Out of the spotlight, multibillion-dollar businesses are dominating niche markets and creating a positive culture for their workers. So what can MBAs learn from the ‘hidden champions’?
If you were asked to name one of the most successful companies in the world, maybe you’d say Apple.Apple closed out last year with a 15.8% worldwide market share and is one of the most famous brands on the planet. But not every successful business is so well-known.
Around the world there are thousands of businesses that are dominating niche markets, with revenues of up to $5 billion and some with more than 50% of the global market share in their industry—and you’ve probably never even heard of them.
They are called ‘hidden champions’.
“What’s the secret?”
“The term ‘hidden champion’ actually means companies that are [very successful] in selling their specialized premium quality products, but somehow are not well-known to the public,” explains Dominic Chan, associate professor of practice in entrepreneurship at CUHK Business School in Hong Kong.
“They are known to their target customers, but you and I wouldn’t even have heard of them—they are the hidden champions being number one, two, or three in the world.”
Dominic explains that hidden champions are usually responsible for highly-specialized products—maybe a specific type of industrial drill, special materials, or high-pressure water cleaning systems—but he believes that they hold important lessons even for businesspeople from more generalized industries.
“The reason that we would like to learn about them is to find out, ‘What’s the secret?’” he explains. “How do they become number one or two in the world? How do they manage their companies, attract and retain talent?”
Dominic takes his MBA students overseas to see hidden champions in action, all the way from Hong Kong to Germany, where most hidden champions are found.
During these international field trips students get to see first-hand the key factors in the success of the hidden champions, speak directly to the executives, and consolidate their learning into a written report.
Even for those with their sights set on big brands, Dominic says, there are plenty of insights to be gained.
Attracting top talent without a brand name
For instance, Dominic notes that hidden champions typically have a very loyal employee base, creating a “family atmosphere”, as employees are well-taken care of throughout their career.
“Some hidden champions in Germany and Japan occupy almost an entire town,” Dominic notes. “They’ll take care of employees’ lives, not just within the company. They have medical facilities, they have schools, they have canteens—the total package!”
This is an important lesson for his MBA students to learn, and seeing it first-hand through a field trip is the best way for them to understand the benefits.
“Because they’re not well-known [brands], they need another way to attract and retain talent without that brand name, and building a loyal employee base means a lower attrition rate,” Dominic says.
“And by the way, why not! Companies should take good care of their employees anyway!”
Identifying areas for economic growth
This is a valuable lesson for students who want to make their careers in Hong Kong, which Dominic sees as a potential growth area for hidden champions.
“Hong Kong was a manufacturing base in the ‘70s and ‘80s, but we’re no longer doing that,” he says. “When it became cheaper to produce products in China, Vietnam, and Cambodia, Hong Kong lost that advantage.
“Instead of [investing in] more research and development and creating higher-value products, we simply moved the manufacturing base to somewhere cheaper to follow the lower labour cost.”
By contrast, Dominic points out, hidden champions in Germany exhibit much more sustainable business development, because they produce only high quality, hard-to-make necessities that do not fluctuate in demand.
If Hong Kong were to become a hidden champion hotspot, not only could the territory help to safeguard itself against recession, but it could also capitalize on its existing business culture. Hong Kong historically has a strong base of family businesses, much like many hidden champions.
Given the city’s status as a burgeoning Asian startup hub, the opportunity is there.
With the knowledge and experience gained on the field trip to Germany, Dominic’s MBA students are in a good position to initiate this change—to create opportunities by “Doing one thing and one thing only, but doing it better than anyone else.”
Student Reviews
One of a kind
I studied Bioinformatics at CUHK last year. It was the only Master's degree in Hong Kong in this field. This program developed my analytical skills and equipped me to be a Bioinformatician in a very practical way.
I enjoyed my year here and met classmates from different parts of the world. If you are thinking to enhance your profile, this degree program would be a good option.
general education courses, unique college system, large campus
The university facilitates multi-dimension and interdisciplinary learning. In social science faculty, we need to choose courses as our faculty package from other departments (architecture, psychology, sociology, etc.) to learn more than our major required courses. We are also required to finish general education courses, which aid our critical thinking and humanistic sensibilities. I do recommend the social science broad-based program, and the professors I met so far are all responsible and erudite.
LLM
The faculty of law is relatively new. You do not need to have a LLB to pursue a LLM, which is special. The taught programme is great for mature students who want to obtain legal knowledge.
CUHK has good teaching staff too.
Amazing Campus and Great Educational Environment
Not only is CUHK's main campus breathtaking, it provides for a good educational environment for students. The university is well-equipped with modern and up-to-date facilities to help students with their study. We have 8 libraries in total around the campus; one for media, one for architectural studies, the medical library and the law library. The Professors are always helpful and are happy to talk to students when needed.
Moreover, the college system within the university brings forth the uniqueness of CUHK. Each student belongs to a different college, and in that students are able to meet different peoples from different countries and students from different faculties.
I think CUHK provides for a well-rounded university life for all students.
exthrillating
One of the most down to earth places in HK. A great opportunity to learn and embody the local culture. Also had one the most beautiful campus in Hong Kong up on the hillside. Glad to have graduated here.
Innovative and Supportive
My university provided me with all the support I needed, and encouraged me to be up to date with all the new developments in the world. They also provided me with the incentive to excel at what I do, and they take much pride in my achievements. I have had a very rewarding university experience.
Small, New But Friendly Law School
To being with, I think the campus of CUHK is the best and the biggest in Hong Kong, with fresh air and trees everywhere.
I am an undergraduate Law student at CUHK and I think the teaching here is great, with very friendly and nice professors and the new Lee Shau Kee Building.
In terms of the courses offered by CUHK, as one of the largest universities in Hong Kong, CUHK is an all-rounded university, offering a wide range of courses to students. Students may take the introductory courses of discipline other than their own major, or even declare a minor.
For law electives, due to the small amount of intake, the variety of law electives are not that huge. However, the Faculty is offering some international programmes, which can be treated as law electives, but at the same time, provide us with an opportunity to travel and know more about the legal system of another country.
The career support from the Faculty of Law is also amazing. The Faculty will organise CV Sessions and talks on how to get an internship from law firms or mini-pupillage from barrister's chambers. Each student will also have a Distinguished Professional Mentor, which is a current legal profession, providing us with practical advices and updates of the legal field.
Finally, from my personal experience, I think the students in CUHK are friendly and genuine. As Law students, competition is inevitable for grades, GPAs, vacation schemes and training contract. However, I think the competition in CUHK Law School is a positive one, in a sense that help us grow together, instead of fighting with each other no matter what. That is the biggest reason why I am having a very good time here in CUHK Law School.
A place to explore your interests
As a law graduate from CUHK (both undergrad and post-grad), I realise that I had many opportunities to explore my areas of interests (legal and non-legal both). The faculty/university requires us to take a certain number of non-law electives, and offers a plethora of courses to choose from. Personally, I took 3 modules in Korean --I can't say it's made me highly proficient, but it's definitely given me a good foundation (I can walk into a Korean restaurant and confidently order food, at the very least). The fact that language courses are offered also provides students who are more financially constrained an opportunity to learn a language without having to shell out a premium for a decent language course. On top of that, we have a range of law electives as well. I know of classmates who have developed lasting interest in different areas of law because of the electives they took in school. The two electives that I would say have changed me is (i) mooting and (ii) family law. I think my experience in an international commercial arbitration moot competition has helped tremendously in formulating legal arguments and legal writing. On the other hand, taking a family law elective has made me very interested in the family law practice, especially in terms of child rights. For these experiences which I have gained, I'm grateful for the opportunities provided by the school.
One main issue most students I know have is with the way our GPA is calculated and the lack of transparency in terms of how the honours system works. As our GPA is marked on a curve. it's highly unrepresentative of what we have achieved as individuals. Given that our GPA is the only criteria that is looked at when we apply for the compulsory post-graduate law course (mandatory should we want to practise law and/or be trainees in Hong Kong), it will put our own students at a distinct disadvantage when we compete for limited spaces with students from schools where GPA is not on a bell curve.
Valuable time in CUHK
I like the learning environment and people at CUHK. Surrounded by hills and Tolo Harbour, CUHK provides a balance between nature and hustle. You can always escape from the busy study life and meet your friend around the big campus for different activities.
