© Roland Berger Strategy Consultants

Germany's shining stars

Best of European Business Germany
Eight of Germany's leading companies were awarded "Best of European Business" prizes at a ceremony in Berlin. Their capacity to innovate was highlighted as a unifying factor among all winners.

"We are standing on British territory to recognize the achievements of German companies – and this is how we intended it, " Burkhard Schwenker, CEO of Roland Berger Strategy Consultants said in his opening speech. To speak of successful German companies is to speak of the European context in which they operate, he noted. Highlight success stories of companies which have been able to capitalize on their ideas, courage and leadership and have thus propelled themselves into the league of leading European and global enterprises was the declared goal of the "Best of European Business" awards ceremony.

In the appreciation speeches for the winning companies the strength of German companies was underlined. Car maker Porsche, for instance, was able to leave global competition in the dust with respect to its growth figures. Tire maker Continental went from being a financially stricken company to a highly profitable systems supplier in the short time span of a few years. Laser and machine tool specialist Trumpf "racked up patents much like other people do parking tickets – around 80 a year," Steffen Klusman, Editor in Chief of the Financial Times Deutschland pointed out. Klusmann and Arno Balzer, Editor in Chief of the German manager magazin co-anchored the awards ceremony. Both told some very real success stories with respect to innovation, growth and value creation, the latter of which was often accompanied by the creation of new jobs. Chemical company Altana, for instance, hired 2500 new employees between 2000 and 2004, while Porsche brought around 2000 new colleagues into their workforce.
Annette Schavan
Annette Schavan
Annette Schavan, Germany's designated education and research minister- underlined the importance of the positive message a competition such as "Best of European Business" could send: "Unemployment and budget problems are the focus of our coalition talks at the moment. Your initiative is an important one as it showcases the strength of German companies," she said.

Realizing Europe's strengths often needed a second look, Schwenker said. A superficial look at the state of the European economy was by no means a positive one. The US economy grows twice as quickly as the German economy over the same time frame. Larger corporations in the US have a net income that exceeds that of European competitors by 23% and their market capitalization is 58% higher. Leaving the research-heavy industries out of this analysis, however, the image quickly shifts in favor of the Europeans, Schwenker noted.
Burkhard Schwenker
Burkhard Schwenker
In these other areas, Europe boasts a higher percentage of research and development than the US. The export of goods from the Eurozone and their participation in global trade makes up 25%, and thus far exceeds the US (15%) and Japanese (9%) share. In many key industries including automotive, chemical and telecommunications, turnover has increased much more rapidly than in the US or Japan. In the pharmaceutical industry, the energy sector and in logistics, European companies' profit margins are the highest in the world. "All of these facts speak for themselves and demonstrate that European companies are sustainable and can compete on the global market," Schwenker said.

But the Head of Roland Berger Strategy Consultants also pointed to the importance of strong domestic markets for European companies to flourish – a reality that is often forgotten in times of tough global competition. The bulk of the 500 largest corporations in the world generated most of their revenue in their domestic markets. Excellent infrastructure, well-educated employees and an effective cluster of research facilities are good reasons to remain rooted in one's own domestic market.
Best of European Business Winners
Best of European Business award winners
This impression was echoed by Trumpf owner Berthold Leibinger: "90% of our product development is done in Europe – 80% of that here in Germany." The country remained a strong location for innovation, he said. Burkhard Göschel, product development manager for the BMW Group was particularly proud of the fact that his company leads the German rankings of most-sought after employers. "Thanks to our reputation, we attract and retain employees that are able to perform at the top of their game," Göschel said.

None of the evening's winners neglected to recognize their employees as the most important factor in realizing their success. According to Burkhard Schwenker this was also one of the key lessons to be drawn out of the analysis on Europe's leading companies: "All of our winners throughout the seven competitions emphasize motivation, confidence, integrity and a healthy sense of optimism through strong leadership and core values. That's the way to build trust in a company."

Annette Schavan hoped to see the same kind of team spirit in the country's new government: "We will not have a Minister for Innovation – we will be a government of innovation."
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A profile of the winning companies:
  • Porsche
    Growth (Large Enterprises)

    With an annual growth of 15% on average over the past five years the car manufacturer's recent history is an unparalleled success story. Despite increased competition and pressures on price in the global automotive market, Porsche was able to widen its market share and focus on new, dynamic areas in the premium segment. Thanks to its successful growth strategy Porsche was able to hire 2000 additional employees, increasing its labor force from 9,700 in 2000 to 11,700 in 2004.
  • Altana
    Growth (Medium Enterprises)

    The pharmaceutical and chemical company was consistent in its approach to internationalization and is now reaping the success generated by this strategy. 82% of sales are now generated abroad – almost half of these in the strong growth markets in the US and in Asia. Cooperation with strong partners, including Wyeth in the US, was a focal point of the company's strategy. Since 2000, sales have increased by 11% - showing a much stronger performance than the overall global pharmaceutical market. Altana was also able to create 2500 jobs over the past five years.
  • Continental
    Value Creation (Large Enterprises)

    Out of a very weak starting position, Continental managed to develop itself into an exemplary company. Thanks to the unique combination of a breadth of know-how in brake and tire technology, economic stability programs, electronics and sensor technology, Continental has become an international high-tech supplier achieving a top position with respect to innovation and future-oriented products. Sustainable and value-oriented growth are the focal points of the company's strategy. This goes to the benefit of share-holders: aside from record dividends, they profited from a rapid rise in the share price of around 50% in 2004.
  • K+S
    Value Creation (Medium Enterprises)

    K+S has achieved an outstanding international position. The company belongs to the top few providers of standard and special fertilizers, plant care and salt products. It is equally successful with industrial users and private consumers with its tailor-made products and its strong brands, including COMPO. By streamlining its processes, efficient production and the full exploitation of synergies the management of K+S has been able to boost the value of the company effectively. Proof for this can be found in the Total Shareholder Return, which has grown by 22% on annual average over the past five years.
  • BMW Group
    Innovation (Large Enterprise)

    An integral part of the BMW Group's premium-brand strategy success lies in the above-average amount it invests in research and development. While the industry spends around 4.3% of its sales for new technologies, BMW spends 5.3% on innovation. In addition, suppliers are brought into the R&D process early on. The large number of innovations in the areas of driving safety, user friendliness and motor development are core components of BMW's brand image.
  • Trumpf
    Innovation (Medium Enterprise)

    The great commitment to innovation is clearly visible at Trumpf, the machine tool producer and laser specialist. The company invests 8% in R&D – twice as much as the industry average. In addition, Trumpf works closely with universities and supports the frequent exchange between international expert teams. Clients are also brought into the development of new products early on in the process. That this commitment pays off is clearly visible in the sales revenue generated by the products developed over the past four years.
  • BASF
    New Europe Strategy (Large Enterprises)

    By concluding the deal Russian Gazprom, BASF has managed to create the first partnership of equals in the energy sector between a Western and a Russian company. The joint production and marketing of Russian gas plays a major part in guaranteeing energy supplies for Germany and Europe. In the Eastern European chemicals industry, BASF is already the number one in the market and its continued growth seems right on target. BASF has announced it wants to double sales in Eastern Europe by 2010.
  • Axel Springer
    New Europe Strategy (Medium Enterprises)

    The publishing house realized the possibilities afforded by the Central and East European market early on and was able to create an impressive product portfolio in the region. FAKT, Poland's most successful daily newspaper is part of this success story, as is the creation of the largest publishing house in Hungary, Axel Springer Budapest. Aside from successful licensing deals, the company has managed to anchor internationally renowned products, such as Auto Bild, firmly in the Eastern European market.
Oct 26, 2005

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