How a small company in a small country goes global

Case Study on Giant Bicycles

By : Ranjit Brave Aman Chawla
08/12/11

Introduction to Giant Bicycles
Vision – “World’s best bicycle company”. Started as an OEM for global brands(SCHWINN

& TREK) Set up manufacturing plant in Netherland to enter European Market. Wholly owned subsidiaries in Germany, U.K, France. Started promoting own brands and continued servicing of OEM’s. Rapidly created Giant Japan, Giant Canada & Giant Australia. Took advantage of China.
 08/12/11

2 in China & 1 in the Netherlands)  10 subsidiaries which focus on marketing the Giant brand worldwide.  Giant currently has 4 manufacturing bases(1 in Taiwan .  08/12/11 . became the 3rd leading brand in Western Europe and 2nd in the United States.Contd…… Within 10 years .

China 1994 . Ltd.. Japan 1991 .Becomes Taiwan's Largest Bicycle Manufacturer 1981 . Australia 1992 . in Taiwan 1980 . 1997 .840.Establishes Chuansin Metal Products (Kunshan) Co.Establishes Giant Company Ltd.Establishes Giant Manufacturing Co.000 bicycles in a single year Ø 2006 .Establishes Giant Bicycle Inc.Establishes Giant Sales Company.Establishes Giant Europe BV.730.Giant becomes the world's largest quality cycle manufacturer 08/12/11 Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø Ø . Ø 2007 .. 1991 .Giant released accessories into the UK such as pumps.Acquires 30% share of Hodaka in Japan Ø 2002 ..Establishes Giant Co..Establishes European Factory.Manufactures 2.Manufactures 4. Canada.Establishes Giant Bicycles PTY Ltd. Inc. little apparel and luggage. China Ø 1998 . USA 1989 ...Goes Public on Taiwan Stock Exchange (TWSE: 9921) 1996 . Ltd. Taiwan 1986 . Netherlands 1987 .Time Line 1972 . Netherlands.Establishes Giant Bicycle Co.000 bicycles in a single year Ø 1998 . Ltd.

From casual single track to race specific downhill bikes.Training. advanced and professional road bikes are included in this group. Speciality . Comfort .Bikes designed for children.HALFWAY and the CLIP are the only bikes in this folding bike group. Mountain .Products Road .Includes bikes for various riding styles.Bikes designed for youth teens. Mode . Indoor Cycling .Indoor fitness bikes.A range of casual city bikes. Family Cycling .  08/12/11 .

63% 08/12/11 .73%  Bicycle parts – 22.5%  Electric bicycles – 1.14%  In-doors sport bicycles – 1.Proportion of Business Activities  All.road bicycles – 74.

08/12/11 .

Giant’s Entry Strategies…… 08/12/11 .

– wheels’  Giant’s business constitutes 28% of Taiwan’s total bicycle export.6% anti-dumping duties on Chinese bicycles.  Growth in market share as EU imposed 30.   08/12/11 .3% of EU’s imports ‘two production originate in Taiwan.In Europe  18.

reduced transport cost.  08/12/11  . better information.   Strategies Used : Setting up production plant and subsidiaries . no tariff. Such as closeness to market. Hiring local staff familiar with local market and language.Problems faced : Establishment of Single European Market(SEM) Advantages for domestic players. Gained immediate market share by tapping the emerging mountain biking market in Europe.

In U.S Problems faced : Reduction in orders by ODM customer(SCHWINN).S market. 08/12/11 1400 sales channels in the country.   Results : Gained 9.56% market share. Set up wholly owned sales subsidiaries.   Strategies Used : Speed up promotion of its own brand in U.  .

  08/12/11  .  Strategies Used : Changed Green field venture into a joined venture with Chinese biggest bicycle manufacturer. Produced low priced bicycles.local culture and local competition.In China Problems faced : Risks in a planned economy .  Results : Obtained 20% of china’s market in just 3 years. Practice “Guanxi”.

.Giant’s Advanced Manufacturing Techniques…. 08/12/11 .

 Giant Production System. forging process. fluid forming and press forming.  Advanced 08/12/11 . manufacturing techniques such as aluminum tubing production .Techniques Uses state of the art machinery & computer- enhanced management.Produce good quality bicycles with the facility of large scale manufacturing.

higher quality .  “Global Sourcing– Decentralized Strategy”- lower cost.  08/12/11 .  Owns two component – manufacturing plants in Taiwan and China which provides unique components to Giant.Sourcing Strategies  Integrates its suppliers to form a “central – satellite factories” system.  100 suppliers were linked by this system globally.

How the Giant Sells…. 08/12/11 .

Regional offices collect . Worldwide headquarters takes care of brand management . Uses global strength and caters to local demand by employing designers and marketers that are unique to the country they are serving. High coordination between local subsidiaries and headquarters. product R&D & global marketing. Local Touch” approach. “Global Giant .  08/12/11 . analyze & react to local needs.Marketing Strategy Global Corporation with regional sales & marketing in 60 countries.

  08/12/11 . China. Rune Hoydahl.10 international wins. Australia. Myles Rockwell .  Achievements of Giant Riders: Laurent Jalbert – World no.World Downhill Championship. Japan .S. U. 1 road ranking champion.Brand Management Sponsorship of professional and amateur cycling team at international and regional levels. Sponsors national teams such as Taiwan .

Top Competitors Accell Group  Specialized Bicycle Components  Cannondale Bicycle Corporation  Kona Bicycle Company  Trek Bicycle Corporation 08/12/11 .

08/12/11 ..R&D and Innovation Strategy….

These offices only generate ideas according to local needs and then transfer to the center(Taiwan).  08/12/11 . Innovation by Giant.Carbon fiber bicycle frame. Giant Morph/ FlexX.Highly committed to new innovations. Later. Compact Road Design. Hybrid Cycling Technology. to cater the rapid changes Giant set up local R&D support centers. Maestro Suspension. In early stages Giant centralized R&D to reach economy of scale. Carbon Composite MCR cycle.

Maestro Suspension Compact Road Design Trinity Advanced SL Hybrid Cycling Technology 08/12/11 .

08/12/11 .Analysis…..

Porter’s Five Force 08/12/11 .

SWOT Analysis… N e g a ti ve I te rn a lFa cto rs n Technological Skills Leading Brands Customer Relationship Production Quality Management j E xte rn a lFa cto rs Changing Customer Taste Technological Advances Changing Demand Conglomerate 08/12/11 ti Po si ve S W Leak in R&D New Technology Increase Competition Government Regulation O T .

08/12/11 .

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