Global Bike Group


SAP S/4HANA 1809
Global Bike
Company Background
Simha Magal
Stefan Weidner
Jeff Word
Last Update
May 2019
A general understanding of Global
Bike (the enterprise) prior to
embarking on hands-on exercises
and case studies in the SAP ERP
client is critical for success.
This narrative provides a historical
background for how Global Bike
began and an overview of its
operations and strategy. This
information will be used
extensively throughout the
curriculum material.
The Global Bike data set has
exclusively been created for SAP UA
global curricula.

© SAP UCC Magdeburg
Global Bike Group
Background and overview of Global Bike strategy and operations.
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Company History
Task Get to know the company’s history.
Short Description Read the below narrative to learn about the company’s
Time 15 min
The Global Bike Group has a pragmatic design philosophy that comes from
its deep roots in both the off-road trail racing and long-distance road racing
sports. Nearly 20 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 extremely high standards. So, they tookmatters
into their own hands and built legendary bikes that would outlast and
outperform the competition. From these humble origins, Global Bike
Incorporated was born and continues to deliver innovative high-performance
bicycles to the world’s most demanding riders.
This heritage of entrepreneurial spirit and quest for design perfection is still
the cornerstone of Global Bike’s corporate philosophy. Global Bike
produces bikes for the most demanding competitors—whether the
competition is on pavement or dirt, for money, fame or just bragging rights.
John Davis earned his racing scars in the mountain racing circuit in America,
where he won numerous downhill and cross-country championships. Early
on, John realized that the mass-produced bicycles available were inadequate
in many ways for the type of racing he was doing. So, John stripped four of
his old bikes down to the bare metal and rebuilt them into a single
“Frankenstein” bike that he rode to win the national championship. Once
news of his Frankenstein bike got out, John’s friends and even his
competitors began asking him to build them a Frankenstein bike too. While
recovering from an injury in 1990, John started producing the first series of
Frankenstein bikes in his garage—each one custom-built from cannibalized
parts from other bikes. As more and more orders came in, John successfully
expanded Frankenstein Bikes from his garage operations into a full-blown
manufacturing facility in Dallas and began producing custom trail bikes
which he sold through a network of specialized bike dealers throughout the
At nearly the same time, halfway around the world in Heidelberg, Germany,
Peter Schwarz was studying engineering and competing in regional touring
races on weekends. In between his races and studies, Peter worked at a bike
shop in Heidelberg, fixing student bikes and tuning the touring bikes that he
and his friends rode for competitions. As Peter’s reputation as a fierce
competitor and mechanical wizard grew, he also began to design and build
road bikes based on an ultra-light composite frame that he had created for
one of his engineering courses. Peter’s innovative use of carbon composite
materials allowed him to build a frame that was significantly stronger and
one tenth the weight of competing frames. As a student, Peter 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. Soon, Peter’s
frames were being used by racers all over Europe and he started Heidelberg

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Composites to market and design frames which would be fabricated by a
contract manufacturer on a larger scale. Heidelberg Composites sold its
frames to specialized bike stores throughout Europe and directly to racing
teams, eventually becoming the leader in lightweight touring frames in
Through a twist of fate, Peter and John met each other in 2000 and
immediately recognized their mutual passion for performance and
complimentary business models. Each had been looking for a partner in
another racing field and each had been looking for a partner in a different
market. They quickly realized that a merger between their two companies
would be extremely synergistic and that the combination of their product
lines and regional distribution channels would generate a great deal of
So, in 2001, Heidelberg Composites and Frankenstein Bikes merged to form
Global Bike. Today, John and Peter share the responsibilities for managing
Global Bike’s growing organization as co-CEO’s. John is responsible for
sales, marketing, service & support, IT, finance and human resources groups
and Peter is responsible for research, design, procurement and manufacturing
groups from an organizational reporting perspective.
Figure 1:
Board of Organizational Structure
John (Co-CEO) Peter (Co-CEO)
Chief Financial VP Human VP Research
VP Marketing Information Officer Resources and VP Operations
Officer Development
However, Global Bike is a process-centric organization, so John and Peter
prefer to think of the processes that they are responsible for, rather than the
functional areas of the company that report to them. From this perspective,
Peter is responsible for Idea-to-Market and Build-to-Stock and John is
responsible for Order-to-Cash and Service & Support, as well as the
supporting services for all four key processes. The simple way to look at
their responsibilities would be to say that Peter spends money and builds
products and John sells products and brings in money.

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Figure 2:
Enterprise Process Map

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Corporate Overview
Task Develop an organizational chart for Global Bike’s enterprise structure.
Short Description Read the below narrative to gather all relevant
information for sketching Global Bike’s current company structure.
Time 15 min
Due to several tax and export issues, Global Bike Groups’s headquarters is
located in Dallas and Global Bike Inc. is registered as a US company,
following US GAAP accounting standards. Global Bike Group operates a
subsidiary company, Global Bike Germany GmbH, which is based in
Heidelberg and is subject to IFRS accounting standards and German tax
Material planning, finance, administration, HR and IT functions are
consolidated at the Dallas headquarters. The Dallas facility manufactures
products for the US and export markets and its warehouse manages product
distribution for the central US and internet retailers. Global Bike Inc. also
has warehouses for shipping and export in both San Diego and Miami. San
Diego handles West Coast distribution and exports for Asia, while Miami
handles East Coast distribution and Latin America exports.
Global Bike Germany GmbH has its headquarters in Heidelberg Germany.
The majority of research and development is housed in the Heidelberg
offices. Heidelberg is also the main manufacturing facility for Global Bike in
Europe. The Heidelberg warehouse handles all shipping for southern Europe.
The Hamburg warehouse handles all shipping for the UK, Ireland, Middle
East and Africa. Global Bike sells its bikes throughout the world and
employs approximately 100 people, 2/3rds of the employees are in the US
and the remaining 1/3 in Europe.
Organizational Chart

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Product Strategy
Task Get familiar with Global Bike’s product strategy.
Short Description Read the below narrative about Global Bike’s product
Time 15 min
Global Bike is a world class bicycle company serving the professional and
“prosumer” cyclists for touring and off-road racing. Global Bike’s riders
demand the highest level of quality, toughness and performance from their
bikes and accessories.
Product development is the most critical element of Global Bike’s past and
future growth. Global Bike has invested heavily in this area, focusing on
innovation, quality, safety and speed to market. Global Bike has an extensive
innovation network to source ideas from riders, dealers and professionals to
continuously improve the performance, reliability and quality of its bicycles.
In the touring bike category, Global Bike’s handcrafted bicycles have won
numerous design awards and are sold in over 10 countries. Global Bike’s
signature composite frames are world-renowned for their strength, low
weight and easy maintenance. Global Bike bikes are consistently ridden in
the Tour de France and other major international road races. Global Bike
produces two models of their signature road bikes, a deluxe and professional
model. The key difference between the two models is the type of wheels
used, aluminum for the basic model and carbon composite for the
professional model.
Global Bike’s off-road are also recognized as incredibly tough and easy to
maintain. Global Bike 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. Global Bike produces two
types of off-road bike, a men’s and women’s model. The basic difference
between the two models is the smaller size and ergonomic shaping of the
women’s frame.
Figure 3
Global Bike Finished
Global Bike also sells an accessories product line comprised of helmets, t
shirts and other riding accessories. Global Bike partners with only the
highest quality suppliers of accessories which will help enhance riders’
performance and comfort while riding Global Bike bikes.

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Figure 4
Global Bike Trading

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Manufacturing Strategy
Task Get familiar with Global Bike’s manufacturing strategy.
Short Description Read the below narrative about Global Bike’s
manufacturing strategy.
Time 10 min
Global Bike operates two production facilities, Dallas and Heidelberg. Each
facility has three assembly lines and can produce around 1000 bikes per
year. Total production capacity is roughly 6000 bikes per year, but can be
increased by 15%-20% by using overtime hours and part-time workers.
Global Bike has outsourced the production of both off-road and touring
frames and the carbon composite wheels to trusted partners who have
specialty facilities to fabricate the complex materials used. Global Bike
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. Global Bike primarily
assembles semi-finished goods into finished goods at its production
facilities. Finished goods are either stored in the local warehouse or shipped
to other regional distribution centers to fulfill customer orders.
Figure 5
Global Bike Raw
Global Bike Semi
Finished Goods

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Distribution Network
Task Get familiar with Global Bike’s distribution network.
Short Description Read the below narrative about Global Bike’s distribution
Time 10 min
Given the highly specialized nature of Global Bike’s bicycles and the
personalized needs of riders, Global Bike sells its bikes exclusively through
well-known and respected Independent Bicycle Dealers (IBDs). These dealers
employ staff members who are experts in off-road and tour racing to help
consumers choose the right Global Bike bike and accessories for their
individual needs.
Figure 6
Global Bike
Customers in
US and Germany
Due to the highly technical nature of its products, Global Bike has embraced th
Internet primarily as an information channel, maximizing its potential for
educating consumers and partners and marketing its products to a large
Since Global Bike’s main sales channel is through specialty resellers and there
are complex tax issues associated with selling in multiple states and countries,
they have a limited amount of internet sales.

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Partner Network
Task Get familiar with Global Bike’s partner network.
Short Description Read the below narrative about Global Bike’s partner
Time 10 min
Figure 7
Global Bike Vendors in
US and Germany
Global Bike has established an extensive partner operation to ensure process
continuity between Global Bike and its partners to deliver best-in-class
products for its customers. Special attention has been paid to nurturing strong
relationships with suppliers and Global Bike is generally the largest customer
of its main suppliers.

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