Operations Strategy at Galanz

Topics: Manufacturing, Microwave oven, Assembly line Pages: 5 (1639 words) Published: October 12, 2014
1. What were the order winners/order qualifiers for Galanz in the microwave oven business during the early stage of its development?

Quality is one of most important factors for order qualifiers because it provided reliability for customers to use them. However, the low-price strategy was the order winner during the early stage of development of Galanz.

To win orders, Galanz adopted a low-price strategy. Low product prices which can be afforded by domestic market triggered more demand. With this increased demand, Galanz achieved greater economies of scale, which helped to lower costs and prices further. In addition, it also attracted foreign manufacturers to transfer their production facilities to Galanz. With the cheap price of components, Galanz expanded their business overseas successfully in the early stages.

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?

At the initial stage when Galanz entered into the electrical appliance market from the garment industry, it relied on the low price of magnetron production and benefited from the low cost of labor when competing with other companies already existing in the market. They also focused on quality because it is one of the most important requirements to assure a long-term relationship with foreign manufacturers. The further expansion of business through OEM, OBM, and ODM enabled Galanz to be flexible in microwave production. Service and innovation are the part that Galanz initially concentrated less on until 1995. The exponential growth of the microwave oven business threatened the major magnetron supplier and reduced the supply for Galanz. Therefore, Galanz started to initiate its own R&D efforts in 1995 in order to prevent the supply crisis. After 1997, Galanz further collaborated with scientific institutes in order to improve mechanical design and reduce cost.

Galanz noticed the importance of R&D and service because customers’ needs varied in these years. In the early stage, Galanz could only provide low price to the customers. However, after their OBM business started Galanz had to face another group of customers with more varied needs. Galanz will need to provide a competitive service to these customers with various needs.

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

While in research and development, the technology of being able to manufacture and produce mass quantities of Galanz’ own magnetrons was a major advantage to the success of the company. With Toshiba backing out of their arrangement to supply magnetrons, as well as Panasonic offering to only produce and supply a small amount of the magnetrons needed, research and development became a key essential aspect of the company’s future to keep microwave production high while remaining at a relatively low cost. This technology not only allowed Galanz to create magnetrons in house with costs only being supplies, but reduced there need to rely on other companies and eliminated a possible threshold wall of production they may have otherwise may have faced. The research and development also supplied Galanz with new functions to their microwaves such as the ability to steam, grill, boil and more. Between the new functions and smaller features like LCD touchscreens and newer sleeker looks and materials helped to keep Galanz at the top of the market and maintain their massive market share.

4.What are Galanz's competitive and operations strategies, and how does its operations strategy support its competitive strategy?

The core competitive strategies of Galanz mainly reside in their cost leadership approach and ability to wage price wars to gain market share. Their operations strategies directly complemented these competitive strategies through a variety of ways. Operationally, Galanz aimed to escalate production capacity through free production...
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