Sdiptech_Profitable_niches

Profitable niches

In all markets large scale corporations co-exist with niched companies. Both are necessary, but they cater to different needs.

Large scale corporations are based on volume as a competitive edge, standardized products and a focus on all kinds of synergies. The model depends on a hierarchical thinking whereby, in effect, “a central brain” makes important decisions on the behalf of many others. As a result innovation and entrepreneurship becomes under-developed and a more bureaucratic culture evolves.

In contrast, Sdiptech’s focus is clear: we are a niched company with the opposite needs and characteristics.

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Better margins

Large corporations can not (and will not) cater to all needs. Instead, niched companies tailor their propositions to meet more complicated needs and as a result, enjoy higher margins.

Higher barriers to entry

A deep niche contains a uniqueness fit for a specific purpose developed over years. Built-in protections such as extensive know-how, unique machinery, respectable market brands and being close to our customers are at the core of a strong niche.

Too small to enter, too complicated to copy

Despite the profitability of a deep niche, large scale corporations are less willing to enter because the segment is too small for them. At the other end of this spectrum, small players are faced with comparatively high investments, and relative risks and deep niches become too complicated to copy.

Flexibility as a competitive edge

The ability to understand special requirements in the market and to tailor effective solutions creates unique value propositions. Well-managed niches are flexible and provide above-average margins.

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