Nowadays small and medium sized companies in Japan and Europe are affiliated with big group companies in the matured folding carton and corrugated industry. This movement has been active for more than 20 years in central Europe. Now, I would like to share the current status of medium and small sized companies there.
After the establishment of the EU (European Union), major European companies spread their business base beyond their own countries and have taken steps to becoming multinational companies. ‘’M Co.’’, a major printing paper box maker, has 45 factories in 18 countries, 10,000 employees, sales of approximately 3 billion USD, and has expanded its network in Eastern Europe, reaching Turkey, Jordan and Ukraine.
In Europe a lot of big multinational companies expand by establishing subsidiaries in other countries and buying local companies. Does this lead to local medium-sized companies facing difficulty surviving?
I visited a manufacturer of solid board packaging with 50 employees in the Franconia district of Germany. The company has been in business for 123 years. They have a printing machine, a die-cutter and two gluing machines realizing the high-profit management.
When we asked them the secret of success, they told as follows:
・Do not think about making our company bigger
・Business areas are only local
・Always ensure latest production facility with high quality
・Increase efficiency and keep lead time short
Then, the CEO went on to confidently talk about other strong points of his company:
・Customer intimacy and the ability to meet customer’s needs
・The wide range of jobs it can deal with
・Short lead time with enough inventory for each customer
・Employee satisfaction that leads to their enhanced skills
(See photo: an example of value added products.)
It was a nice meeting and my dialogue with him completely changed my biased notion that small businesses are less competitive.
Example of value added products
