Summary
Galanz evolved from a Chinese township enterprise to become the world’s number one microwave oven manufacturer in six years through an aggressive price war strategy and capacity expansion. Can Galanz now replicate its rapid growth model in other home appliance categories such as air conditioners, rice cookers, and refrigerators?
Teaching objectives
This case studies the contexts in which a bold price war and capacity expansion strategy can be effective. It analyses (1) the competitive advantages of Chinese low cost manufacturers, (2) the competitive dynamics between multinational branded companies and Chinese OEMs and among Chinese emerging global players, and (3) the challenges of transforming a world-leading plant to a world-leading brand.
Keywords
- Price war strategy
- Capacity preemption
- Emerging market
- OEM
- Microwave oven
- China
- Low cost
- Competition
- Q21415
