HID Global – example of the “hidden champion”

HID Global – example of the “hidden champion”

I'm sure that most of you aren't familiar with a business term “hidden champion”. Hidden champion is a company working for small niche market with the need to deal on the global markets in order to be able to work on the economies of scale. Presence on the world markets leads the company to the whole complex of the specific behavior reflected in corporate culture, innovation mechanism, producer-customer relationship (high level of co-dependence) etc.

Hidden champion concept was first time described by Hermann Simon, German author and marketing consultant. Topic is very well covered in the book Hidden Champions: Lessons from 500 of the World's Best Unknown Companies (S. Hermann, Harvard Business Press, 1996), which has been translated into many languages.

Are you a hidden champion?

Germany is leading European economy with strong export. Lot of us knows German main businesses such as BMW, Volkswagen or Siemens, but the country's export strength is not determined only by a big corporations. Hermann discovered that also the large number of the SME (small and medium enterprises) help to sustained Germany's position as the top exporter of the world.

So, who's the hidden champion? According to the method created by Herman, company must meet several criteria:

1. Working in small, specific niche
2. № 1 (or № 2) in global market (or company's continent) determined by market share
3. Low level of general public awareness

Where are the hidden champions located?

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Hidden champions can be easily found in German speaking countries (Germany, Austria, Switzerland) or in central and north Europe. Did you know that there is a niche market “banknote printers” (money printing). Leading company making such machines is KBA NotaSys from Lausanne (Switzerland) owned by Koenig & Bauer (Germany). There's even a derivative of that niche: Security (banknote) paper and security (banknote) ink.

There's lot of invisible and successful companies also in the US. Very good example is HID Global (Austin, Texas) founded in 1991. HID Global is the firm making various physical access control products (proximity access systems, cards and card readers, printers, encoders). Company supplies world markets with “logical access control solutions, and secure issuance solutions.” Its other business activities include “virtualization technology, cashless payment, government ID, RFID for industry and logistics and Animal ID solutions and professional services.

Notable customers are Banco do Nordeste of Brasil (Brazil), China Pacific Insurance Co., or Amway India. Company has global network of dealers and servicemen. You can find HID cards in Toronto (Canada) as well as in Moscow (Russia). In 2000 was HID Global acquired by Assa Abloy AB (Sweden).

Hidden champions can be found all around the world with many of them located also in Japan or China. Here is list of the hidden champions selected by Herman Simon in 2009. It's very interesting strategy how to build a company.

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