1. What has contributed to the success of Galanz?

In one phrase economies of scale. Galanz set unit price along the curvature of their growth. This practice allowed them to achieve incredible margin in the domestic market. Contributing factors in achieving economies scale were incredibly cheap labor costs, low land cost, and relaxed labor law in china, which enabled them to operate their factory on a three shift twenty four hour basis. Another interesting tactic used by Galanz was production line transfer, which allowed them to use excess components of an OBM for development of their own products. Galanz has also been successful in merging their production line, thus creating leaner and more standardized production lines. Later the company was successful in developing their own magnetron, which ushered in a new era of production growth. With growing production Galanz has been able to aggressively cut prices, which has enabled them to drive foreign competitors out of the Chinese microwave market.

2. What the order qualifier factor and order winner factor? The Order Qualifying and winning factors of the manufacturers who are producing componenets parts for their manufacturers are noted in the table below. Order winning factors has been determined with Galanz Corporation in mind. Order Qualifiers Cost of production Increased Capacity Timely and Efficient completion of components Order Winners Cost of production

Quality of the components High turnover rate Low uncertainty

3. Should Galanz have evolved from being an OEM to being an OBM? Is Galanz structured compete as an OEM? Why or why not? To sustain its growth and realize its vision it was essential for Galanz to become an OBM. By 1998 Galanz had more than half of the market share in the domestic market through the excess inventory that they were generating through production line transfer concept.

4. Should Galanz continue to expand its capacity through outsourcing arrangements? How does its pursuit of outsourcing align with its operations strategy?