Chief Executive Magazine has a story about the "little giants" — small companies that are global.
After Medrad decided a few years ago to start exporting its medical diagnostic imaging products to Germany, the Indianola, Pa.-based company stumbled immediately. It had neglected to get German regulatory approval to sell a crucial injector for the contrast media, the liquids that help produce internal images for doctors. That delayed Medrad's entry into Europe's biggest market for a year.
But when Medrad took aim at the Japanese market shortly thereafter, CEO John Friel made sure the company didn't make the same mistake. Medrad designed an entire new injector system just to meet the Japanese preference for disposable cartridges over the North American practice of refills. That helped Medrad boost its share of the Japanese market to about 50 percent today from 15 percent a few years ago. "We used to design stuff for the U.S. market, and like many companies, we felt that if it was good enough for us, it ought be good enough for everyone else," says Friel. "But we've been humbled and [we've] learned, so that attitude is long gone." Partly as a result, Friel has led Medrad to garner 36 percent of its $294 million in sales from abroad, compared with just 15 percent when he took over as CEO in 1998.
Medrad is one of a growing herd of mid-sized manufacturers across America's industrial belt—with annual sales ranging from a few hundred million dollars to a couple of billion dollars—that are demonstrating surprising success in international sales. Some have doubled or tripled the share of their overall revenues generated by sales abroad to 30, 40 and even 50 percent. Even though some experts say only large companies can play the international game, these "little giants" are succeeding in taking their specialized, niche products around the world.
It seems like a great opportunity, especially if you are in a small niche market. But my guess is that is tough to manage global operations without major financial resources.