Management
Hidden Champions Down Under Seven lessons on how to become a hidden champion Chris Petzoldt
SIMO !UCH"# $ %'"#S Strategy & Marketing Consultants
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an) world market leaders around the world are virtuall) unknown to the public. "ven less is known about their strategies. *hat is the secret to their success and uni+ueness, %roessor Hermann Simon ounder o the strateg) and marketing consultanc) Simon-!ucher $ %artners has been researching and dissecting these so called /Hidden Champions/ and their strategies or over (0 )ears. Simon1s list o mid-si2ed3 little-known world market leaders contains about (000 entries3 4(00 o those are rom 5erman). *hile 5erman)6s huge e7port success is heavil) backed b) these mid-si2ed world market leaders3 there are also 8Hidden Champions9 in &ustralia. Do you know Australian companies like Orica, Aristocrat Leisure Ltd, C!P, CSL, "u#arm or A"CA$
Hidden Champions %n #act these companies are idden Champions'( •
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Orica is world market leader in e)plosi*es #or mines and +uarries Orica o##ers its inno*ati*e and comprehensi*e -lasting ser*ices in o*er ./ countries &ristocrat :eisure :imited is one o# the largest manu#acturers o# slot machines in the world So when you are gam-ling in #ront o# a one0armed -andit, chances are high that it comes #rom this relati*ely small Australian company CH"% 0 owned -y 1ram-les Ltd 0 is the world2s largest pallet and container pooling ser*ices -usiness %ts customers include some o# the world2s largest consumer goods manu#acturers and retailers CS: is the world2s largest producer o# -lood plasma deri*ati*es through its di*ision CSL Plasma 3ou can pro-a-ly #ind their products in almost any hospital uarm is glo-al leader in the manu#acture and marketing o# pheno)ies, a class o# her-icides that control and eradicate weeds &C& is market leader in computer numerical control 4C"C5 grinding machines and C"C systems
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A"CA2s #ocus on technology and inno*ation was already honoured -y 6. industry awards, recognizing its engineering e)cellence and e)port achie*ements 7hy are these companies so success#ul$ 7hat are they doing di##erently #rom large corporations$ 8he answer( Almost e*erything9 7hat can we learn #rom them$ ere are the most important lessons #rom which large as well as small companies can -ene#it(
< important lessons 4. "7tremel) &mbitious 'argets 3ou don:t -ecome a world market leader -y chance, -ut -y setting *ery am-itious targets and pursuing them with ne*er0ending perse*erance 8he targets o# hidden champions are aimed at growth and market leadership 8hese companies ha*e grown rapidly in the last decade, nearly tripling their size Across all idden Champions' market shares ha*e skyrocketed 8en years ago they were on a*erage .;< larger than their strongest competitor worldwide = today they are more than dou-le this amount
(. =ocus and Depth 3ou can only -ecome world0class concentration 8he hidden champions narrowly and work deep into the *ertical integration is ./<> the company is at 6?<
through #ocus and de#ine their markets *alue chain 8heir a*erage industrial
;. 5lobalisation @ocus makes a market small, -ut glo-alization makes it large 8he hidden champions ha*e their own su-sidiaries in all critical markets around the glo-e and practice direct customer relationship management 8hey in*est continuously in markets o# the #uture, like the C% 4China0 ussia0%ndia5 triad www.simon-kucher.com
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>. Innovation idden champions in*est nearly twice as much re*enue in &D as other companies On a*erage, patent intensity is up to #i*e times higher #or the hidden champions A-out two0thirds o# the hidden champions consider market and technology to -e e+ually important dri*ing #orces> only B?< o# large corporations achie*e this -alance
?. Closeness to Customers and Competitive &dvantages 7hile only .0B/< o# employees in large corporations ha*e regular and #re+uent contact with customers, a-out 6.0 ./< o# hidden champion employees can say the same Closeness to customers is the -iggest strength o# mid0 sized companies, e*en more so than inno*ation Product +uality and ser*ice are two o# their outstanding competiti*e ad*antages idden champions ha*e created new competiti*e ad*antages in the #orm o# ad*ice and systems integration 8hese are hard #or competitors to imitate, as they are not #ound in products, -ut in the minds o# their employees
@. :o)alt) and Highl)-Aualiied "mplo)ees 8he employee turno*er rate o# hidden champions is #ar -elow industry a*erages 4a-out 6< pa in ermany *s E< on a*g5 8his #igure is much more important than the a*erage sickness rates, -ecause e*ery lost employee also means lost skills and knowledge idden champions ha*e greatly increased the num-er o# highly +uali#ied employees o*er the last ten years 1etter +uali#ications are the #oundation o# their superiority
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<. Strong :eadership At the head o# hidden champion companies are strong personalities who identi#y themsel*es completely with the company On a*erage, C!Os o# hidden champions remain at the top #or F B/ years C!Os o# stock market listed companies, in contrast, a*erage G . years 3ounger e)ecuti*es and women are also more present than in large corporations
Hidden :esson %n summary, the hidden champions #ollow their own path = and do so with more decisi*eness and success than e*er -e#ore 8hey do nearly e*erything di##erent( they de*iate #rom management #ads> they pay little heed to what other large corporations are doing or what management gurus proclaim %n essence, they apply common sense = so simple, and yet so di##icult when it comes to implementation And this is perhaps the most important lesson
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Chris %et2oldt is the Managing Director o# Simon0Hucher & Partners Strategy & Marketing Consultants Australia 0 a world0market leading consultancy in marketing and pricing across industries e has more than BB years o# consulting e)perience and conducted more than ;/ proIects on re*enue management and pricing across the glo-e S)dne) oice Le*el K/, "orthpoint 8ower, B// Miller Street, "orth Sydney "S7 6/;/, Australia el( ;B 6 ??EB ;J/6, @a)( ;B 6 ??EB ;JJJ !0Mail( ChrisPetzoldtSimon0Huchercom wwwsimon0kuchercom
SIMO !UCH"# $ %'"#S Strategy & Marketing Consultants
Simon0Hucher & Partners is a glo-al consulting #irm with ;6. pro#essionals in 6. o##ices worldwide #ocusing on Smart Pro#it rowth @ounded in B?J., the company has o*er 6. years o# e)perience pro*iding strategy and marketing consulting, and is regarded as the world:s leading pricing ad*isor and thought leader ℠
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