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Market and Focus

In: Hidden Champions of the Twenty-First Century

Author

Listed:
  • Hermann Simon

    (Simon - Kucher & Partners)

Abstract

The selection and definition of a market are the starting point for strategic planning. How do the hidden champions define their markets? How do they conduct their businesses in these markets? The hidden champions usually focus on narrow markets. Many of them do not feel restricted by customary market boundaries, but define their markets autonomously as part of their strategy. In doing so, hidden champions often achieve high market shares with sometimes monopolistic positions; thereby establishing effective barriers to entry. But high market shares in narrow markets can limit the opportunities for growth. Considering the hidden champions’ ambitious growth targets, this is a serious problem. To cope with this dilemma they do not abandon their growth targets, but instead choose the route of “soft” diversification. This is the greatest shift in strategy in the last ten years. Nevertheless, the hidden champions endeavor to maintain their traditional strengths. One way to achieve this is through consistent decentralization.

Suggested Citation

  • Hermann Simon, 2009. "Market and Focus," Springer Books, in: Hidden Champions of the Twenty-First Century, chapter 3, pages 59-88, Springer.
    • Handle: RePEc:spr:sprchp:978-0-387-98147-5_3
    DOI: 10.1007/978-0-387-98147-5_3
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