A Case Study on the Global Distribution and Coordination of Transnational Business

The onset of global competition has resulted in greater pressures for firms in traditional industries. Firms in developed countries have competed with firms in undeveloped countries for some time, but have traditionally relied on a technological advantage to remain competitive. However, given the maturation of technology in traditional industries, those firms must address the inherent cost advantage afforded those firms operating in an undeveloped country. Firms have responded by internationalizing their operations, and now must deal with fierce competition in prices as well as responses to different local needs. How firms retain an efficiency advantage after integrating themselves into this international scene and how they respond to local differences is the most important issue currently discussed by international business.
This research is rooted in the Taiwan bicycle industry, and examines the distinct comparative advantages of local firms. Against this background we examine the case of GIANT, which possesses five percent of global bicycle market share. We will seek to understand how GIANT could acquire local advantages such as integrated efficiency and proper local responses through its processes of organization coordination and its multinational operation arrangement.
We use Porter's diamond model to analyze the Taiwan bicycle industry. This allows us to know the industrial upgrading process and its comparative advantages. The configuration-coordination model helps us explain Giant’s multinational operation shape. Finally, we discuss Giant’s synergy from simultaneously implementing different OEM/ODM and OBM strategies.
This research demonstrates that Giant accrues a competitive advantage from its multinational operations, the transformation of organization integration and the coordination surrounding its international strategies change point. We also offer differentiating and other related international strategies in IBD channel for the entire bicycle industry, as well as solution to conflicts between OEM and OBM operation and its existing synergy.