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Case Study on Giant
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Transcript of Case Study on Giant
04/10/2023
Case Study on Giant BicyclesHow a small company in a small country goes global
By : Ranjit BraveAman Chawla
04/10/2023
Introduction to Giant BicyclesVision – “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.
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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.
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Time Line 1972 - Establishes Giant Manufacturing Co. Ltd. in Taiwan 1980 - Becomes Taiwan's Largest Bicycle Manufacturer 1981 - Establishes Giant Sales Company, Taiwan 1986 - Establishes Giant Europe BV, Netherlands 1987 - Establishes Giant Bicycle Inc., USA 1989 - Establishes Giant Company Ltd., Japan 1991 - Establishes Giant Bicycle Co., Canada, Inc. 1991 - Establishes Giant Bicycles PTY Ltd., Australia 1992 - Establishes Giant Co. Ltd., China 1994 - Goes Public on Taiwan Stock Exchange (TWSE: 9921) 1996 - Establishes European Factory, Netherlands. 1997 - Establishes Chuansin Metal Products (Kunshan) Co. Ltd., China 1998 - Manufactures 2,840,000 bicycles in a single year 1998 - Acquires 30% share of Hodaka in Japan 2002 - Manufactures 4,730,000 bicycles in a single year 2006 - Giant released accessories into the UK such as pumps, little
apparel and luggage. 2007 - Giant becomes the world's largest quality cycle manufacturer
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ProductsRoad - 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.
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Proportion of Business Activities
All- road bicycles – 74.14%
In-doors sport bicycles – 1.5%
Electric bicycles – 1.73%
Bicycle parts – 22.63%
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Giant’s Entry Strategies……
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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.
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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.
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In U.SProblems 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.
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In ChinaProblems 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.
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Giant’s Advanced Manufacturing Techniques…..
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TechniquesUses 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.
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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 .
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How the Giant Sells….
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Marketing StrategyGlobal 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.
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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.
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Top CompetitorsAccell Group
Specialized Bicycle Components
Cannondale Bicycle Corporation
Kona Bicycle Company
Trek Bicycle Corporation
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R&D and Innovation Strategy…..
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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.
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Trinity Advanced SL Hybrid Cycling Technology
Maestro Suspension Compact Road Design
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Analysis…..
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Porter’s Five Force
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SWOT Analysis…
j
Inte
rnal
Fact
ors
Ext
ern
al
Fact
ors
Positive Negative
S W
O TChanging Customer Taste Technological AdvancesChanging DemandConglomerate
Technological SkillsLeading BrandsCustomer RelationshipProduction QualityManagement
Leak in R&DNew TechnologyIncrease CompetitionGovernment Regulation
04/10/2023