Wellington
In theory, as an old-world type economy and like most of its contemporaries, Germany should bestruggling out of the after-effects of the global financial crisis.
But the 'strongman' of Europe has been thriving while its competitors are scrambling, and a
These companies have defied a strong Euro, even while 'Made in Germany' has made its productsexpensive on world markets.
An analysis of about 1,130 Hidden Champions reveals important lessons - many of which New Zealandcould well copy.
1.Hidden Champions strive for world market leadership to become No. 1 in the world in theirmarkets/segments
2.Market definition is an important part of strategy development, usuallyleading to narrowly defined markets, both from a customer and technology perspective and a highlyfocused strategy
3.Specialisation in product and know-how is combined with global selling andmarketing. They serve the target markets through their own subsidiaries and do not delegate thecustomer relationship to third parties
4.Hidden Champions are very close to their customers,in particular their top customers. They are value, not price oriented
5.They are highlyinnovative in both products and processes, not only confined to technology. Innovation activitiesare globally oriented and continuous
6.The overall company orientation is not one-sided butboth technology and market driven
7.Hidden Champions create competitive advantages in productquality and service. They are close to their top competitors and defend their positionferociously
8.They rely on their own strengths. They mistrust strategic alliances andoutsource less than other companies. Their value chains are deep. They see the foundations of theircompetitive superiority in things which only they can do. Together with lesson 2, their strategiescould be defined as "deep rather than wide". Deep in their value chain, not wide in their coverageof different markets with different needs
9.Hidden Champions have very strong corporatecultures associated with excellent employee identification and motivation. Selection for jobs issharp
10.Their leaders are very strong and stay at the helm for decades
Some of Germany's unique embedded cultural and educational attributes would be impossible toreplicate in New Zealand.
Yet, its export orientation to other rich countries is worthy of replication by this country.
This also includes value-added food products, which as reported in an earlier sticK story (
The Hidden Champions are characterised as being 'global medium enterprises', positioned betweenthe widely researched big publicly-listed multinationals and the traditional privately-helddomestically-focused SMEs.
The study concludes its assessment of the Hidden Champions with a summarisation of theirmanagement model:
•Family ownership and cooperative corporate cultures combined with outside professionalmanagement
•Global market dominance through positioning in niche markets and thus exploitingand enhancing resources and capabilities on a global scale
•Continuous endeavour to raiseoperational effectiveness of all major processes and functions