Discussion Question: 1.

What were the order winners/order qualifiers for Galanz in the microwave oven business during the early stage of its development? 2. Rank the importance of Galanzs operations objectives of cost, quality, flexibility, delivery, service and innovations. How has the importance changed over the years? 3. What is the role technology has played in the success of Galanz? 4. What are Galanzs competitive and operations strategies, and how does its operations strategy support its competitive strategy? 5. What are the differences between OEM/ODM versus OBM in terms of production, design, marketing, distribution and customer service? 6. Should Galanz develop its OBM business in the international market? Should Galanz continue its OEM and ODM businesses? 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?

Analysis a. Switched to the microwave oven business from the down feather products business in 1992. b. Achieved 70 per cent of domestic market share and 40 per cent of international market share in microwave ovens in 2002. c. Galanzs brand name was well known in China and was gaining increasing recognition in some overseas markets. Products in both OEM and OBM versions were sold in the U.S., European, South American and African markets.

d. The total sales volume of all types of Galanz microwave ovens climbed from two million units in 1997 to 16 million units in 2003. Galanzs revenue increased from RMB2.96 billion in 1999 to RMB10.1 billion in 2003 (over three-fold increase in four years).

1. What were the order winners/order qualifiers for Galanz in the microwave oven business during the early stage of its development? Quality and delivery were the order qualifiers while low cost and low price were the order winners during the early stage of development of Galanz. To win orders, Galanz adopted a low-price strategy. Low product prices triggered more demand. With this increased demand, Galanz achieved greater economies of scale, which helped to lower costs and prices further. This explains why Galanz could continuously start price wars. In addition, it also made arrangements for foreign manufacturers to transfer their production facilities to Galanz. While offering foreign companies low prices (at their cost), Galanz used the production facilities 24 hours a day, seven days a week to produce more products for other customers. Through full utilization of foreign manufacturers production capacities, Galanz continued to