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Management article
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Reference no. 92208
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1992

Abstract

Germany''s small and midsize companies, known as the Mittelstand, are a hidden source of wisdom on global competition. Companies like Krones, Korber/Hauni, Weinig, Webasto, and TetraWerke dominate their markets with world market shares ranging from 70-90%. When combined, they account for the bulk of Germany''s trade surplus. The success of the Mittelstand lies in a set of five common practices. These companies all: 1) combine a narrow product-market focus with broad geographic scope; 2) perform best in the areas customers care most about; 3) balance closeness to customers with deep technical knowledge; 4) rely on themselves, especially for R&D; and 5) foster close ties between managers and workers.

About

Abstract

Germany''s small and midsize companies, known as the Mittelstand, are a hidden source of wisdom on global competition. Companies like Krones, Korber/Hauni, Weinig, Webasto, and TetraWerke dominate their markets with world market shares ranging from 70-90%. When combined, they account for the bulk of Germany''s trade surplus. The success of the Mittelstand lies in a set of five common practices. These companies all: 1) combine a narrow product-market focus with broad geographic scope; 2) perform best in the areas customers care most about; 3) balance closeness to customers with deep technical knowledge; 4) rely on themselves, especially for R&D; and 5) foster close ties between managers and workers.

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