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han competitors, but Galanz often is 30% lower than other manufacturers. This at least initially will attract a large number of new customers. From 1995 to 2000, Galanz triggered five price wars in China, which consolidated its position in the local market and in the production and market in 1998 was promoted to become the world's first. Galanz takes full advantage of the competitive advantage of low-cost strategy, promoting its first success in the Chinese domestic market and then beats the opponent to enter the international market. Low-cost makes Galanz launched its price war to competitors.

   Critical resources to support Galanz’s low-cost strategy
      The microwave oven cost is consisted of raw materials, components, equipment depreciation and labor cost. In these components, although it can be through the number of scale purchasing and bargaining to achieve a relatively low cost, it is not free manipulation by Galanz. Also because of its high yield, equipment depreciation will be lower than peer competitors.
      But for the labor cost, its advantage is quite clear. Guangdong has a large floating population of workers. This contributes to Galanz’s early success. This advantage not only comes from the workers, but also is from the technical staff resources. Statistics show that from 1992 to 1994, about 300,000 graduates with post-secondary degree in engineering technology choose to go to the talent market. Furthermore, due to Galanz’s monthly wages over the same period compared to other vendors are twice (China https://www.51lunwen.org/sampleenglishpaper/ Year Book, 1995), graduate students still preferred choosing Galanz. But compared with the labor force in developed countries, it was only an average 5%. So Galanz was selected as the supplier of OEM products.

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