Hidden champions are successful small to medium-sized companies that are not well-known by consumers or competitors. They produce generic goods and services at low cost, often for other companies. They are privately owned, export products, and operate in various industries. Being unknown can protect them from takeover attempts.
Hidden champions are small to medium-sized companies that are successful in their markets, but tend not to be particularly well-known by consumers and sometimes even by their competitors. The goods and services offered by this type of company, which tend to be rather mundane and generic, are often produced at very low cost and generate steady income for the companies. Sometimes, the hidden champions will advertise their products for other companies, an approach that allows them to stay further under the radar.
There are several characteristics associated with hidden champions. Companies are often privately owned rather than publicly traded. It is not unusual for companies to export a significant amount of their product to a variety of foreign markets, usually using brands that are not considered major market players. Hidden champions sometimes focus on producing goods for other, more well-known companies, eventually branding those products with the more prominent brands and using the manufacturing standards their customers demand.
For example, a hidden champion might be a family business that makes paper containers for fast food. Thanks to private label, the company can produce branded containers for several restaurants operating around the world, without anyone ever knowing that the small company generates billions of units every year and earns a constant and significant volume of business. Likewise, hidden champions can produce other goods that consumers use every day, whether under a contract with a commercial brand or even an obscure product name that consumers tend not to easily remember.
Hidden champions are found in almost every type of industry. They can produce all kinds of equipment and spare parts, household items, clothing and even food products. The quality of the products produced will vary, with some champions focusing more on quality, while others targeting the production of goods and services of suitable quality but also products that are low cost and intended for sale to lower to middle income customers.
Operating with relatively little public recognition can have the advantage of allowing covert champions to go about their business without facing issues such as frequent takeover attempts or hostile takeovers. Since the companies are not particularly well known to the buying public, hidden samples could go unnoticed by corporate raiders or at least be considered less viable, as there is no name recognition to generate publicity that would allow the predator to sell the sample assets at a profit. significant.
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