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Simon kucher hermann-simon_hidden_champions

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Simon kucher hermann-simon_hidden_champions

  1. 1. www.simon-kucher.com Linkontro 2014 Hidden Champions – The Vanguard of Globalia Forte Village Resort, May 23, 2014 Prof. Dr. Dr. h.c. mult. Hermann Simon Milano office Corso Europa 13 20122 Milano Italy hermann.simon@simon-kucher.com
  2. 2. The globalized world of the future In order to understand future opportunities and risks we have to understand Globalia! 4H01X011 2
  3. 3. Headlines of the Day Financial Times, April 30, 2014 "China overtakes the US?" People’s Daily Online, May 8, 2014 "China still has a long way to go before it overtakes the United States." 4H01X011 3
  4. 4. Globalia 2025: Gross Domestic Products 21 119 20 316 14 098 6 383 4 341 4 138 4 144 2 736 2 494 2 000 USA EU China Japan Brazil Germany India Russia Italy Korea billion US-$ 4H01X011 4
  5. 5. Globalia 2025: Growth until 2025 8 210 6 537 4 033 2 415 2 253 1 249 885 828 800 400 China USA EU India Brazil Russia Japan Germany Korea Italy billion US-$ 4H01X011 5
  6. 6. 0 2 000 4 000 6 000 8 000 10 000 0 5 000 10 000 15 000 20 000 25 000 EU China Japan Brazil India Germany Italy Russia Globalia – The Globalized World of The Future Where does the music play in 2025? Gross Domestic Product 2025 USA First Global League Second Global League Growth Gross Domestic Product 2010-2025 in billion US-$ 4H01X011 6
  7. 7. Globalia – Until 2050 *Pakistan, Indonesia, Bangladesh, Egypt, Iran, Iraq, Afghanistan Source: UNO Forecast, 2010 75 125 175 Index 2010 = 100 2010 2050 203 Sub-Saharan-Africa 1,753 193 Africa 1,998 151 Islamic countries* 1,210 133 India 1,613 127 USA 403 111 Brazil 218 104 China 1,417 94 Europe 691 86 Germany 71 83 Russia 116 80 Japan 101 million 103 Switzerland 10 Index 2050 95 Italy 57 4H01X011 7
  8. 8. Eurafrica vs. Chimerica Population in millions 317 732 403 691 1 354 1 033 1 417 1 998 Chimerica Eurafrica Chimerica Eurafrica 1 765 1 671 2 689 1 820 2010 Africa Europe China USA Africa Europe China USA 2050 4H01X011 8
  9. 9. Immigration into Industrial Nations 2011 Source: OECD 114 936 118 457 141 980 210 704 248 750 266 867 307 249 354 327 416 282 453 000 841 695 1062 040 Austria Netherlands France Australia Canada Japan Korea Italy Spain UK Germany USA 1 062 040 (2012: 1.08m) 4H01X011 9
  10. 10. Urbanization The strongest trend – even stronger than demography The most important effect of urbanization is the decline in the number of children. Urbanization has a stronger impact than the pill or contraception campaigns. 4H01X011 10
  11. 11. Europe Population will grow Internal migration − from east to center/west − from south to north The north will permanently subsidize the south Europe will simultaneously become more homogenous and more heterogeneous 4H01X011 11
  12. 12. Russia: A Special Case GDP USA GDP Russia German exports 2012 2050 2012 Population $15.1bn $1.85bn (12.2% of USA, 6.4% of USA+EU) $1.47bn 143m 116m 4H01X011 - 12 -
  13. 13. 6 23 437 985 2 658 1900 1950 1980 2000 2012 Accelerating Globalization Exports per capita in US-$ 4H01X011 13
  14. 14. Lesson 1 Globalia is and will be an enormous driver of growth. In 2025 China, the US and the EU will be the three poles of the global economy. All other countries, including Germany and Italy, play in the second global league. After 2025, Africa will play an increasingly important role – with uncertain outcome. 4H01X011 14
  15. 15. How successful are individual countries in global competition, especially in exports?   4H01X011 15
  16. 16. Exports 2003-2012 Source: Comtrade United Nations International Merchandise Trade Statistics; CIA World Fact 690 1 525 2 336 3 425 3 789 4 191 4 347 5 025 6 743 11 380 11 891 12 137 South Africa Australia Spain Russia Korea UK Italy France Japan USA Germany China Billion US-$Country 4H01X011 16
  17. 17. Per Capita Exports 2003-2012 145 347 77 327 76 368 71 733 67 778 67 597 52 680 50 563 36 592 23 951 13 320 9 051 Germany Korea France Italy Australia UK Japan Spain USA Russia South Africa China US-$Country 4H01X011 17
  18. 18. Who Exports? Source: Frankfurter Allgemeine Zeitung, May 5, 2014, p. 18 Professor Marc Melitz, Harvard "Only the strongest companies export." The state doesn’t export! 4H01X011 18
  19. 19. USA (132) Japan (62) Korea (14) Italy (8) Spain (9) China (89) India (8) Australia (8) 0 500 1 000 1 500 2 000 0 50 100 150 Germany (29) France (31) UK (27) Fortune Global 500 Corporations (2012)* Do Large Companies Explain Export Performance? *Quelle: http://money.cnn.com/magazines/fortune/global500/index.html Exports in US-$ billion 4H01X011 19
  20. 20. What Is a Hidden Champion? Top 3 in the world or no. 1 on its continent Revenue less than €5 billion Not well known in general public 4H01X011 20
  21. 21. Hidden Champions by Country Number of Hidden Champions 7 7 10 11 11 13 14 14 16 19 19 23 27 29 49 67 68 75 76 110 116 135 220 366 500 Israel Luxembourg Australia Brazil Spain Norway Finland Russia Canada Belgium Denmark South Korea Poland Netherlands Sweden United Kingdom China France Italy Switzerland Austria France Japan USA Germany 1 307 Total number worldwide: 2 734 Country 4H01X011 21
  22. 22. Hidden Champions per Million Inhabitants 0.1 0.2 0.5 1.1 1.2 1.2 1.7 1.7 1.8 2.1 2.7 2.8 3.4 5.4 13.8 13.9 14.0 16.0 China Spain South Korea United Kingdom USA Italy Netherlands Japan Belgium France Finland Norway Denmark Sweden Austria Switzerland Luxembourg Germany 16.0 14.0 13.9 13.8 5.4 3.4 2.8 2.7 1.8 1.7 1.7 1.2 1.2 1.1 0.5 0.2 0.1 2.1 Number of Hidden Champions per million inhabitantsCountry 4H01X011 22
  23. 23. What is required for Hidden Championship?  4H01X011 23
  24. 24. Innovativeness Country Number of European patents 2003-2012 European patents per million inhabitants Germany 130 032 1 590 Japan 108 418 847 France 44 363 674 USA 134 306 427 Italy 21 636 357 United Kingdom 20 893 337 Korea 9 859 197 Spain 3 649 79 Portugal 249 23 Greece 244 23 Russia 462 3 4H01X011 24
  25. 25. Patent Applications in German (blue=Hidden Champion) 4H01X011 1. Robert Bosch 3602 2. Daimler 2014 3. Siemens 1910 4. Schaeffler Technologies 1832 5. GM Global Technology Operations 1566 6. BSH Bosch und Siemens Hausgeräte 884 7. Volkswagen 730 8. ZF Friedrichshafen 669 9. Audi 661 10. Bayerische Motoren Werke 658 11. Denso 512 12. Continental Automotive 424 13. General Electric 418 14. Dr. Ing. h. c. F. Porsche 405 15. Ford Global Technologies 394 16. Fraunhofer-Gesellschaft 364 17. Voith Patent 331 18. Continental Teves 327 19. Henkel 303 20. Hyundai Motor Company 293 21. Infineon Technologies 256 22. Dt. Zentrum für Luft- + Raumfahrt 233 22. Krones 233 24. Airbus Operations 199 25. OSRAM Opto Semiconductors 187 26. Giesecke & Devrient 177 27. GM Global Technology Operations 174 28. Carl Zeiss SMT 159 29. Johnson Controls 158 30. Hilti 157 31. Mitsubishi Electric Corporation 154 32. Brose Fahrzeugteile 150 33. SEW-EURO DRIVE 148 34. MAHLE International 144 35. Heidelberger Druckmaschinen 140 35. Behr 140 37. Phoenix Contact 138 38. Linde 130 39. Aktiebolaget 129 40. Evonik Degussa 116 40. XERO X Corporation 116 42. Hella KGaA Hueck & Co. 114 43. Mann + Hummel 111 44. Continental Reifen Deutschland 107 44. Benteler Automobiltechnik 107 46. König & Bauer 104 46. Osram 104 48. SMS SIEMAG 103 49. Von Ardenne Anlagentechnik 101 50. Merck Patent 98 25
  26. 26. Strong Manufacturing Base Source: Institut der deutschen Wirtschaft, IWD, Ausgabe 2, 12.01.2012 -15 -10 -5 0 5 10 15 5 10 15 20 25 30 Germany Japan Austria Switzerland Italy Belgium Spain Portugal Denmark USA France UK Greece Share of manufacturing in GDP in % Trade balance in % of GDP China Korea 4H01X011 26
  27. 27. Cost Competitiveness Source: The Wall Street Journal, April 18, 2013, p. 32 Unit labor costs; quarterly change (%) -10 0 10 20 30 40 2000 2002 2004 2006 2008 2010 2012 Spain France Germany Eurozone: +24% Introduction of the Euro = fixed exchange rates Italy 4H01X011 27
  28. 28. Labor Costs in 2014 Source: www.manager-magazine.de, May 13, 2014 Labor costs per hour in € 4H01X011 35.0 31.7 28.7 28.0 27.6 23.7 21.1 20.9 14.1 11.5 France Germany Eurozone Italy Ireland European Union United Kingdom Spain Greece Portugal 28
  29. 29. Lesson 2 Business success in Globalia, especially in exports, does not primarily depend on large corporations but on mid-sized world class companies, especially the Hidden Champions. Innovativeness, a strong manufacturing base and cost competitiveness are the factors of their success. 4H01X011 29
  30. 30. The Hidden Champions Why are they successful?   4H01X011 30
  31. 31. Extremely ambitious goals 4H01X011 31
  32. 32. Continuous growth 4H01X011 32
  33. 33. Growth Revenues in million € From Hidden Champion to Big Champion 4H01X011 Fresenius SAP Media Saturn Porsche Holding 0 5 000 10 000 15 000 20 000 1995 2012 33
  34. 34. Growth Rational Brainlab Igus 0 100 200 300 400 500 1995 2012 Revenues in million € Small Hidden Champions 4H01X011 34
  35. 35. 4H01X011 Italian Hidden Champions: Growth 416.4 779.2 1524.1 678.2 1566.1 0 500 1 000 1 500 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Revenues in million € Campari and Brembo Campari Brembo 35
  36. 36. Leading the market 4H01X011 36
  37. 37. Chemetall Chemetall is the world market leader in special metals like lithium and cesium. "The goal of Chemetall is the worldwide technology and marketing leadership." 4H01X011 37
  38. 38. 3B Scientific is the world market leader in anatomical teaching aids. "We want to become and stay no. 1 in the world." 3B Scientific 4H01X011 38
  39. 39. Deep Leadership: Sick Sick is a world market leader in sensors. "We lead by anticipating our customers’ expec- tations. Leadership means becoming the bench- mark for others. We set the standards on the world market." 4H01X011 39
  40. 40. Rosen-Group is the world market leader in pipeline inspection. "We want to create ultimate value for our custom- ers as the world’s undisputed leading supplier. It is our objective to be the world’s most competitive provider. We go far beyond present market requirements. We envision the market’s future needs." Rosen-Group 4H01X011 40
  41. 41. Lesson 3 Success always begins with highly ambitious goals. The Hidden Champions go for growth and market leadership. This is the fuel that drives them forward. 4H01X011 41
  42. 42. Focus and Depth 4H01X011 42
  43. 43. Uhlmann is the world market leader in packaging systems for the pharmaceutical industry. "We always had one customer and will only have one customer in the future: the pharmaceutical industry. We only do one thing, but we do it right." Uhlmann 4H01X011 43
  44. 44. Flexi is the world market leader in retractable dog leashes. "We only focus on one thing, but we do it better than anyone else." Flexi 4H01X011 44
  45. 45. Deep Value Chain No outsourcing of core competencies "We grow our own wood." (Faber-Castell, pencils) "We produce our own flour." (Lorentz/Bahlsen, salt sticks) "We produce all parts ourselves, based on the quality standards we define." (Wanzl) "As many parts as possible are self-produced, all of which takes place in a small region with down-to-earth people." (Miele) "More than 80% of the machinery is designed internally and guarded jealously from competitors." (Chupa Chups, lollipops) 4H01X011 45
  46. 46. Lesson 4 Only focus leads to world class. The Hidden Champions are highly focused on their technologies and their markets. Through a deep value chain they create unique products and protect their know-how. 4H01X011 46
  47. 47. Globalization 4H01X011 47
  48. 48. Globalization Global selling and marketing Focus in product and know-how 4H01X011 48
  49. 49. Globalization: Kärcher World market leader in high pressure water cleaners 100 subsidiaries in 60 countries Number of company foundations and acquisitions 4H01X011 49
  50. 50. Lesson 5 The Hidden Champions combine focus in product and know- how with global selling and marketing. Globalization is the growth booster for them. They serve the target markets through their own subsidiaries. 4H01X011 50
  51. 51. Customers and Competition 4H01X011 51
  52. 52. Market-related Strengths 36.4% 84.1% 88.7% Closeness- to-customer Image Professional marketing 88.7% 84.1% 36.4% 4H01X011 52
  53. 53. 4H01X011 Closeness-to-Customer Large corporations Hidden Champions Employees with regular customer contacts 25% 50% 37.5% Mean 5% 10% Mean 7.5% Especially: Closeness to top customers! 53
  54. 54. 4H01X011 Closeness to Customer Marketing professionalism Closeness to customer Large Firms IdealHidden Champions low high low high 54
  55. 55. Value Strategies are value-driven, not price-driven Price premium 10-20% Avoidance of price wars 4H01X011 55
  56. 56. Competitive Advantages of the Hidden Champions 4H01X011 Competitive performance Importance weaker stronger than the strongest competitor Product quality Price Economy Closeness-to-customer Systems solution Advice Service Punctuality Flexibility Advertising Distribution Cooperation with suppliers Made in Germany Patents Ease of use 56
  57. 57. Lesson 6 Closeness to customer is the greatest strength of the Hidden Champions. Their strategies are value-oriented, not price-oriented. The Hidden Champions hold strong competitive positions. 4H01X011 57
  58. 58. Employees and Leaders 4H01X011 58
  59. 59. Employees “More work than heads” High qualification Low turnover 4H01X011 59
  60. 60. Vocational Training 6% 9% German industry Hidden Champions Percentage of apprentices (Azubis) 4H01X011 60
  61. 61. Higher Qualification 9% 19% 10 years ago today Share of university and college graduates 4H01X011 61
  62. 62. Employee Turnover Rates Source: Hernstein-Institut/US Department of Labor/INSEE (Frankreich), Wall Street Journal Europe, 4. Juni 2013, S. 15 2.7% 5.3% 7.3% 8.8% 9.0% 11.0% 19.0% Austria Switzerland Daimler Hidden Champions Germany USA France 19.0% 11.0% 9.0% 8.8% 7.3% 5.3% 2.7% 4H01X011 62
  63. 63. Leaders Identity of person and purpose Leadership - authoritarian in the principles - participative, flexible in the details Leaders come young into power More women in top positions Very high continuity of the leaders - Hidden Champions: 20 years - Large corporations: 6.1 years 4H01X011 63
  64. 64. Lesson 7 The Hidden Champions have "more work than heads" and high performance cultures. Turnover and sickness rates are extremely low. They have strong leaders whose leadership is very clear in the principles, but flexible in the details. Continuity is very high. 4H01X011 64
  65. 65. Selle Royal is world leader in bicycle saddles. "Selle Royal has been a world-leading bicycle saddle brand for over 50 years. Our history is one of continuous innovation built on research, technology, and advanced design. Present in over 70 countries around the world today, with product lines designed for every type of riding, Selle Royal is the first choice for individual cyclists and major bicycle manufacturers alike. Selle Royal is our name. Supporting cyclists is our mission." 4H01X011 Selle Royal: An Ideal-Type Italian Hidden Champion 65
  66. 66. The Strategy of the Hidden Champions in Three Circles Focus Strong leadership with ambiti- ous goals Closeness to customer Competitive advantages Globalorientation High performance employees 4H01X011 66
  67. 67. … my personal Hidden Champions Story 4H01X011 67
  68. 68. Simon-Kucher & Partners Goal: Market leadership and growth Focus: Marketing, sales, pricing Global presence 4H01X011 68
  69. 69. 4H01X011 World leader in price consulting Simon-Kucher is world leader in giving advice to companies on how to price their products. BusinessWeek No firm has spearheaded the professionalization of pricing more than Simon- Kucher & Partners. William Poundstone in Priceless In pricing you offer something nobody else does. Professor Peter Drucker No one knows more about pricing than Simon-Kucher. Professor Philip Kotler 69
  70. 70. 1 Simon-Kucher & Partners 2 Boston Consulting Group 3 McKinsey & Company 4H01X011 Market leadership Source: manager magazin August 2011/IMB, survey among German top managers Competence ranking “Sales, Marketing, Pricing" Simon-Kucher in German-speaking countries: #1 in 2007, 2011 and 2014! manager magazine/brand eins 70
  71. 71. 4H01X011 Growth 3 4 5 7 13 18 19 22 27 35 46 56 71 90 112 130 147 165 187 220 248 283 354 436446 466 550 625 694 714 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 5/2014 Employees Revenue 2013: €152 million 71
  72. 72. 4H01X011 Global Presence Germany, Bonn Switzerland, Zurich Italy, Milan France, Paris USA, San Francisco Germany Munich China, Beijing Turkey, Istanbul Germany, Frankfurt USA, New York Germany, Cologne USA, Boston England, London Austria Vienna USA, Miami Denmark, Copenhagen Netherlands, Amsterdam Spain, Madrid Japan, Tokyo Singa- pore Australia, Sydney Poland, Warsaw UAE, Dubai Chile, Santiago de Chile Brazil, Sao Paulo Belgium, Brussels Luxem- bourg Canada, Toronto 72
  73. 73. Hidden Champions Worldwide Spain 1997/2010 Hungary 2010 Italy 2001/2007/2011 Brazil 2003 India 2009 Egypt 2008 Germany 1997/2007/2012 China 1997/2000/2005/2009 USA 1996/2009 Lithuania 2009 Netherlands 1997/2009 Slovenia 2010 Japan 1998/2012 Sweden 2013 Vietnam 2013 Korea 1997/2008/2014 Poland 1999/2009 Serbia 2007 Cezch Rep. 2010 Russia 2005 Turkey 1999 France 1998/2012 4H01X012 Taiwan 1996/2004/2013 73
  74. 74. Management Thinkers 2013 The most influential management thinkers in German-speaking countries 2013. www.managementdenker.de, Internet Survey, n=262 7% 7% 8% 12% 18% 26% Fredmund Malik Jack Welch Guenter Faltin Michael E. Porter Hermann Simon Peter F. Drucker 4H01X011 74
  75. 75. 4H01X011 Hermann Simon Professor Simon has published over 30 books in 26 languages, including the worldwide bestsellers Power Pricing, Manage for Profit, Not for Market Share and Hidden Champions. His most recent books are “Hidden Champions – Aufbruch nach Globalia (Hidden Champions – The Vanguard of Globalia, so far published in Germany and Korea) and “Confessions of the Pricing Man” (forthcominng). Simon was and is a member of the editorial boards of numerous business journals, including the International Journal of Research in Marketing, Management Science, Recherche et Applications en Marketing, Décisions Marketing, European Management Journal as well as several German journals. Since 1988 he has been a columnist for the business monthly Manager Magazin. As a board member of numerous foundations and corporations, Professor Simon has gained substantial experience in corporate governance. From 1984 to 1986 he was the president of the European Marketing Academy (EMAC). Simon is co-founder of the first Special Purpose Acquisition Company (SPAC) listed on the German Stock Exchange in Frankfurt, which acquired Exceet Group S.E. in July 2011. A native of Germany, he studied economics and business administration at the universities of Bonn and Cologne. He received his diploma (1973) and his doctorate (1976) from the University of Bonn. Simon has received numerous international awards and holds honorary doctorates from IEDC Business School of Bled (Slovenia), from the University of Siegen (Germany) and from Kozminski University Warsaw (Poland). He is a honorary professor at the University of International Business and Economics in Beijing. Hermann Simon is chairman of Simon-Kucher & Partners Strategy & Marketing Consultants with offices in Amsterdam, Beijing, Bonn, Boston, Brussels, Cologne, Copenhagen, Dubai, Frankfurt, Istanbul, London, Luxembourg, Madrid, Miami, Milan, Munich, New York, Paris, San Francisco, Santiago de Chile, Sao Paulo, Singapore, Sydney, Tokyo, Toronto, Vienna, Warsaw and Zurich. Simon is an expert in strategy, marketing and pricing. He has an extensive global range of clients. In the German language area he was voted the most influential management thinker after the late Peter Drucker. Before committing himself entirely to management consulting, Simon was a professor of business administration and marketing at the Universities of Mainz (1989-1995) and Bielefeld (1979-1989). He was also a visiting professor at Harvard Business School, Stanford, London Business School, INSEAD, Keio University in Tokyo and the Massachusetts Institute of Technology. From 1995 to 2009 he was CEO of Simon-Kucher & Partners. 75

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