Galanz's "Two-Faced Strategy"

"Galanz's 'Two-Faced Strategy'" is an in-depth interview by Ling Zi, a reporter for the magazine Sino-Foreign Management, with Yu Yaochang, then deputy general manager of the Galanz Group. It has often been used by business schools and training institutions as a case study in SME strategy. The article's core finding is that Galanz has "two faces." In the domestic market, its years of steep, repeated price cuts earned it the name "price butcher," sharp and aggressive; in overseas markets, it calls itself an "ascetic," doing OEM work for multinationals and relocating their production lines, low-key and self-effacing. The author asks: on what grounds can these two seemingly contradictory faces both hold true? Yu Yaochang's answer comes down to six words: "scale and specialization." The interview unfolds around several key moments: in 1993 Galanz cut its traditional down and woolen textile businesses and bet everything on entering the microwave oven industry; from 1996 it cut prices to the floor in one stroke in the price war, trading price cuts for market capacity, then using expanded capacity to dilute costs, ultimately building a barrier out of cost; around 1998 it became the world's number one in microwave ovens; in 2000 it entered the air-conditioning industry with 2 billion yuan, attempting to replicate the "take-it-and-use-it" path. The text focuses on Galanz's "moving production lines" style of OEM work: rather than equity acquisitions, it moves foreign brands' production lines wholesale into China, producing for the other party while also using overflow capacity to make its own products, trading intangible assets for ready-made markets. In addition, the interview touches on the capital operation logic of insisting on not going public, as well as the risks of single-category dependence and the boundaries of diversification. The full text is not long, yet it strings together price wars, cost structure, OEM versus own brands, and the opportunities of industrial transfer into a complete chain, making it a classic slice for studying the low-cost expansion model of "Made in China."