Galanz

Q5: What should Mr. Liang do to lead his company to greater success? Should the company change its overall cost leadership strategy? How should the company set priorities and utilize its resources and capitalize to gain competitive advantages in the market place?

Having established itself as a major player in the global market, Galanz now has more resources and expertise to probe even further in the international level, in order to lead the company to greater success. At this stage, Galanz could possibly execute a Joint Venture agreement or even venture into wholly-owned subsidiary types of international expansion to reap even greater profit. The company may not grow rapidly in the coming years if it stays as being an OEM exporter. While its OEM partners received global recognition. Galanz as a brand remained somewhat unfamiliar outside of China market. Galanz needs to further market its brand globally in order to grow further.

One possible solution is to setup a link Joint venture with another house appliances manufacturer. The best option is forming a link Joint venture with GE. The terms of the Joint venture can be structured such that Galanz will manufacture the products while GE will utilize its existing distribution network to market the products. The new products fabricated will carry both Galanz and GE brand. Galanz could be willing to accept a lower equity proportion in the Joint venture firm because forming a strategic alliance with GE is an instant path for Galanz to gain global brand recognition.

Should GE rejects this proposition, Galanz can retaliate by approaching other companies (GE’s competitor, e.g. Sharp, Panasonic) to try to form a joint venture, while at the same time proposing to terminate its OEM contract with GE.

Forming a Joint venture presents several advantages to Galanz. It provides a quicker way of going global and a surer market than opening a wholly-owned subsidiary abroad. Moreover, Galanz brand will be exposed to a...