CASE STUDY

SAP AG

Global Bike Inc.
Background and overview of GBI strategy and oerations!
CASE STUDY
Product
SAP E"P
G!B!I!
"e#ease $!%&
Level
Undergraduate
Beginner
Focus
Co'any Background
Authors
Si'(a )aga#
Stefan *eidner
+eff *ord
Version
,!,%
MOTIVATION
A genera# understanding of GBI
-t(e enterrise. rior to e'/arking
on (ands0on e1ercises and case
studies in t(e SAP E"P c#ient is
critica# for success!
T(is narrative rovides a (istorica#
/ackground for (ow GBI /egan
and an overview of its oerations
and strategy! T(is infor'ation wi##
/e used e1tensive#y t(roug(out t(e
curricu#u' 'ateria#!
PRR!"I#IT#
2one
NOT#
2one
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Co'any 3istory
Task Get to know the companys history. Time 15 min
Short Description Read the below narrative to learn about the companys history.
Global Bike Inc. has a pragmatic design philosophy that comes from its
deep roots in both the offroad trail racing and longdistance road racing
sports. !early "# years ago$ its founders designed their first bikes out of
necessity%they had races to win and the bikes that were available at the
time did not perform to their e&tremely high standards. 'o$ they took
matters into their own hands and built legendary bikes that would outlast
and outperform the competition. (rom these humble origins$ Global Bike
Incorporated was born and continues to deliver innovative high
performance bicycles to the worlds most demanding riders.
)his heritage of entrepreneurial spirit and *uest for design perfection is still
the cornerstone of GBIs corporate philosophy. GBI produces bikes for the
most demanding competitors%whether the competition is on pavement or
dirt$ for money$ fame or +ust bragging rights.
John Davis earned his racing scars in the mountain racing circuit in
,merica$ where he won numerous downhill and crosscountry
championships. -arly on$ .ohn reali/ed that the massproduced bicycles
available were inade*uate in many ways for the type of racing he was
doing. 'o$ .ohn stripped four of his old bikes down to the bare metal and
rebuilt them into a single 0(rankenstein1 bike that he rode to win the
national championship. 2nce news of his (rankenstein bike got out$ .ohns
friends and even his competitors began asking him to build them a
(rankenstein bike too. 3hile recovering from an in+ury in 144#$ .ohn
started producing the first series of (rankenstein bikes in his garage%each
one custombuilt from cannibali/ed parts from other bikes. ,s more and
more orders came in$ .ohn successfully e&panded (rankenstein Bikes from
his garage operations into a fullblown manufacturing facility in 5allas and
began producing custom trail bikes which he sold through a network of
speciali/ed bike dealers throughout the country.
,t nearly the same time$ halfway around the world in 6eidelberg$
Germany$ Peter Schwarz was studying engineering and competing in
regional touring races on weekends. In between his races and studies$
7eter worked at a bike shop in 6eidelberg$ fi&ing student bikes and tuning
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CASE STUDY
the touring bikes that he and his friends rode for competitions. ,s 7eters
reputation as a fierce competitor and mechanical wi/ard grew$ he also
began to design and build road bikes based on an ultralight composite
frame that he had created for one of his engineering courses. 7eters
innovative use of carbon composite materials allowed him to build a frame
that was significantly stronger and one tenth the weight of competing
frames. ,s a student$ 7eter did not have a great deal of financial resources$
so he partnered with a local company that manufactured his frame designs
as a contract manufacturer. 'oon$ 7eters frames were being used by racers
all over -urope and he started 6eidelberg 8omposites to market and design
frames which would be fabricated by a contract manufacturer on a larger
scale. 6eidelberg 8omposites sold its frames to speciali/ed bike stores
throughout -urope and directly to racing teams$ eventually becoming the
leader in lightweight touring frames in -urope.
)hrough a twist of fate$ 7eter and .ohn met each other in "### and
immediately recogni/ed their mutual passion for performance and
complimentary business models. -ach had been looking for a partner in
another racing field and each had been looking for a partner in a different
market. )hey *uickly reali/ed that a merger between their two companies
would be e&tremely synergistic and that the combination of their product
lines and regional distribution channels would generate a great deal of
efficiencies.
'o$ in "##1$ 6eidelberg 8omposites and (rankenstein Bikes merged to
form Global Bike Incorporated. )oday$ .ohn and 7eter share the
responsibilities for managing GBIs growing organi/ation as co8-2s.
.ohn is responsible for sales$ marketing$ service 9 support$ I)$ finance and
human resources groups and 7eter is responsible for research$ design$
procurement and manufacturing groups from an organi/ational reporting
perspective.
5igure 67
8rgani9ationa# Structure
6owever$ GBI is a processcentric organi/ation$ so .ohn and 7eter prefer to
think of the processes that they are responsible for$ rather than the
functional areas of the company that report to them. (rom this perspective$
7eter is responsible for Ideato:arket and Buildto'tock and .ohn is
responsible for 2rderto8ash and 'ervice 9 'upport$ as well as the
supporting services for all four key processes. )he simple way to look at
their responsibilities would be to say that 7eter spends money and builds
products and .ohn sells products and brings in money.
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5igure ,7
Enterrise Process )a
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Cororate 8verview
Task 5evelop an organi/ational chart for GBIs enterprise structure. Time 15 min
Short Description Read the below narrative to gather all relevant information for sketching
GBIs current company structure.
5ue to several ta& and e&port issues$ GBIs head*uarters is located in
5allas and GBI is registered as a ;' company$ following ;' G,,7
accounting standards. GBI operates a subsidiary company$ GBI -urope$
which is based in 6eidelberg and is sub+ect to I(R' accounting standards
and German ta& regulations.
:aterial planning$ finance$ administration$ 6R and I) functions are
consolidated at the 5allas head*uarters. )he 5allas facility manufactures
products for the ;' and e&port markets and its warehouse manages product
distribution for the central ;' and internet retailers. GBI also has
warehouses for shipping and e&port in both 'an 5iego and :iami. 'an
5iego handles 3est 8oast distribution and e&ports for ,sia$ while :iami
handles -ast 8oast distribution and <atin ,merica e&ports.
GBI -urope has its head*uarters in 6eidelberg Germany. )he ma+ority of
research and development is housed in the 6eidelberg offices. 6eidelberg
is also the main manufacturing facility for GBI in -urope. )he 6eidelberg
warehouse handles all shipping for southern -urope. )he 6amburg
warehouse handles all shipping for the ;=$ Ireland$ :iddle -ast and
,frica. GBI sells its bikes throughout the world and employs
appro&imately 1## people$ ">?rds of the employees are in the ;' and the
remaining 1>? in -urope.
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8rgani9ationa# C(art
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Product Strategy
Task Get familiar with GBIs product strategy. Time 15 min
Short Description Read the below narrative about GBIs product strategy.
GBI is a world class bicycle company serving the professional and
0prosumer1 cyclists for touring and offroad racing. GBIs riders demand
the highest level of *uality$ toughness and performance from their bikes
and accessories.
7roduct development is the most critical element of GBIs past and future
growth. GBI has invested heavily in this area$ focusing on innovation$
*uality$ safety and speed to market. GBI has an e&tensive innovation
network to source ideas from riders$ dealers and professionals to
continuously improve the performance$ reliability and *uality of its
bicycles.
In the touring bike category$ GBIs handcrafted bicycles have won
numerous design awards and are sold in over 1# countries. GBIs signature
composite frames are worldrenowned for their strength$ low weight and
easy maintenance. GBI bikes are consistently ridden in the )our de (rance
and other ma+or international road races. GBI produces two models of
their signature road bikes$ a delu&e and professional model. )he key
difference between the two models is the type of wheels used$ aluminum
for the basic model and carbon composite for the professional model.
GBIs offroad are also recogni/ed as incredibly tough and easy to
maintain. GBI trail bikes are the preferred choice of world champion off
road racers and have become synonymous with performance and strength
in one of the most grueling sports in the world. GBI produces two types of
offroad bike$ a mens and womens model. )he basic difference between
the two models is the smaller si/e and ergonomic shaping of the womens
frame.
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5igure 4
GBI 5inis(ed Products
GBI also sells an accessories product line comprised of helmets$ tshirts
and other riding accessories. GBI partners with only the highest *uality
suppliers of accessories which will help enhance riders performance and
comfort while riding GBI bikes.
5igure &
GBI Trading Goods
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)anufacturing Strategy
Task Get familiar with GBIs manufacturing strategy. Time 1# min
Short Description Read the below narrative about GBIs manufacturing strategy.
GBI operates two production facilities$ 5allas and 6eidelberg. -ach
facility has three assembly lines and can produce around 1### bikes per
year. )otal production capacity is roughly @### bikes per year$ but can be
increased by 15A"#A by using overtime hours and parttime workers.
GBI has outsourced the production of both offroad and touring frames and
the carbon composite wheels to trusted partners who have specialty
facilities to fabricate the comple& materials used. GBI maintains very
collaborative research and design relationships with these specialty partners
to ensure that innovations in both material and structural capabilities are
incorporated into the frames. GBI primarily assembles semifinished
goods into finished goods at its production facilities. (inished goods are
either stored in the local warehouse or shipped to other regional distribution
centers to fulfill customer orders.
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5igure :
GBI "aw )ateria#s
GBI Se'i05inis(ed Goods
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Distri/ution 2etwork
Task Get familiar with GBIs distribution network. Time 1# min
Short Description Read the below narrative about GBIs distribution network.
Given the highly speciali/ed nature of GBIs bicycles and the personali/ed
needs of riders$ GBI sells its bikes e&clusively through wellknown and
respected Independent Bicycle 5ealers BIB5sC. )hese dealers employ staff
members who are e&perts in offroad and tour racing to help consumers
choose the right GBI bike and accessories for their individual needs.
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5igure $
GBI Custo'ers in
US and Ger'any
5ue to the highly technical nature of its products$ GBI has embraced the
Internet primarily as an information channel$ ma&imi/ing its potential for
educating consumers and partners and marketing its products to a large
audience.
'ince GBIs main sales channel is through specialty resellers and there are
comple& ta& issues associated with selling in multiple states and countries$
they have a limited amount of internet sales.
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Partner 2etwork
Task Get familiar with GBIs partner network. Time 1# min
Short Description Read the below narrative about GBIs partner network.
GBI has established an e&tensive partner operation to ensure process
continuity between GBI and its partners to deliver bestinclass products for
its customers. 'pecial attention has been paid to nurturing strong
relationships with suppliers and GBI is generally the largest customer of its
main suppliers.
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5igure ;
GBI >endors in
US and Ger'any
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IT Strategy
Task Get familiar with GBIs I) strategy. Time 5 min
Short Description Read the below narrative about GBIs information technology stratey.
5uring "##4$ GBI integrated a shared services model for all I) functions$
located in the 5allas office. ,long with this move to centrali/ed I)$ GBI
also implemented ',7 -R7 Bversion @.#C. 7rior to this$ divisions were
running multiple$ independent application environments. ,ll -R7 functions
are centrali/ed with the primary ob+ectives to reduce costs and deliver best
inclass technology to all divisions globally. )his centrali/ed approach
offers GBI an advanced business platform under a highly controlled
environment$ which enables consistency of operations and process integrity
across the globe.
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