Executive Summary Gome Electrical Appliances: Competing for Channel Leadership Tell us a story about the legendary development of Gome Electrical Appliances. Its low-price sales strategy and countermeasures towards alliance price control on color television prices to maintain channel leadership. This case analysis identified two major problems with the market strategies adopted by Gome in the battle for channel leadership, provided two recommendations, and then analyzed the feasibility of the recommendations. General Highlights of Gome: Gome, founded by Huang Guangyu, in 1987 as a small shop selling only imported home appliances in Beijing. In 1996, following the emergence of national brands, Gome adjusted its operational structure and shifted its focus to domestically produced joint venture brands. Since the early 1990s, Gome has experienced rapid growth and established its leading position in the Chinese home appliance market. Gome has pursued an operational strategy of retail and low prices from the beginning. Dealing directly with manufacturers with guaranteed sales volumes, centralized purchasing and decentralized sales resulted in concessions and a higher level of discounts from suppliers and therefore low costs, which in turn contributed to lower retail prices and higher volumes of sale. Gome has established a positive cycle of capital and assets. Strike against price controls by the Color TV Price Alliance Realizing that the fierce price war in China's color television industry had resulted in increasingly low and unbearable profit margins, in 2000, some key members of the color TV industry Color TV The industry has entered into a pricing alliance aimed at quelling the price war and re-establishing its leadership in the home appliance value chain. In response to the price controls, Gome initiated its powerful strike by lowering the price of Prima's (an alliance member) color televisions to a level below the price set by the alliance. Consumer response initially confirmed Gome's low-price strategy, while the price control signal from the allied manufacturer, once again, was obviously aimed at Gome's provocative market strategy. Main problems for the low price strategy in the battle for channel leadership: 1) The consumption pattern has changed and the low price alone does not always work. With the intensification of competition in the home appliance market, Chinese consumers' consumption behavior was gradually becoming rational and mature. They would pay more attention to product quality and after-sales service, and the price factor was becoming less influential. To keep up with the times, focusing only on low price is not enough to maintain channel leadership. 2) Gome's provocative market strategy could come under attack from the supplier alliance and provide opportunities for competitors.