The olfactory system removes correlations in natural odors using a network of inhibitory neurons in the olfactory bulb. It has been proposed that this network integrates the response from all olfactory receptors and inhibits them equally. However, how such global inhibition influences the neural representations of odors is unclear. Here, we study a simple statistical model of the processing in the olfactory bulb, which leads to concentration-invariant, sparse representations of the odor composition. We show that the inhibition strength can be tuned to obtain sparse representations that are still useful to discriminate odors that vary in relative concentration, size, and composition. The model reveals two generic consequences of global inhibition: (i) odors with many molecular species are more difficult to discriminate and (ii) receptor arrays with heterogeneous sensitivities perform badly. Comparing these predictions to experiments will help us to understand the role of global inhibition in shaping normalized odor representations in the olfactory bulb.