Order qualifiers refer to the basics that a product must have before a customer makes a purchase; order winners are the distinguishing characteristics that make a product stand out and thus attract more customers than the competition (Boyer and Vermar, 2010). Operations personnel are responsible for providing the order qualifying and the order-winning criterion, as identified through market research. The process of determining order winners and order qualifiers enhances the ability to meet customer demands in the marketplace. Competitive capabilities are driven by client, product specifications (Boyer and Vermar, 2010). In the production of electronic appliances, some of the qualities that make a product stand out include process automation, product design, next-generations technology, capital and communication. In this paper, I am going to base my study on Galanz to identify its competitive capabilities (that is order qualifiers and order winners) and assess the level of alignment between its marketing and operations strategy.
Galanz Group Ltd is a Chinese company established in the year 1978 by an individual known as Laing Qingde (Ng and Li 2010). The company produces household electronic appliances. Its headquarters are in Foshan Guangdong (Ng and Li, 2010). Galanz started by producing only ten thousand microwaves in the starting years. Its expansion was rapid and currently the company is the world’s biggest producer of microwaves, producing 1 in every 2 microwaves in use today (Gu, 2006). The company has also ventured into the production of air conditioners in the recent years.
Previously, Galanz procured all its main components required to make microwaves (magnetrons) from foreign sellers such as Panasonic and Toshiba (Ng and Li, 2010). However, the company’s rapid development threatened the magnetrons sellers, who were also in the same business of making microwaves (Ng and Li, 2010). To restrain the competition, these sellers decided to lower the supply of magnetrons to Galanz. As a result, Galanz decided to invest mainly in R&D. Eventually, in the year 2000, Galanz succeeded in designing and manufacturing its own magnetrons that supported the production of microwave ovens (Ng and Li, 2010). However, Galanz had no competitive technology edge by that time. It could not achieve the 25 million magnetron units required annually. It was only capable of producing 16 million, which was 67% of the overall requirement (Gu, 2006). Therefore, Galanz still had to outsource the production of magnetrons to other OEM “Original Equipment Manufacturers.” By this time, the only strategy for Galanz to compete in the market was by offering lower prices (Ng and Li, 2010).
The company progressively mastered the process of magnetrons design and production hence it transformed from an OEM to ODM “Original Design Manufacturing” company. Since then, Galanz has functioned using the OBM “Original Brand Manufacturing” approach in the Chinese marketplace and combining ODM and OEM approaches in the foreign markets. In the recent past, Galanz OBM business has begun to go through development in the foreign markets due to increased recognition of its products (Kotler, Keller & Lu, 2009).
The capability of Galanz to produce microwaves at a low price, together with its improved R & D enabled it to compete effectively with rivals such as Toshiba, LG and Panasonic (Ng and Li, 2010). The organization’s products are popular overseas and in China and have made the company attain the top position in the production of microwaves, with over 50% of the world’s microwave market share (Ng and Li, 2010). Both ODM and OEM products were sold in markets all over the world, thus increasing the company’s revenue to RMB18 billion from RMB2.96 billion (Ng and Li, 2010). For any company to succeed in its line of the business and gain a position in the market, it should investment well in its R&D, and its operational personnel should make sure that they provide products with the best designs and technologies at a low production cost.
References
Boyer, K. K. and Vermar, R., 2010. Operations & supply chain management for the 21st century. Mason, Ohio, South-Western/Cengage Learning
Gu, G. Z., 2006. China’s global research: markets, multinationals and globalization. Palo Alto, Fultus Corp.
Kotler, P., Keller, K. L. and Lu, T., 2009. Marketing management in China. Singapore, Pearson Prentice Hall.
Ng, S. and Li, B., 2010. Operations Strategy at Galanz. Richard Ivey School of Business Foundation.
