Indian Institute of Management, Ranchi

Strategic Operation Management

ID

Name

PGEXP/019/2013

Bharat Bhushan

PGEXP/057/2013
PGEXP/063/2013

Prasanta Kumar Pattnaik

Rajesh Dhiman

CaseNo:04 - Operation Strategy at Galanz

Case Submission Date: 10-Jan-2015

Post-Graduate Executive Programme in Management

PGEXP (2013-15 Batch)

About Galanz
Founded in 1978 by Liang Senior, as a n enterprise dealing in
down feather products

Obtained export quota in 1992 in China which was restricted.

Thereby obtaining export volume by more than RM B 23 million

The management decided to diversify due to projected weak

future. Produced first Microwave oven in 1992

By 1995, Galanz captured 25.1% of domestic microwave oven

market

Challenges for Galanz- Teves and Strategy

Difficult in
handling cultural
difference in
overseas market

Should adopt
global market
strategy

Execute a
joint venture

Low Brand
Awareness in
Foreign market

Partnership
with MNCs
like Wal-Mart
& K-Mart
Much
investment
has been
made
towards
brand
management
and also
effecting PR
management

Conflict of
interest of OBM
and OEM
business

Antitrust(Anti
monopoly)
lawsuit

Inefficient
Production
planning

Outdated
Organizational
Structure

Setup sales &

service business
either on its own
or through its
channel partner,
This could lead to
becoming
competitor to its
OEM customer

Investment in
R&D and
import of new
technologies
allowed to cost
reduction and
differentiation

Strived to
producing
more than
demand

Better
allocation of
resources

Future competitive
strategy for the
combination of
OEM(Original
Equipment
Manufactures),OD
M(Original Design
Manufacturer and
OBM(Original Brand
Manufacturer)

Implement
efficient
production
planning
systems

Should adopt
decentralized
decision
making system

Shift towards
product
oriented
process.

May concentrate on a
certain part in the
value chain and form
strategic alliance to do
sales production, R&D
and market together

Internal conflicts
and communication
gap should
observed between
different
departments

Customization
production
capabilities and
capacity
challenges for
magnetron
production
Incase
increase in
demand :
Outsourcing
of
Magnetrons

Vertical
relationship to
adopt for
magnetron
production.

Question - Answers
A> Rank the importance of Galanzs operations objectives of cost, quality, flexibility, delivery, service and innovations ?
1. Low price/cost
2. Flexibility
3. Quality
4. Innovation
5. Service and Delivery
B> What are Galanz competitive and operations strategies, and how does its operations strategy support its competitive
strategy?
Ans:
=> Competitive Strategies
Low price of Microwave Oven **
High quality
=> Operation Strategies :
24/7 working production line
Employees working 3 shifts in production line
**Economies of Scale gained by having low cost and large number of available labour helped Galanz to work for 24/7
working production line by which they are able to produce much lower price Microwave Oven with good quality

Question - Answers
3> What were the order winners/qualifiers for Galanz in the microwave oven business during the stage of its development?
Ans:
=> Order Qualifiers:
Quality
Delivery
Order Winners:
Low Cost
Low Price
4> Should Galanz develop its OBM business in the International market? Should Galanz continue its OEM/ODM businesses?
Ans:
=> Yes, Galanz should develop its OBM business in the international market. It help Galanz to get world recognized brand
image. It help to penetrate in other countries where Galanz is currently not present.
=> Yes, Galanz should continue its OEM/ODM businesses . These businesses help Galanz to get economies of scope. These
businesses did not require Galanz to invest in brand building thus high profit and Galanz can price Microwave oven at lower
side.