Galanz China

For this report is to do:

1. Introduction of Galanz china

2. Company background of Galanz china

3. Conclusion for the entire report


word count needed > 500~600

Reference list needed > 4


See below Attachment for more detail

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Ranking the importance of Galanz’s operations objectives of cost, quality, flexibility, delivery, service and innovations. How has the importance changed over the years?


#1 Cost

Cost has always been the most important operations objective for Galanz. In the beginning Galanz did not have any competitive edge in production technology, but only an abundant supply of cheap labor and land, thus a low price as an operations objective was the only way to compete in the market (Ng, Li 2010). From 1996 to present Galanz implemented a low-price strategy by repeatedly implementing cycles of price cutting and production capacity expansion (Ng, Li 2010). Further reinforcement of cost as the most important operational objective can be seen with Galanz’s strategy of escalating its production capacity through a free production line transfer, and using the same tactic to attract component suppliers to set up component production facilities in Galanz, which dramatically reduced production cost(Ng, Li 2010). Furthermore, the series of price wars with competitors over the years, and the repeated per unit price reduction allowed for Galanz’s domination of the market due in a large part to price as a top operational objective. This is clear evidence of cost being the most important operational objective for Galanz (Ng, Li 2010).


#2 Quality

Quality comes in number 2 on our list. In the beginning Galanz had adopted large-scale production to achieve low-cost efficiency and in the past the products were low quality with less variety, but eventually the Galanz realized the inherent connection between innovation and improved quality (Ng, Li 2010). Starting with the improved mechanical design of the magnetron in 2000 the research and development team improved many existing product structures, power supply specifications, and product appearances. Furthermore Galanz also started to vertically integrate its supply chain by manufacturing more of its components, which provides evidence of Glalanz’s commitment to quality as a more recent operational objective (Ng, Li 2010).


#3 Innovation

Innovation is the third most important operational objective for Galanz due to the close relationship between cost and innovation. As Galanz grew at a very rapid rate in the late 1990’s there was a problem with the supplying enough magnetrons for their microwaves, and the company realized that innovation was the smartest long term solution (Ng, Li 2010). With research collaboration they started to produce their own magnetrons starting in the year 2000, and Galanz’s magnetrons had improved mechanical design to enhance quality and function compared to Japanese competitors. This success pushed Galanz to invest significantly in R and D, which eventually developed into the Research Institute of Household Electrical Appliances (Ng, Li 2010). Galanz’s research institute is clear evidence of Innovation as high on our list of ranking Galanz’s operational objectives.


#4 Flexibility

Product flexibility as an operational objective was not always a priority for Galanz, but once R and D was pursued as a company strategy starting in the year 2000, the company leadership started to understand the value of product flexibility (Ng, Li 2010). The marketing manager of Galaz says it best, “In the old days we only followed the trend, but now we realize the importance of innovation. We now strive to localize our design to suit each target market (Ng, Li 2010).” This indicates product flexibility as recent operational objective for Galanz, but due to the recent nature of this operational objective it comes in at number 4 on our list.


#5 Delivery

Delivery is ranked at number 5 because of seeming inconsistency of this operational objective for Galanz. In the beginning the focus for product delivery was overseas down feather garment industry, then over time they started to change their product to microwaves sold only in China, then they expand their microwave market share overseas until in 2002 they reached 40% of the international market share (Ng, Li 2010). The constantly changing product delivery from foreign markets to domestic markets, then changing again to international markets seems to be evidence that delivery has not always been a top operational objective priority for Galanz.


#6 Service

Service comes in at number 6 on our list of operational objectives because up until recently there has been little focus on providing service to the customer once the microwave is sold in a foreign market (Ng, Li 2010). Customer support including after sales services, product repair and maintenance, handling of customer complaints and returns, and warranty claims required significant resources on Galaz’s part to train the corresponding staff and establish a platform to handle user requests, so until recently these were outsourced and not seen as a high ranking operational objective(Ng, Li 2010).





Stephen Ng, Barbara Li (2010) Operations strategy at Galanz, Ontario, Canada: Richard Ivey School of Business Foundation

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