Research Handbooks in Business and Management series
Edited by Hemant Merchant
Chapter 13: The internationalization of hidden champions: setting the context for advancing research on emerging market strategies for German Mittelstand firms
The German Mittelstand has long been considered a cornerstone of Germany’s economic success, especially in recent years following the global economic and financial crisis. The continuing export excellence of Germany has been largely attributed to the Mittelstand, or in general to small and, in particular, medium-sized enterprises (SMEs), so-called hidden champions, that are worldwide leaders in their respective markets, often serving a well-defined niche (Simon, 2009). The German Mittelstand operates across various sectors: from manufacturing to services and from commodities to branded products. It has been at the forefront of the German growth story and occupies the center stage in the economic environment of the country. In the last six decades of post-war development, the Mittelstand has played a significant role in nation-building through its focus on excellence, achievement of efficiency, and maintenance of extremely high quality levels. The Institut für Mittelstandsforschung (IfM), a research institute dedicated to the German Mittelstand, estimates that the Mittelstand contributes 41 percent to the economic turnover of Germany, and accounts for around 61 percent of employment within the economy. According to their estimates, 95 percent of enterprises in Germany fall under this category (Glowik and Sadowski, 2014). With such a significant proportion of the German economy, the Mittelstand’s growth and success is linked closely with the economic well-being of the country.
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