Think Like a German: Secrets to German Brand Success
By Thomas Michael Hogg
When it comes to automakers, it’s Mercedes, BMW, Porsche, Audi, and VW. For technology, think SAP. adidas and Puma dominate the sporting goods industry. Other quality global German brands include Lufthansa, Siemens, Bosch, T-Mobile, DHL, Nivea, Hugo Boss, Bayer, Allianz and many more. When we talk about medium-sized and family businesses, Germany has more than 1500 niche market players. There is no other country in the world with so many #1 medium-sized companies. These so-called “Mittelstand” brands can be found in the following sectors: machine equipment, electrical engineering, industrial products, consumer products, automotive, construction & building products, pharma and medical technology, high-tech products, chemical products, heavy machinery, software, renewable energies, logistics, among many others. Furthermore, these niche champions are withstanding the crisis quite better than their international counterparts. But what is the secret behind these German companies?
First, it’s all about quality. The “Quality is King” approach is applied in almost every German business. The reason adidas has a reputation that precedes is simply because of its uncompromising attitude on quality.
BMW has gradually grown into a global brand due to its focus on quality. Audi is clearly a cut above the rest considering the attention and value attached to its cars. The SAP quality management vision is to consistently deliver high-quality solutions focused on improving customer satisfaction. SAP is committed to applying the knowledge to enhance products, processes, and services and continually monitoring and improving their performance.
A German product or service often meets and exceeds the expectations of the customers regarding innovations, performance, and quality. Why? There is this engineering and quality DNA we stand for. Furthermore, quality process management is an important task that affects all employees and which can only be executed successfully, if it is fully understood by involved and capable individuals. Quality testing, certifications and delivery are very common for Germans and its roots lie back in the German business history. The TÜV, which means in German “Technischer Überwachungsverein”, is the best example for a systematic approach to quality and control. The TÜV is a Technical Inspection Association that provides inspection and certification services. The origin of this association dates back to the 1800, where the industrial revolution came from engineers that had the desire and need that quality and safety standards were fulfilled. One of the most important TÜV is the TÜV Süd with 1,000 locations worldwide and 24,500 employees providing a holistic portfolio of testing, certification, auditing and advisory services. TÜV Süd claim “Add value. Inspire trust.”This embodies the essence of German focus on quality.
Secondly, German 4.0 industry innovations that drive sales and profitability are found in very specific sectors. At the most important industrial and technology fair, the Hannover Messe, there is the Hermes Award, which ranks among the world’s most coveted technology prizes. To enter and to compete for the award, a new innovative solution has to fulfill a very reasonable requirement: “Products / Solutions are judged to be especially innovative in terms of their technical and economic realization and can make a major contribution to satisfying industrial and/or social needs.”
SCHUNK GmbH & Co. KG is a famous Hermes Award winner as an international leader in innovative gripping systems. SCHUNK is both an owner-operated German family business and a global player. The company’s award-winning solution supports human-robot collaboration, making it a vital part of the smart factory tool kit. SCHUNK’s JL1 co-act gripper is an intelligent modular gripping system for human-robot collaboration that is capable of directly interacting and communicating with its human operator. The JL1’s integrated sensor systems effectively envelop the module in its own safety “bubble” by continually tracking the proximity of humans and triggering evasive action to avoid any direct human-machine contact. They also enable the module to grip, handle and assemble objects of all geometries. The module’s jaws are able to measure gripping force and have tactile sensors, so their operation is highly adaptive and responsive.
The sensor constellation also includes two cameras that enable the gripper to see its surroundings in 3D and help it to detect
workpieces. Schunk stands for true German innovation.
So, quality and innovation are the essential best practices to deliver customer value and profitable growth. World-class quality and functional innovation, how Chancellor Merkel calls it, are the two ingredients to generate a natural and strong global demand for German products and technologies. Not surprisingly, these companies pay high salaries and hire the best experts in each niche. This is possible because most of these “niche management” companies achieve a constant profitable growth performing sales and profit-wise.
Due to the pandemic, there is a profound financial disruption in all markets. Only the companies with high competitiveness and financial reserves will survive the crisis and some of them will come back even stronger. A really good example is Wilo, a German pump manufacturer, that is getting through the crisis well and wants to ramp up production soon. The developer and manufacturer of ultra-modern pump systems from Dortmund is getting through the crisis quite well because in none of their plants from China, via South Korea, India, Russia , Europe to the USA, the pump production had to be completely stopped during the corona pandemic. Even from the particularly affected northern Italy, deliveries have never been completely torn down.
Ultimately, the most competitive companies which continue to provide quality in the global value chains are going to succeed in the short and long run.
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