TEAM 1 | Jose Bravo, Bryan Henderson, Christina Hoff, Jose Quintana, Tim Robeson

WHAT IS GALANZ FACING? China’s 12 th 5 Year Plan Summary Economic Impact: “Higher Quality Growth” Strategic industries and innovation Sustainability and Environmental considerations Population and demographic shift Lower barriers for competition but more incentives for growth (IPO) Geopolitical risk

GALANZ STRATEGY DIAMOND Economic Logic Sequence Differentiators Arenas Vehicles How does Galanz move forward into the future? Strategic shift in organizational management structure to increase product value Refocus internal capabilities on key strengths (OEM & OBM) Overhaul operations to increase sustainable R&D and production Leverage domestic market and geopolitical environment Develop an efficient corporate foreign policy

ORGANIZATIONAL CHART Galanz Holding Co. Galanz InternationalGalanz MagnetronGalanz China

GALANZ STRATEGY DIAMOND - ARENAS Economic Logic Differentiators Arenas Staging Domestic China Division focused on OEM sales to price sensitive market segment, high volume, repetitive operations model International International Division focused on marketing and sales of OBM Galanz brand products globally to the high end of consumer market segment globally, with high volume, product operations model Vehicles

GALANZ STRATEGY DIAMOND - VEHICLES Economic Logic Differentiators Arenas Vehicles New plant Green investments Build in inland, Western regions New management structure Tiered and incentivized management structure International focus on customer service R&D capabilities Increased R&D; leveraging US R&D Center Strategic corporate foreign policy Reduce geopolitical risk Diplomacy approach Staging

GALANZ STRATEGY DIAMOND - DIFFERENTIATORS Economic Logic Differentiators Arenas Vehicles Trade-offs… what should Galanz give up? ODM- discontinue and subsume capabilities into OBM. Why? Custom design and mfg undermines high volume, economies of scale advantage of OEM and OBM business Custom ODM requirements cause ongoing synchronization issues between Operations and R&D Results in tight strategic alignment between OEM operations and Galanz China, and OBM operations and Galanz International How does Galanz differentiate from competition? Superior R&D What else? Staging

GALANZ STRATEGY DIAMOND - STAGING Economic Logic Differentiators Arenas Vehicles Sequence of execution Stage 1 — During Plant Construction Structural reorganizing of culture and management Creation of Galanz Holding Co. and subsidiaries New construction of plant Invest in sustainable R&D Stage 2 — New Plant Complete Hire new labor force Introduce new management structure Begin improved operations International Division focus Continued R&D for innovation in OBM Staging

GALANZ PRODUCT PROCESS MATRIX Rep Process Focus Repetitive Focus Product Focus Mass Customization Variety Volume Process Focus Repetitive Focus Product Focus Mass Customization Variety Volume Repetitive focus shift to combination of Repetitive and Process focus

GALANZ STRATEGY DIAMOND – ECONOMIC LOGIC Economic Logic Differentiators Arenas Vehicles Increased value creation through: Greater target market focus and operational efficiency through China and Int’l divisions that are supported by Galanz Holding Co. Increased economies of scale in manufacturing through elimination of ODM business and creation of Galanz Megatron, focusing on high volume production for OEM/OBM mkts Enhanced understanding of local market cultures and end user preferences will foster greater innovation in OBM product design and differentiation that will also benefit OEM manufacturing Staging

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