Strategic Management

Decent Essays
1. What lead to the success of Galanz company? Please analyse the company form the perspectives of competitive strategy and operations strategy?

The early success of Galanz can be prescribed to its ability to deploy its resources in an effective manner and establish itself as a recognized brand in its domestic market through a consistent competitive strategy of Cost Leadership (Porter ). Their competitive edge was initially their low land and labour cost, while knowledge in production technology was yet lacking, but utilizing this competitive edge allowed them to serve their domestic (heavily growing) market at a cheaper consumer price than their competitors. Their operations strategy underpinned their competitive strategy and
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Priorities should thus be set as follows:
1. OBM
2. OEM
3. ODM

Galanz has gained capabilities within the production technology areas due to their R&D efforts to ensure sustainable competitive advantages in cost of production, and they can rely on a pull strategy from the consumers with their increasing brand recognition. The low cost strategy is what has brought them the success, so the low cost orientation should be emphasized throughout the operations, but with the many more production lines the low cost can only be a part of their pricing strategy; they will need to differentiate. For their domestic market they will need to ensure that they hold on to their original identity as the low cost brand (as the domestic markets demand yet primarily bases on the low-end products) and thus have the largest scale of production compared to competitors as that allows them to charge lowest prices. At the same time they will need to set prices on their other production lines accordingly to the amount of produced items, as quantity for a large part is what determines the production costs. The transformation to a World Brand also means that they should have a better connection to the end-consumer and their needs and demands, and as their domestic market experiences tremendous growth in income per capita, while their overseas markets experiences more stable growth rates, the consumer needs will probably align more and more. This alignment
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