Expertise in world market leader strategy
From SME to Hidden Champion in Austria
We look at your potential together. In this way, we define the course that needs to be set. Your path towards the hidden champion strategy. We then work together to revise your strategy and support you in its implementation.
What is a hidden champion?
This term refers to small and medium-sized enterprises that have made it to European or world market leaders in their field.
Management consultant Prof. Dr. Dr. Hermann Simon defined the criteria for being able to call oneself a hidden champion:
- No. 1, 2 or 3 on the world market or No. 1 on a continent
- Sales below 3 billion euros (for Austria, according to Prof. Dr. Jungwirth, below 200 million euros applies; above this, the company is a world market leader, which is no longer so hidden)
- Low level of public awareness
Hidden Champions in Austria
There are around 250 medium-sized global market leaders in Austria. The majority of them are in the industrial goods sector (73%). Just under one-fifth work in the consumer goods sector. Only 7 percent belong to the service sector.
Austrian global market leaders employ an average of 370 people. Their annual turnover is 56 million euros. Their export ratio is 85%. Hidden champions think about international expansion at an early stage. They are often among the “born globals”.
In Austria, these companies include Doppelmayr (ropeways), Geislinger (clutch games), Tupack (packaging), Schiebl (mine detectors), or Ovotherm (packaging).
Tips and our approach
Hidden Champion Strategy for Success
Hidden champions do not limit their goals to regions or countries; they regard the world as their target market. They, therefore, aim for a high market share. In some cases, they go one step further with their hidden champion strategy:
- Market leadership comes from innovation and undisputed quality.
- You focus on a narrow niche with a single product. Customer proximity is another key to success. Over time, intensive discussions with regular customers are encouraged.
- The number of patents per hidden champion in the SME sector is incomparably higher than the patent applications of large companies.
Marketing strategies of the hidden champions in detail
Almost all of the Austrian global market leaders are convinced that they offer higher quality products than the competition. It, therefore, stands to reason that the strategy of quality leadership is mostly pursued. This is only possible by investing heavily in research and development – and this pays off: on average, a hidden champion in Austria has 34 patents in force.
Based on the product strategy pursued, the SMEs are clearly positioned at high prices. However, they vary their prices: Just under half of the companies surveyed say they sell at different prices for different customers.
Most companies spend just under 3 percent of sales on communications. Instruments such as trade fairs/exhibitions, trade journals, employee communications, public relations, and sales promotion are the main tools used. Word-of-mouth propaganda is also very important for hidden champions.
Here, the companies are characterized above all by a remarkable closeness to their customers. The direct conversation with regular customers is irreplaceable.
What SMEs can learn from hidden champions
- Strive for innovation in the area of research and development and focus the range on high-quality products.
- Offer customer-oriented services.
- As a result, pursue a high-price policy that must be linked to high customer value.
- Focusing on niches. This brings not only a distinctive positioning in the market, but also less competitive pressure.
- The world is the market! Do not concentrate from the outset only on Austria as a sales market.
- Increasing proximity to customers and intensifying direct sales.
Public awareness doesn’t drive sales, it’s the attention you get in the customer segment. So we focus on narrow niches with in-depth products that come from customer conversations and sell them worldwide.
Revise hidden champion strategy
Your company is growing well and you have several established products and services on the market, partly for different customer groups. You have already started to internationalize and generate a double-digit share of your sales outside your home country. We support you in revising your hidden champion strategy. It is about focus and production/service depth, as well as distribution models and product innovations.
Support in the implementation
We are used to being involved in the implementation of the developed strategy. Through regular sessions with the management, we jointly ensure that the implementation of the defined strategy is also progressing.
We develop a joint roadmap that fits your resource allocation and supports you in budgeting / financial planning for the next years along the way.
External Business Development Function
If the company wants to establish a business development function, we will gladly and professionally take over the phase until the internal team is staffed and trained. We help to select the right people and set up the business development or strategic function. In the meantime, we have already worked on the function until everyone is ready.
Point business cases and plans
If new topics have to be built up or there is a strong strategy change in an area, then we support selectively. These topics are for example a company acquisition, partner negotiations, internationalization, a new market entry, or the design of the sales model.