How to recognize an International Niche Market Leader?

Prior to establishing whether an international niche market player holds a substantial market share in its product niche across the globe and is a top 3 player in it; getting on the tail of these companies may be hard. In fact, once you have spotted them, the question of “are they a global leader in their business according to e.g. market share standards?”, is a rather light exercise. The hard part is to actually find clues and traces of International Niche Market Leaders and to get a sense of whether you are actually confronted with (one of) them.While it has been typical to refer to this kind of companies as organizations that display an uncommon high level of common sense, one could also refer to them as companies that behave in a counter-intuitive way. And that can set a lot of people (including analysts and investors) on the wrong foot.

Whereas in modern times it has become fashionable for companies to aspire becoming a household name, to look for praise for their products, and to gain the favour of (social) media; INMLs (or “líderes en nichos de mercados internacionales” en castellano) do often the opposite. In brief:
•Do not expect them to produce fancy stuff or to carry throbbing names
•Do not expect them to brag or boast out in the opening about happenings and achievements
•Do not expect them to magnify their market relevance

While the first two issues have already been touched upon in previous posts (see: ); for the record, some illustrations in this regard:

To start with, it is not uncommon that they carry a boring name and/or that the products or services they offer seem rather dull. Alternatively, the companies in question (or their products) can facilitate unattractive activities that only few others set out to specialize in. One such example could be the business for “tripe cleaning machines”. Evidently, it does not have to get that nasty: shopping carts or industrial tubes for specific purposes may do just fine to develop a (safe) haven in a not-so-crowded market space.

On the issue of parsimony public relations and ditto public image building: an outgrown INML in which an Asian corporation took a stake recently, was asked by its new stakeholder about how to divulge the notice. To their surprise they were told that the company had no active communication policy on this kind of issues.

With regard to (not) emphasizing their market relevance; INMLs tend to act with prudence and canniness.

On the one hand, they have an interest to let sleeping dogs lie. This can be illustrated by a quote like: “We carved out this niche for ourselves and have no interest in being discovered by (too many) others.” Furthermore, and in order to not magnify their market relevance, INMLs can apply their clever niche delineation skills ‘in reverse’. While a global leader in –to stick to that example- the market for edible intestines’ packaging machines could profile itself as such (and probably will towards its customers), it may prefer to downplay its market status in that niche vis-à-vis (potential) competitors by arguing that it is -just- a player in the production equipment industry or a supplier to the food industry.

On the other hand, and while it may be difficult for other niche players to not notice how their competitors are doing, INMLs may not have an interest in revealing how their business fares. This is nicely exemplified by the following quote: “Our competitors think that we are acting in a shrinking market. Let them think that way; we know better.” Moreover, the fact that INMLs regularly act in mature industries can provide an additional protection layer to them, because that kind of industries are often considered to be no-growth markets. And while growth industries tend to attract much more players, no-growth industries do so a lot less. Meanwhile, a company with a clear advantage over others in a mature business may still benefit a lot from arrogating market power unto itself.

As a consequence, INMLs have their own ways to shield off their business performance and to operate as a hidden champion (or “campeon oculto” en castellano) and provide their own interpretation of the following French proverb: “Pour vivre mieux, vivons cachés!”

Bart Kamp

Bart Kamp es responsable del área de Estrategia de Orkestra y profesor de gestión estratégica de nuevas empresas en Université Catholique de Louvain-la-Neuve (universidad católica de Lovaina) en Bélgica. A lo largo de su trayectoria profesional investigado en áreas como las políticas de innovación, la competitividad industrial, el clima de inversión (extranjero), las políticas de transporte e infraestructuras y otras cuestiones de desarrollo regional para varias instituciones multilaterales –como la Comisión Europea– y organizaciones gubernamentales y multinacionales de Bélgica, Países Bajos, Luxemburgo, Alemania, Francia, Portugal, España, Rumania y Lituania. Cuenta con una amplia experiencia en diseñar y dirigir procesos de evaluación de criterios múltiples, análisis de costo-beneficio, evaluaciones de impacto y análisis de redes en relación con medidas de política estratégica y proyectos de inversión empresarial.

One thought on “How to recognize an International Niche Market Leader?

  1. Hello Bart,

    You have just given a very interesting talk for Orkli in Ordizia and I was interpreting in the back of the room. My question is not related to the talk, but to where you are located? I only ask because before you spoke, Sabin said you lived near Pamplona. I also do – in Obanos (near Puentelarreina). I found it rather funny not to be the only foreigner that enjoys the area around Pamplona.

    Loved your talk BTW, very interesting.


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