Case Study Description of Operations Strategy at Galanz
Starting from a humble beginning of being a manufacturer of down feather products owned by Shunde Township, Galanz Enterprises Group Co. Ltd. (Galanz) had transformed itself into a world class manufacturer of microwave ovens producing about 50 per cent of the global output in 2003. This case describes the competitive and operational strategies that Galanz used to achieve such a meteoric growth. The company started out with a clear competitive strategy based on cost leadership. It designed and implemented operations system to help achieve lower cost through economy of scale, the transfer of production capacity from developed countries and full utilization of the available production capacity.The case aims to: 1. introduce students to the concepts of order winner, order qualifiers, operations priorities/objectives. 2. show how operations priorities should reflect customer requirements and affect the way a company wants to compete. 3. demonstrate how a company can gain competitive advantages through low cost strategy and how to support business strategy using operations strategy and capabilities. 4. show students how a company can build multiple capabilities over time and how a company's strategy and operational capabilities can change over time. 5. provide students with the opportunity to analyze trade-offs involved in making strategic, operational and marketing decisions as a business expands from the domestic to the global market and from OEM to ODM and OBM. 6. challenge students to develop coherent action plans that address future growth objectives. 7. help understand the tremendous opportunities and challenges of managing operations and supply chain activities in China.
Authors :: Stephen (Chi Hung) Ng, Barbara Li, Xiande Zhao, Xuejun Xu
Swot Analysis of "Operations Strategy at Galanz" written by Stephen (Chi Hung) Ng, Barbara Li, Xiande Zhao, Xuejun Xu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Galanz Operations facing as an external strategic factors. Some of the topics covered in Operations Strategy at Galanz case study are - Strategic Management Strategies, Entrepreneurship, International business, Manufacturing, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Operations Strategy at Galanz casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, there is increasing trade war between United States & China, wage bills are increasing,
central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Operations Strategy at Galanz
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Operations Strategy at Galanz case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Galanz Operations, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Galanz Operations operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Operations Strategy at Galanz can be done for the following purposes –
1. Strategic planning using facts provided in Operations Strategy at Galanz case study
2. Improving business portfolio management of Galanz Operations
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Galanz Operations
Strengths Operations Strategy at Galanz | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Galanz Operations in Operations Strategy at Galanz Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Galanz Operations is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Galanz Operations in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Galanz Operations digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Galanz Operations has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Galanz Operations has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Galanz Operations has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Strategy & Execution industry
– Operations Strategy at Galanz firm has clearly differentiated products in the market place. This has enabled Galanz Operations to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Galanz Operations to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Operations Strategy at Galanz Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Galanz Operations in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Galanz Operations in the sector have low bargaining power. Operations Strategy at Galanz has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Galanz Operations to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Galanz Operations is one of the most innovative firm in sector. Manager in Operations Strategy at Galanz Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Galanz Operations is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stephen (Chi Hung) Ng, Barbara Li, Xiande Zhao, Xuejun Xu can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Galanz Operations has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Galanz Operations to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Galanz Operations has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Operations Strategy at Galanz HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Galanz Operations are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Operations Strategy at Galanz | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Operations Strategy at Galanz are -
Capital Spending Reduction
– Even during the low interest decade, Galanz Operations has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Galanz Operations has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Galanz Operations products
– To increase the profitability and margins on the products, Galanz Operations needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Operations Strategy at Galanz that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Operations Strategy at Galanz can leverage the sales team experience to cultivate customer relationships as Galanz Operations is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Operations Strategy at Galanz HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Galanz Operations has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Galanz Operations has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Galanz Operations even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Galanz Operations has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study Operations Strategy at Galanz, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Galanz Operations, firm in the HBR case study Operations Strategy at Galanz needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Galanz Operations is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Operations Strategy at Galanz can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Galanz Operations is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Galanz Operations needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Galanz Operations to focus more on services rather than just following the product oriented approach.
Opportunities Operations Strategy at Galanz | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Operations Strategy at Galanz are -
Learning at scale
– Online learning technologies has now opened space for Galanz Operations to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Galanz Operations has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Operations Strategy at Galanz - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Galanz Operations to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Galanz Operations can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Galanz Operations in the consumer business. Now Galanz Operations can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Galanz Operations can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Operations Strategy at Galanz, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Galanz Operations can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Operations Strategy at Galanz suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Galanz Operations can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Galanz Operations can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Galanz Operations can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Galanz Operations can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Galanz Operations can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Galanz Operations to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Low interest rates
– Even though inflation is raising its head in most developed economies, Galanz Operations can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Galanz Operations can use these opportunities to build new business models that can help the communities that Galanz Operations operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Operations Strategy at Galanz External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Operations Strategy at Galanz are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Galanz Operations needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Environmental challenges
– Galanz Operations needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Galanz Operations can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Galanz Operations is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Galanz Operations can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Operations Strategy at Galanz .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Galanz Operations will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Galanz Operations in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Galanz Operations demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Galanz Operations needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Galanz Operations can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Galanz Operations high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Operations Strategy at Galanz, Galanz Operations may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Operations Strategy at Galanz Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Operations Strategy at Galanz needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Operations Strategy at Galanz is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Operations Strategy at Galanz is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Operations Strategy at Galanz is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Galanz Operations needs to make to build a sustainable competitive advantage.