a presentation for foreigners about how to travel in Germany.
Simon kucher hermann-simon_hidden_champions
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. The globalized world of the future
In order to understand
future opportunities
and risks we have to
understand
Globalia!
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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."
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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-$
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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-$
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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-$
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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
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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
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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)
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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.
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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
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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) $1.47bn
143m
116m
4H01X011 - 12 -
14. Lesson 1
Globalia is and will be an enormous driver of growth.
In 2025 China, the US and the EU will be the three poles of
the global economy. All other countries, including Germany
and Italy, play in the second global league. After 2025,
Africa will play an increasingly important role – with
uncertain outcome.
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16. Exports 2003-2012
Source: Comtrade United Nations International Merchandise Trade Statistics; CIA World Fact
690
1 525
2 336
3 425
3 789
4 191
4 347
5 025
6 743
11 380
11 891
12 137
South Africa
Australia
Spain
Russia
Korea
UK
Italy
France
Japan
USA
Germany
China
Billion US-$Country
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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-$Country
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18. Who Exports?
Source: Frankfurter Allgemeine Zeitung, May 5, 2014, p. 18
Professor Marc Melitz, Harvard
"Only the strongest companies export."
The state doesn’t export!
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19. USA (132)
Japan (62)
Korea (14)
Italy (8)
Spain (9)
China (89)
India (8)
Australia (8)
0
500
1 000
1 500
2 000
0 50 100 150
Germany (29)
France (31)
UK (27)
Fortune Global 500 Corporations (2012)*
Do Large Companies Explain Export Performance?
*Quelle: http://money.cnn.com/magazines/fortune/global500/index.html
Exports in US-$ billion
4H01X011 19
20. 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
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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
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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
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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
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25. Patent Applications in German (blue=Hidden Champion)
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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. 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
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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
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28. Labor Costs in 2014
Source: www.manager-magazine.de, May 13, 2014
Labor costs per hour in €
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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. 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.
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33. Growth
Revenues in million €
From Hidden Champion to Big Champion
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Fresenius
SAP
Media Saturn
Porsche
Holding
0
5 000
10 000
15 000
20 000
1995 2012
33
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."
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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
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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."
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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
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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.
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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
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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
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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)
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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.
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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. 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.
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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. 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.
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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. 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
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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.
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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. 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
68. Simon-Kucher & Partners
Goal: Market leadership and growth
Focus: Marketing, sales, pricing
Global presence
4H01X011 68
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. 1 Simon-Kucher & Partners
2 Boston Consulting Group
3 McKinsey & Company
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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
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. 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
