Chapter 22 What is a hidden champion?

Readers who got this "Case" today have probably heard of the term "hidden champion".But just like when we first encountered it more than two years ago, we may not have a deep understanding of its origin, connotation, and the enlightening value it can bring to Chinese SMEs. In 1986, German management scientist Hermann Simon met Harvard Business School professor Theodore Levitt in Dusseldorf.The two chatted about such a topic: Why is the Federal Republic of Germany's economic aggregate only a quarter of that of the United States, but the former's exports have ranked first in the world for many years in a row?The two quickly realized that it was impossible for the big German companies to keep secrets.Because they are not that different from their international competitors.

So Simon conjectured that Germany's excellent export performance is likely to be inseparable from German SMEs, especially those that are world leaders in their respective market areas.Although their names are lesser-known, these small-scale enterprises have been in the world market for decades and have achieved outstanding results.With this vague awareness, Simon began to systematically search and study the leaders of these market segments, and gave them a nickname - "Hidden Champions (Hidden Champions)".That's where the phrase comes from. Later, Simon organized the experience of more than 500 German invisible champion companies he collected into a book called "Invisible Champion". Around 2003, under the introduction of the editor-in-chief of "Win Weekly" newspaper Xiong Xiaojie, we came into contact with this book and were deeply attracted by this concept: a group of German companies that are unknown to us, with an average sales of only 130 million US dollars , the average number of employees is only 735, but the average age is 67 years old, and the average global market share exceeds 30% - behind such a set of data, there should be some kind of unique entrepreneurial spirit and growth characteristics hidden.And we are particularly interested in whether there are such mysterious niche market leaders as Simon mentioned in China, an emerging market economy country?How, if any, do they contribute to the competitiveness of the Chinese economy?What experiences do they have that other Chinese SMEs can emulate?

Referring to criterion 1 in Simon's book, we also set the following criteria to find these Chinese versions of "hidden champions": * Measured by market share, they are at least the No. 1 or No. 2 in the Chinese market, and if the market share is not clear, then it must be the leader relative to the strongest competitor it can find; *Annual sales generally do not exceed RMB 1 billion; *Public visibility is relatively low. *Private enterprise 2 In more than two years, through all possible information channels, we actually found about 100 such companies.These include: *Pearl Star: The world's largest quartz clock manufacturer

*Flying Eagle: The world's largest manufacturer of professional rowing boats *Tannoy: The world's largest supplier of key switches *Saint Allen: The third largest manufacturer of nail clippers in the world and the largest in China *Desheng: One of the largest radio manufacturers in the world *Maixin: The pioneer of China's anti-theft door market, the largest manufacturer *Asia-Pacific Power Efficiency: The pioneer and largest supplier of China's power-saving products and services market *Goldwind: China's largest wind power equipment supplier ... We interviewed 48 of these companies and compiled the experience of about 30 companies into cases. Before our visit, most of them seldom or never disclosed their growth history to the outside world. Almost every time Obtaining an interview opportunity requires a lot of effort.And our feelings after getting to know these companies are just as Simon commented in the book "Hidden Champions": "(They) are equally important to the long-term significance of the title of 'Made in China', and their stories are equally unremarkable. Known and brilliant."

People often have a superficial understanding of the metaphorical new term "hidden champion".These misunderstandings may cause Chinese entrepreneurs to miss the real essence of this theory. From March 2004 to April 2005, Hermann Simon visited China three times successively, during which he accepted a large number of interviews and questions from media reporters, scholars, students and business people.I can't remember how many times I helped him translate questions like: "Does the hidden champion mean not to be a brand?" "Is it possible for invisible champions to be produced only in some very 'uncommon' small markets?"

"Are companies that take the road of invisible champions always only small and medium-sized enterprises?" "Is the road of the invisible champion a phased strategy? As the scale of the enterprise becomes larger and larger, will it become visible one day?" ... In the final analysis, these questions or misunderstandings about invisible champions all stem from oversensitivity to one of the words-"invisible".And I distinctly remember Simon frowning once after answering a similar question from an audience member, turning to me and muttering, "I don't understand why they only care about 'invisibility' but not 'championship'." ' problem? Invisibility is a relatively common phenomenon among those companies, but it is not the key to their success." What is the real key?It is concentration, it is focus, and it is persistently doing the best in a market segment.This strategic choice is key to understanding the entire hidden champion phenomenon.

Simon admitted in his book: The path taken by the hidden champion company is actually similar to the "focus strategy" (or translated "specialization strategy") among the three general competitive strategies mentioned by Michael Porter.Among the following two cases, the experience of the radio giant Tecson's company is a good testament to Porter's "What is Strategy?" "The famous saying in the article: Strategy is trade-offs.The experience of Lovers, a sex product company, better reflects the attitude of the "hidden champion" companies on the issue of market definition: they do not regard market definition as a given external environment, but as a possible The strategic elements of their own grasp.The enlightenment from the combination of the two cases is that no matter in the most traditional industry (radio) or the most novel industry (sex products), dedicated and persistent enterprises have the opportunity to become market leaders.