Microwave Oven and Brand Image

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Operations Strategy at Galanz- One Page Summary

Background
Galanz is the world leader in selling microwave ovens with 60% of the domestic market and 44.5% of the international market in 2003. The company was founded in 1978 by Liang Qingde. Its headquarters are located in Shunde, China. In 1991 it bought the blueprints and production lines of Toshiba’s microwave ovens and made its first microwave in 1992. In 1995 Galanz replaced Shell electric as the leading microwave manufacturer in China. The next year Galanz started a six year price war and Toshiba and Panasonic had limited the magnetron supply. In 1997 the company started developing its own magnetron and finally in 2003 the company finally received some recognition in the overseas market. Internal Analysis

A strength to Galanz is its position in the domestic market. It is the largest company with a large customer base and a well known brand. It has developed its supply chain which is vertically integrated and this is also a key strength. As the company grew the importance of innovation and developing its own R&D became more and more apparent and this is a strength. Weaknesses to Galanz are its low brand awareness in the international markets and poor management structure which is highly centralized. The company also overlooks data records and codes of practice which is a large weakness because it shows poor management and commitment to ethics. The final weakness would be its conflict between the R&D department and production departments. Since this can slow down production and innovation. Galanz uses a low cost strategy but also tries to incorporate product innovation. External Analysis

Now that Galanz creates most of its own parts (about 90%) for its microwaves it has great opportunity in increasing its R&D and producing highly innovative products. It also has opportunity to improve on its brand image in the international market and gain more market share. A threat to...
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