advertising, branding, and promotion, solely to pharmaceutical and other
healthcare companies.
Whether it specializes by product/service or customer or an intersection of
the two, a niche company isn’t necessarily small. Lamborghini (¤586 million, or
US$650 million, in 2018 revenue) is definitely a specialist — but, arguably, so is
BMW (¤98 billion, or $110 billion). In the increasingly unspecialized post-Glass-
Steagall financial-services industry, Lazard has stayed focused on investment
banking, and booked $2.8 billion in operating revenue in 2018.
All specialist companies exist to solve a specific type of problem, or do a
specific type of job, for customers that have a specific set of needs. To win by
being narrow, specialists do six things:- They own, maintain, and demonstrate specialized knowledge. A specialist
must have something in which to specialize. That knowledge can be technical
or scientific, such as a medical specialty; or it can be deep knowledge of a
market, such as a hotel concierge would have; or both. Marketing company
GSW is a good example of a firm with specialized knowledge, and it stands
out because many other agencies choose instead to leverage their flexibility to
service clients in a broad range of industries. A marketer of medical products
and services must comply with regulations about what can and cannot be said
about products, have the ability to gain entrée to professional circles, and know
which conferences, journals, and physicians are most important to a client’s
success. That level of expertise would require generalist agencies to invest in
resources GSW already has.
Specialist knowledge must be valuable and hard to copy, but needn’t be
arcane. Merchants Metals, a division of Atlas Holdings, earns its specialist stripes
by making and distributing fencing products for commercial, residential, and
industrial use. Chain-link fencing, the company’s sole product, has been around
for more than a century and involves little in the way of specialized technology.
But selling it requires specialized sales and service. “We’re buying a commodity
and turning it into another commodity,” says CEO Andrea Hogan. “If you can’t
differentiate the product, you have to be the best at serving the customer.”
Merchants Metals, consequently, focuses on production, delivery, and
service. “Our job is to be the strongest, most reliable supply chain partner
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