1. Expansion Plan WEMBA 16-Team 3

2. 五年计划 -5 Year Plan Economic Targets Economic Restructuring Innovation Environment and Clean Energy Agriculture Livelihood Social Management Reform

3. 我们的建议 (our Recommendations) 1. Strategy – Short & Long Term Objectives Prioritization of modes (OEM,OBM,ODM) – Transitions. 2. Government Relations 3. Environmental compliance opportunity 4. Domestic Market 5. Global Market 6. Capabilities 7. Execution

4. 建议 1 Strategy, Objectives, & Mode Transitions Transition from OEM to OBM globally in the long term. Continue to Supply OEM customers in the short term Seek reciprocity with government and provide a supportive role to its plans Protect Competitive advantages & Grow market share Secure Source of financing for upcoming capital investments. Develop new business opportunities. Maintain the economic logic of the firm.

5. Government Relations/Reciprocity What Galanz will get: Source of low cost financing Raise entry barriers for potential competitors – Licenses Protect Existing Patents Lower monopoly pressures Guarantee flow of exports Obtain exemptions to future regulations. What Galanz will give: Support Government Publicly Implement New Mandates Active hiring and volunteering Invest in the community, Education, & other institutions. Help Communicate Message for Social Stability Identify common goals 建议 2

6. 建议 3 Environmental Compliance Opportunity Invest in new machinery that meets new environmental standards and assists with eliminating inefficiency (R&D) Develop Products with specifications that would help government achieve its goals (R&D) Research alternative energy sources and their feasibility in relation to our cost structure, and pricing policy Create Image of Green and environmentally conscious firm (Marketing) Revise distribution channels and logistics to minimize carbon footprint

7. 建议 4 Domestic Market OBM Forecast Demand Increase Points of Sale – Keep up with Urban and population growth. Business Development Training – Product Knowledge Invest in Customer Relations. (Service, Support, Warranties, and After Sale actions) Locate these new services in rising population provinces such as Fujian Develop new business opportunities. Easy to replicate appliances to make in china. Adapt manufacturing needs to small and highly customized batches.

8. 建议 5 Global Market Transition to OBM Intentionally and methodically transition from OEM to OBM Strengthen relationship with MNCs through exclusivity agreements. Seek optimal product placement “In-store Real-estate”, & Joint promotions Keep aggressive pricing policy Identify key markets and invest heavily in Marketing & Brand recognition. Establish offshore offices to overcome cultural barriers Hire foreign new business developers for each market.

9. The Way Ahead-Execution Galanz cannot immediately abandon its competitive advantages-in this case our 24/7/365 OEM model Large investments will be required to configure the manufacturing process, and operating systems to minimize current inefficiencies, improve customization, and comply with environmental requirements New levels in the organization will be created. Middle management (translators) will be key to Galanz success. Needs to create synergies, economies of scale, and high level of customization for different markets Each market will have a different “willingness to pay” and Galanz will have to adapt, creating business unit strategies. Where to compete, how to compete and different strategy Executions. All these factor should be carefully analyzed to maintain a sound economic logic. WHERE TO COMPETE BUSINESS UNIT LEVEL STRATEGY EXECUTION HOW TO COMPETE