Globalization

How does a company ascend to world market leadership? Certainly not by staying at home and waiting for customers to call on it. Instead, the hidden champions venture into the world and offer their products wherever their customers are. This process of globalization typically takes generations and requires unending stamina. In the preceding chapter we learned that the hidden champions operate in narrowly defined and therefore relatively small markets. To expand these markets, the hidden champions have chosen globalization as the second pillar of their strategy besides focus. This means that they are narrow in the substance of their business and wide in the regional dimension. The hidden champions’ world markets are far larger than their respective home markets. Ten years ago their main markets were in Western Europe and North America. In the current process of rapid globalization the hidden champions increasingly expand their scope into Asia and Eastern Europe. They are simultaneously confronted with numerous attractive new markets that makes setting priorities very difficult. In the decades after World War II, entries into new markets were executed in a very entrepreneurial manner (i.e., the entrepreneur made the decision and sent his troops into the new country without much instruction). The current generation of hidden champions managers relies on a more professional and systematic preparation. Mental internationalization is at the same time a precondition for and a consequence of successful globalization. The participants themselves (i.e., leaders, managers, and employees) change in this process. Increasing knowledge of foreign languages and cultures gradually removes the shortage of internationally experienced and versatile personnel that was characteristic of the early stages. In a globalized economy Western Europe is in a geostrategically advantageous location. From Europe companies in all important countries can be reached within normal office hours, and global travel times are considerably shorter than from Asia or America.