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The document discusses strategies for Galanz to continue its OEM and ODM businesses, how Liang can lead the company to greater success, whether the company should change its cost leadership strategy, and how the company should set priorities and utilize its resources to gain competitive advantages.

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24 views

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The document discusses strategies for Galanz to continue its OEM and ODM businesses, how Liang can lead the company to greater success, whether the company should change its cost leadership strategy, and how the company should set priorities and utilize its resources to gain competitive advantages.

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df
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2. What would you suggest to Galanz to continue its OEM and ODM businesses?

OEM and ODM businesses are thriving but to keep these running while creating a powerful brand is difficult
therefore, one option would be to have the OEM business only at a regional Asian market. Another possibility
would be to create another brand for the OEM/ODM market and focus on making the brand Galanz conquer its
place as a real LG, Toshiba competitor. Thus, this way Galanz could operate two global brands, Galanz itself in a
OBM mode and a second brand operating at an OEM/ODM model. The former more diversified and expensive
than the latter that would still beneficiate from economies of scale (marginal cost of production).

3. What should Liang do to lead his company to greater success?


First of all, Liang made Galanz a great success in the Chinese market, therefore he should not put in risk to lose it
and continue to maintain the same policy of OEM/ODM and OBM in the Chinese market. For the overseas
market, Liang must adopt a strategy that could match to the different customer needs. Since the foreign market
is more demanding, customers want a more customized product, therefore Liang should invest in making the
supply chain management more flexible. To do this Liang must increase the investment in R&D, which most
certainly would increase Galanz microwave ovens quality. Also, once the product will be more customized and
sophisticated, Liang should invest on commercial support focusing on before and after sales.
With microwave ovens more customized, Galanz will not be a competitor of K-Mart and Wal-Mart superstores,
thus Liang could in fact continue to supply them with the original low cost product. He will therefore make a shift
to a different segment of the market.
Additionally, Galanz doesn’t have yet the image of quality, so Liang should invest on the image too. First of all, he
must fight against the image of poor quality that the Chinese brands and products hold. To do that, he could
invest on comparative studies of performance with the other brands of the same market.
Finally, with this policy, Liang will not put in risk the leading position in the Chinese market, neither the supply of
the overseas superstores. Also, with the increase of investment in R&D, customer support and image, he could
have more probabilities to increase Galanz’s market share on the overseas market.

4. Should the company change its overall cost leadership strategy?


Reduced costs was the strategy delivering huge results to Galanz and placing it´s extraordinary results and
benefits, so we don´t think that changing this competitive strategy will benefit the company. Galanz depends on
OEM/ODM overseas big market purchases and big orders from their clients, relying on competitive margins to
operate on the pursuit of the best relation (value for money), therefore changing this characteristic that was the
base foundation of Galanz, will change all positioning of the brand. However, the strategy should predict a slowly
increase of product costs on higher quality components that deliver better reliability to the final product by
increasing perceived quality and recognition of the company overseas.

5. How should the company set priorities and utilize its resources and capabilities to gain
competitive advantages in the marketplace?
Galanz should maintain and upgrade the levels of final product perceived quality and accomplish the low prices
policy. The company should also develop a worldwide after sales strategy to ensure that the product brand
quality is maintained. Upgrade the corporative image by developing marketing strategies showing the
commitment in the best value for money relation. Galanz should also increase investments in R&D in innovative
and alternative products. These will ensure the current production lines are used to produce other equipment
(diversification of products), maintaining and lightly diversifying the current infrastructures. Additionally, Galanz
will be able to better respond to market changes on the concepts of customer demand. Finally, Galanz, should
increase the competitive advantages of knowing OBM in the domestic market and explore the sustainability
cycles of products/markets to the new and complex journey overseas. Also, Galanz should develop new relations
and partnerships with local brokers for each western country.

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