Hidden champions: Barely known and yet leaders
Hidden champions are leaders in their industry, but hardly known. Germany in particular is home to numerous such companies.
Manager and management consultant Hermann Simon first coined the term hidden champions in the 1990s. According to Simon, companies must meet the following criteria to be included in the list of "hidden winners":
The company is number 1,2 or 3 in its market or number 1 on its continent.
The turnover is less than 5 billion euros
The company is hardly known to the public.
Small and medium-sized enterprises are the backbone of the German economy. More small and medium-sized companies are market leaders in their field in Germany than in any other country. They include companies with sometimes unusual but very important products. Some produce, for example, the small clips that hold sausage skins together, rollers for hospital beds or even toothbrushes. These companies are focused on narrow niche markets, but within these they have carved out top positions.
Most hidden champions are so successful in their field because they focus on special and sometimes highly complex solutions. The innovative power of these small and medium-sized companies is enormous: measured by the number of employees, they often hold up to five times more patents than large corporations and invest twice as much in research and development as German industrial companies: namely, an average of 6 percent of sales. We would like to introduce you to selected listed hidden champions.
Herrenknecht AG
One specialized hidden champion, for example, is Herrenknecht AG from near Lahr in Baden-Württemberg. The company is the world market leader in the construction of tunnel boring machines and large drills. These are needed in the construction of subways, car or rail tunnels. Among other things, Herrenknecht supplied the tunnel boring machine for the construction of the Gotthard tunnel. In addition to designing and building the tunnelling machines, the company, which has around 5,000 employees worldwide, offers a fully comprehensive service for all its products. The high level of specialization can also be seen in the export share of around 90%. In 2015, Herrenknecht's sales amounted to 1.082 billion euros.
Wilo SE
Almost everyone has used a product from Dortmund-based Wilo SE. Few are aware of it, however, because the family-owned company with nearly 8,000 employees and numerous subsidiaries worldwide is the global market leader for traders in exness types of accounts for pump systems in building technology. Among other things, the company develops and produces pumps for heating and air conditioning technology. In addition, the medium-sized company from the Ruhr region is known for its industrial solutions. The company's largest pump is over 30 meters high and installed in a power plant. In 2015, sales amounted to 1.317 billion euros.
Conclusion:
Nowhere are there as many hidden champions as in Germany. They are global leaders in their field and the backbone of the German economy. Their secrets are:
a high degree of specialization
high innovative strength
the targeted occupation of market niches
a strong focus on exports
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