEM, ODM and OBM businesses. When Galanz
started on focusing on its OBM business, it prioritized delivery to its customers throughout the
world and providing customer service in order to promote and bolster the Galanz brand
internationally.
1. Cost
2. Quality
3. Innovation
4. Flexibility
5. Delivery
6. Service
As Liang wanted to grow the business he focused more on the OBM side of it and therefore
Galanz started prioritizing delivery and services in order to make customers aware of the Galanz
brand.
3. What is the role technology has played in the success of Galanz?

Galanz is transitioning from a global manufacturing facility to a global brand, from production
scale to high technology. Galanz has made significant investments in essential technology and
component development. Galanz collaborated with other companies in order to get their
employees
trained and acquire technical know-how. Galanz's distinguishing feature is its ability to control
key technologies and components, allowing them to move from "Made in China to Created in
China" - Galanz thinks that key technologies are critical to its development and that high-end
products will allow it to enter the worldwide market. Galanz has raised its product research and
development spending and improved its innovative capabilities. Galanz has built up five
research
and development facilities in Hong Kong, the United States, South Korea, Zhongshan, and
Shunde,
each investing 5% of its annual turnover in research and development. It intended to open
Japan's
sixth research and development centre. Galanz also partnered with universities in order to
collaborate on innovation and new product development.
4. What are Galanz’s competitive and operations strategies and how does its operations
strategy support its competitive strategy?
Competitive Strategies
● Low priced microwaves
● Quality products
Operations Strategies
● 24/7 production in 3 shits
● Manufacturing magnetrons in-house
● Taking over production of other companies
● Excess supply over demand to motivate sales-force
5. What are the differences between OEM/ODM versus OBM in terms of production,
design, marketing, distribution and customers service?
OEM stands for Original Equipment Manufacturer and ODM stands for Original Design
Manufacturer. OBM stands for Original Brand Manufacturer.
OEM/ODM is a company that manufactures or designs items or components that are purchased
by
another company and sold under that company's brand name. Orders are taken by OEM/ODM
from their purchasers/business customers. The distribution system is set up by either the OEM
or
its buyer. Because OEM and its business customer have such a strong relationship, they don't
need
to put much emphasis on customer care. Manufacturer of the Original Brand Selling the second
company's product under its own label just adds a fictitious extrinsic value to the product. End-
user demand is forecasted by OBM. They must manage their distribution system in order to gain
a competitive advantage over their competitors. OBM must remain accessible to their customers
at all times so that they can interact with them.
● In the international market, OEM/ODM vs OBM - Galanz (OBM) as a microwave oven
brand was unfamiliar to international consumers whereas OEM transactions were the
extent of strategic partnerships with international corporations such as K-Mart and Wal-
Mart.
● From 1997 to 2003, the ratio between Galanz OBM and OEM microwave ovens increased
from 1:9 to 3:7.
6. Should Galanz develop its OBM business in the international market? Should Galanz
continue its OEM and ODM businesses?
Yes, Galanz should expand its OBM company into the global market. The OBM business aided
Galanz in establishing a globally known brand image. It aided Galanz's penetration into nations
where the company was not present. Building a brand allowed Galanz to charge higher proces
for
their microwaves.
Yes, Galanz should keep its OEM/ODM operations going. The OEM/ODM business assists
Galanz in achieving scale economies. These enterprises did not require Galanz to spend in
brand
development, resulting in a strong profit margin and allowing Galanz to price the microwave
oven
lower and undercut competition thereby gaining market leadership.
7. What should Mr. Liang do to lead his company to greater success? Should the company
change its overall cost leadership strategy? How should the company set priorities and utilize
its resources and capabilities to gain competitive advantages in the marketplace?
Mr. Liang should have differential strategies for domestic and international segments. Since
international customers are more brand conscious, Galanz should focus on OBM overseas and
should charge higher prices for its products. Galanz should focus on improving delivery and
customer service to capture market share internationally.
Galanz should also continue its OEM/ODM business as the low cost products help Galanz
maintain its monopoly position in the microwave market and obtain higher profit margins.

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Operations Strategy at Galanz

2. Rank the importance of Galanz’s operations objectives of cost, quality, flexibility,

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

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