CASE ANALYSIS ON OPERATIONS STRATEGY AT GALANZ
Question:
1. Rank the importance of Galanz’s operations objective of cost, quality, flexibility,
delivery, service and innovations. How has the importance changed over years?
2. What are Galanz’s competitive and operations strategy and how does the
operations strategy support its competitive strategy?
3. What should Mr. Liang do to lead his company to greater success? Should it
change its overall cost leadership strategy? How should the company change the
priorities and utilize resources and capabilities to gain competitive advantage in
market place?
1. Rank the importance of Galanz’s operations objective of cost, quality, flexibility,
delivery, service and innovations. How has the importance changed over years?
Ans: The operation objectives are based on its competitive advantage, customers’ needs,
business environment and opportunity. Galanz’s most important objective was cost as it
only had abundant supply of land and labor. Since it used cost leadership, it helped to lead
the market by eliminating its competitors during the early stages of business. It helped not
only to capture Chinese domestic market but also helped to attract foreign market as well.
Galanz expanded their business in overseas market through OEM so they prioritized
delivery as they had to provide various equipments and components efficiently. They also
focused on quality because in order to capture foreign market and develop a long term
relation with foreign companies, quality was very important.
As they expanded their business through OEM, OBM and ODM, it further facilitated them
to operate with more ease in the market. They didn’t have to rely on other companies for
various designs and components.
A micro oven’s major component was magnetron so they had to rely on it through its
suppliers. The suppliers decided to reduce the supply of magnetron which prompted
Galanz to initiate a major investment in magnetron R&D in 1997. Then they transformed
into ODM which was very successful. They focused in innovation so as to remain
competitive not only in microwave oven but also in other different components that they
supplied to other companies.
The importance of Galanz’s operation objectives have changed over the years in the
following ways:
During 1990’s, early stages of Galanz’s business, they prioritized on cost leadership as it
was the only way they could capture the market. During that period, microwave oven was
very expensive as it was only targeted to high end market. During 1996, it also focused on
various cost cutting strategies which later helped to increase market share and eliminate
