Global network
Currently, Giant's operating strategy calls for brand-name sales to account for 70% of revenues, with OEM accounting for the remaining 30%. Because of the extra cushion of profit margin provided by having one's own brand, the company has been able to thrive through the large appreciation of the NT dollar in the 1990s and the reform and opening-up of the mainland Chinese economy.
Discussing overall direction, King Liu stresses that even today Giant attaches as much importance to OEM as to its own brand name. He relates that the two core principles for company strategy are "top quality" and "differentiation." Each year the company invests 2% of revenues in R&D, and moreover is working congruently with the domestic bicycle industry's "3N" (3New) program-new materials, new functions, new uses. Giant aims to strengthen its own technical capabilities, to "create new value," and to continue with ever more innovative design, in order to consolidate the name recognition and reputation of the brand.
"Although the big companies in the US and Europe have brand names and distribution channels, most of them lack manufacturing and R&D capacity. Taiwan and mainland Chinese companies, on the other hand, have strong manufacturing abilities, but need to take it to the next level, especially in terms of management of operations on a global scale," explains King Liu.
To this end, Giant works to ensure that the different parts of its planet-wide manufacturing, distribution, and service network are integrated and mutually supportive. For example, the headquarters takes information collected at the three main R&D centers (in Europe, the US, and Taiwan) and, based on the comparative advantages of different locations in terms of wages, human resources, parts, and so on, assigns manufacturing to one of four different production bases. Moreover, the six regional marketing centers under the Giant flag, besides being responsible for sales and promotion, also immediately report the latest market intelligence, so that the production lines can quickly make adjustments.
Moreover, the company annually spends 8% of revenues on global marketing to promote the Giant brand name, and also sponsors world-class cycling teams and public service or cultural activities. Perhaps most importantly, Giant has generated great word-of-mouth advertising with programs like "buy in one place, get service anywhere in the world," a five-year guarantee on the bike frame, and product liability insurance (US$5 million for ordinary bikes, US$3 million on electric bikes).
(left) This intelligent motorized bike can automatically sense a decline in the pressure the rider puts on the pedals, and will give you a boost when you need it. (right) Starting this year, in addition to coming out with newly designed frames, Giant has also commissioned fashion designers to create a line of biking attire and accessories so that cyclists can also try on the feeling of being trendy.