What Is Role of Technology Has Played in the Success of Galanz?
What is role of technology has played in the success of Galanz?
The microwave oven market in the 1980s was in its infancy in China, where competition and demand size were small. Only a few foreign brands such as Toshiba, LG and Whirlpool were in the market and they had no clear intention to expand and dominate because they had not yet sensed the market potential, due in part to their lack of familiarity with the rapidly evolving Chinese market environment. Besides, the high price of their microwave ovens was unaffordable to most Chinese consumers.
On the technology side, it was less risky to invest in the technology associated with microwave ovens because this technology had been mature and stable since Americans first invented the microwave oven in the 1950s. Though Japan, a new player in microwave ovens, later advanced the production of the magnetron tube and power supply in the subsequent decade, resulting in a tremendous cost reduction, the overall technology of microwave ovens did not differ much from that of its original design.
Despite the technical ease of producing microwave ovens, starting a microwave oven production business in China was not without obstacles due to the lack of associated technology and technical expertise at home. While many Chinese entrepreneurs at the time saw the market opportunity in microwave oven production in China, only Liang Senior had the determination to work to overcome the business challenges.
Liang Senior understood that Galanz had to import equipment and technology from overseas. Thus, in the early 1990s, he purchased the microwave oven production blueprint for USD$300,000 from Toshiba, then the world leader in microwave oven production equipment and technology. He also searched for engineering professionals throughout the country to set up the factory. At last, he found a group of engineers from Shanghai No. 8 Radio Factory who were knowledgeable of microwave oven technologies to help him. These engineers were still working with Galanz after 25 years, serving in senior positions in the technical supervision of microwave oven production.
In 1992, Galanz produced its first microwave oven, the factory opened and the company officially changed its name to Guangdong Galanz Enterprises Group Co. Ltd. In 1993, the first batch of 10,000 microwave ovens was produced. In 1995, Galanz sold 250,000 microwave ovens in China, representing 25.1 per cent of the domestic microwave oven market, and overcame Shell Electric (later acquired by Whirlpool) as the