Discussion Assignment 8

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Nov 24, 2024

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1 Discussion Assignment 8 Student’s Name Institutional Affiliation

2 Case Study: From OEM supplier to A Global Leading Company Case Analysis The 1972-founded Giant is situated in the central region of Taiwan. Initially operating as a modest family-owned enterprise, the company lacked experience in bicycle manufacturing processes. Nevertheless, throughout the subsequent four decades, the organization executed a succession of astute expansions that catapulted it to the forefront of bicycle suppliers globally. The prosperous brand has achieved worldwide expansion, generating a combined business volume of 54 billion dollars. During the foundation phase of Giant's expansion strategy, the company replicated Japanese manufacturing processes. A subsequent OEM agreement was reached with Schwinn, a leading bicycle manufacturer based in the United States. Subsequently, Giant implemented the acquired insights to enhance their manufacturing processes moving forward. During the technological development phase, the second stage of Giant's strategic expansion, the company collaborated with external academic institutes to develop the carbon fiber bicycle by integrating their R&D capabilities. Their technological advancements were implemented in the bicycle manufacturing sector through the utilization of composite materials. Chinese labor market liberalization prompted Giant to initiate brand promotion in Europe and the United States, upon realizing that Schwinn could terminate orders with them at any moment. During the third phase of their strategic expansion, Giant attained the necessary distinctive R&D and manufacturing capacities to bolster the growth of their brand. Consequently, they extended their business operations to China and established life experience outlets in Taiwan that were under their direct supervision. This enabled the company to allocate additional time towards cultivating client relationships, thereby facilitating the enhancement of their customer service. As the final phase of its strategic

3 expansion, brand expansion saw the formation of industrial alliances between Giant and its principal competitors and component suppliers in Taiwan. They achieved success in modernizing the bicycle industry, thereby preventing foreign competition. In an effort to increase product quality, brand awareness, and the promotion of a bicycle-friendly environment, Giant also sponsored a bicycle race (Wu & Lee, 2014). Establishing an Intercultural Group It is crucial for organizations to acknowledge that international management plays a significant role in the process of globalization by enabling them to concentrate on matters that affect them on an individual level, including communication and culture, leadership and negotiations, human resources and talent management, and international marketing and distribution (Zamborsky, 2016). In order to establish an effective cross-cultural team, therefore, it is imperative that leadership receives instruction in both emotional intelligence and cultural sensitivity. It is imperative that this approach be reflected in the organizational culture, where workers and leadership proactively promote and cultivate an all-encompassing setting that values and adapts to differences across cultures. Recruiting executives and employees from developing countries who share the organization's objectives and values will become more feasible as a result. This approach will facilitate cost reduction in manufacturing while ensuring the provision of a superior product that satisfies client demands and preferences. This was crucial for Giant to prevent business loss to China and maintain its stagnant development. In addition to establishing and fostering a foundation for cross-cultural interactions via cultural and emotional intelligence training, Giant's long-term objectives should be adjusted to meet production demands (Jessen, 2010; Laegaard and Bindslev, 2006). Challenges that managers face with projects that cross cultural boundaries

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4 As a result of globalization, numerous projects have undergone a process of global expansion, involving stakeholders, project managers, and individuals from diverse cultural backgrounds. However, it is important to note that even projects that are managed at the local level will continue to involve participants from other cultures (Stewart, 2006). Project managers will be confronted with a multitude of challenges and obstacles when working on cross-cultural initiatives. These obstacles may include, but are not limited to the following:  Acknowledging and understanding the perspectives of team members hailing from diverse ethnic and cultural heritages.  The ability to effectively interact and collaborate with colleagues and members of the team who belong to diverse organizational or cultural backgrounds.  Determining which members of the team are adaptable to cross-cultural differences.  Identifying the labor ethic that is characteristic of a particular culture. This is crucial for the success of a project, as it ensures that all team members share the same objectives and values of the organization.  Due to the existence of diverse employment regulations and policies, compensation and evaluations might not be perceived as impartial and equitable.  Divergent viewpoints regarding cost-related elements may impede the progress of a project in terms of allocating the budget.  The procedure of cooperation and communication in relation to the application of technology.  The practice of delegating to external entities particular tasks that were previously performed internally by an organization.  Offshoring to an overseas location.

5  Maintaining supply chain functionality to facilitate market connectivity and meet project timelines.  Access to information through a variety of channels, including the internet and mobile devices. Strategic Alternatives It is recommended that Giant implement the Original Equipment Manufacturer (OEM) cooperative model as a strategic approach to tackle the identified issues and obstacles. A significant proportion of suppliers obtain orders from original equipment manufacturers (OEMs) worldwide. Although this generates immediate revenue, it enables manufacturers to obtain additional funds in order to meet their obligations and maintain profitability, as was the situation with Giant. The OEM cooperative model facilitates the provision of technical support by developed-country corporations to their OEM suppliers, specifically in the area of product expertise. Giant gained a significant competitive edge by gaining knowledge of the industry's fundamental production processes and subsequently modifying and enhancing them to align with their specific requirements. As a consequence, Giant developed more robust skill sets. Their method was improved by these capabilities, enabling them to manufacture OEMs that exceeded the specifications of their suppliers. Giant successfully surmounted the obstacles posed by cross-cultural barriers with the aid of technical assistance from developing countries. By applying the acquired knowledge to the construction of their manufacturing facilities, the company was able to achieve cost reductions by operating at the required scale (Wu & Lee, 2014). Conclusion

6 Giant, which initially operated as a modest family enterprise lacking expertise in bicycle manufacturing processes, has since expanded its operations to become a prominent global bicycle provider, boasting revenues surpassing 54 billion dollars. The company realized that global OEM agreements can serve as a significant driver of corporate expansion. This critical factor for long-term operations was capitalized upon by Giant through continuous R&D investments to enhance primary capacity. By virtue of their OEM supplier status with Schwinn, Giant generated 75% of their sales. This collaborative effort imparted invaluable knowledge regarding bicycle manufacturing fundamentals and yielded substantial commercial revenues, which enabled the company to allocate resources towards brand development. Due to this investment, Schwinn was able to transfer their orders to China, allowing Giant to continue operations. .

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7 References Jessen, S.A. (2010). Project Leadership -- Step by Step: Part I. Bookboon.com https://my.uopeople.edu/pluginfile.php/1184419/mod_page/content/5/TEXT%20project- leadership-step-by-step-part-i.pdf Laegaard, J. & Bindslev, M. (2006). Organizational Theory. Bookboon.com https://my.uopeople.edu/pluginfile.php/1184419/mod_page/content/5/TEXT %20organizational-theory.pdf Stewart, J. (2006). Cross culture project management. Paper presented at PMI® Global Congress 2006—North America, Seattle, WA. Newtown Square, PA: Project Management Institute. https://www.pmi.org/learning/library/cross-culture-project-management-teams- 8008 Wu, W., & Lee, Y. (2014). From OEM supplier to a global leading company. Journal of Business Case Studies, 10(3), 225-230. https://my.uopeople.edu/pluginfile.php/1184448/mod_book/chapter/273973/U8%20OEM %20to%20Global%20Leader.pdf Zamborsky, P. (2016). International business and global strategy. Bookboon.com https://my.uopeople.edu/pluginfile.php/1184419/mod_page/content/5/TEXT %20international-business-and-global-strategy.compressed.pdf

Discussion Assignment 8

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