Case Study on Giant

Bicycles
How a small company in a small country
goes global

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
Contd……
Within 10 years , became the 3rd leading brand
in Western Europe and 2nd in the United
States.

Giant currently has 4 manufacturing bases(1 in
Taiwan ,2 in China & 1 in the Netherlands)

10 subsidiaries which focus on marketing the
Giant brand worldwide.

08/12/11
Time Line
Ø 1972 - Establishes Giant Manufacturing Co. Ltd. in Taiwan
Ø 1980 - Becomes Taiwan's Largest Bicycle Manufacturer
Ø 1981 - Establishes Giant Sales Company, Taiwan
Ø 1986 - Establishes Giant Europe BV, Netherlands
Ø 1987 - Establishes Giant Bicycle Inc., USA
Ø 1989 - Establishes Giant Company Ltd., Japan
Ø 1991 - Establishes Giant Bicycle Co., Canada, Inc.
Ø 1991 - Establishes Giant Bicycles PTY Ltd., Australia
Ø 1992 - Establishes Giant Co. Ltd., China
Ø 1994 - Goes Public on Taiwan Stock Exchange (TWSE: 9921)
Ø 1996 - Establishes European Factory, Netherlands.
Ø 1997 - Establishes Chuansin Metal Products (Kunshan) Co. Ltd.,
China
Ø 1998 - Manufactures 2,840,000 bicycles in a single year
Ø 1998 - Acquires 30% share of Hodaka in Japan
Ø 2002 - Manufactures 4,730,000 bicycles in a single year
Ø 2006 - Giant released accessories into the UK such as pumps, little
apparel and luggage.
Ø 2007 - Giant becomes the world's largest quality cycle manufacturer
08/12/11
Products
Road - Training, advanced and professional
road bikes are included in this group.
Mountain - Includes bikes for various riding
styles. From casual single track to race
specific downhill bikes.
Comfort - A range of casual city bikes.
Mode - Bikes designed for youth teens.
Indoor Cycling - Indoor fitness bikes.
Family Cycling - Bikes designed for children.
Speciality - HALFWAY and the CLIP are the only
bikes in this folding bike group.

08/12/11
Proportion of Business
Activities

All- road bicycles – 74.14%

In-doors sport bicycles – 1.5%

Electric bicycles – 1.73%

Bicycle parts – 22.63%

08/12/11
08/12/11
Giant’s Entry
Strategies……

08/12/11
 In Europe

18.3% of EU’s imports ‘two – wheels’
production originate in Taiwan.

Giant’s business constitutes 28% of Taiwan’s total
bicycle export.

Growth in market share as EU imposed 30.6%
anti-dumping duties on Chinese bicycles.


08/12/11
Problems faced :


Establishment of Single European Market(SEM)

Advantages for domestic players. Such as closeness to
market, better information, no tariff, reduced
transport cost.

Strategies Used :


Setting up production plant and subsidiaries .

Hiring local staff familiar with local market and
language.
Gained immediate market share by tapping the
emerging mountain biking market in Europe.
08/12/11
In U.S
Problems faced :


Reduction in orders by ODM

customer(SCHWINN).

Strategies Used :


Speed up promotion of its own brand in U.S

market.
Set up wholly owned sales subsidiaries.

Results :
Gained 9.56% market share.
1400 sales channels in the country.
08/12/11
In China
Problems faced :
Risks in a planned economy ,local culture and local
competition.

Strategies Used :

Changed Green field venture into a joined venture

with Chinese biggest bicycle manufacturer.
Practice “Guanxi”.
Produced low priced bicycles.

Results :

Obtained 20% of china’s market in just 3 years.

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

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

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

08/12/11
 Marketing Strategy
Global Corporation with regional sales &
marketing in 60 countries.
“Global Giant , Local Touch” approach.
Regional offices collect , analyze & react to local
needs.
Worldwide headquarters takes care of brand
management , product R&D & global marketing.
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.
08/12/11

Brand Management
Sponsorship of professional and amateur
cycling team at international and regional
levels.
Sponsors national teams such as Taiwan ,
Japan , China, U.S, Australia.


Achievements of Giant Riders:



Laurent Jalbert – World no. 1 road ranking

champion.
Rune Hoydahl- 10 international wins.
Myles Rockwell - World Downhill Championship.

08/12/11
Top Competitors
Accell Group

Specialized Bicycle Components

Cannondale Bicycle Corporation

Kona Bicycle Company

Trek Bicycle Corporation

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

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

Trinity Advanced SL Hybrid Cycling Technology

08/12/11
 Analysis…..

08/12/11
Porter’s Five Force

08/12/11
SWOT Analysis…
N e g a tive
Po sitive

Technological Skills
Leading Brands
In te rn a lFa cto rs

Customer Relationship

S
Production Quality
Management j
W

Changing Customer Leak in R&D

E xte rn a lFa cto rs

Taste New Technology

O T
Technological Increase Competition
Advances Government
Changing Demand Regulation
Conglomerate

08/12/11
08/12/11