1. What are Galanz's competitive and operations strategies?
Considering the expertise of international players like Panasonic and Toshiba, Galanz didn't really have a competitive advantage with respect to technology. Cost arbitrage (of land and labor) was the chief competitive strategy employed by Galanz to capture the Chinese microwave market. Galanz conjured up mutually beneficial deals with its clients to achieve rapid expansion of production capacity by arranging for production line transfers, process and quality enhancements. Also, the non-stop production by Galanz could not be matched by any other competitor. Thus, Galanz achieved domestic microwave market dominance by employing a dirt cheap pricing strategy which was attractive to the cost sensitive Chinese market and expanding its production capacity to exceed the market demand.
However, these strategies alone could not satiate the requirements of the overseas market. Due to the risks involved in launching a Chinese product in the international market, Galanz entered the overseas market as an OEM supplier. Collaboration with large retailers such as K-mart and Wal-mart facilitated the successful entry of Galanz in the international market. The low cost, high production was maintained by Galanz through cheap labor and large production ability. The popularity of this Chinese brand rose in the overseas market due to its consistent efforts in maintaining low cost and high supply.
The success of the international OEM brand gave Galanz the leeway it required to start thinking about overseas brand building. Galanz started off its OBM venture by introducing Galanz branded microwaves to its OEM customers. Galanz further pushed its efforts in gaining worldwide recognition by investing in a