It is true that adoption of cost leadership strategy helped Galanz to gain effective market share growth rate in the Chinese market as it helped to reduce the overall production cost and offer the products at the economic price level in a Chinese market. But, it is also important for the organization to integrate differentiation business level strategy in order to develop a strong customer base in the global marketplace. It can help the organization to meet the current market demand in global marketplaces i.e. demand for high quality differentiated products in economic price. Therefore, it is important for the organization to change its overall cost leadership business level strategy.
It is true that the organization is enriched with significant business operation resources as the organization has the ability to perform effectively in global marketplaces. It is important for an organization to ensure effective customer service and high brand image in the global marketplace. Therefore, it is important for the organization to invest some amount of its business profit in promotional activities and customer service management process in order to gain potential competitive advantages in global marketplaces.
Mr. Liang understood the growing market demand for microwave ovens in China during the visit to Japan in the year 1991. But, implementation of premium pricing strategy by the leading multinational market players is forcing the people of middle class and lower-middle-class income group to avoid the consumption of microwave ovens. Adoption of cost leadership strategy helped the organization to reduce per unit production cost. Therefore, the demand for Galanz microwave oven started to grow in China.
Adoption and implementation of cost leadership strategy helped the organization to reduce the price of the microwave.