Case Study Description of Danaher Corporation, 2007-2017
On July 2, 2016, Danaher Corporation completed the spinoff of Fortive Corporation. The previous day, Danaher's stock price had reached an all-time high. In 2015, Danaher had decided to split off its test and measurement, fuel and fleet management, and automation businesses, leaving the "new Danaher" focused on life sciences, diagnostics, dental, water quality, and product-identification businesses. It was hardly the first industrial conglomerate to spin off major divisions; Tyco International PLC, ITT Corporation, Illinois Tool Works, Johnson Controls, and Ingersoll-Rand PLC had made similar moves in recent memory. However, its peers had often experienced declining profitability or pressure from activist investors. Danaher, by contrast, had performed strongly in the years leading up to the spinoff. It had spent the previous decade strengthening its portfolio in sectors such as life sciences and dental products with acquisitions including Beckman Coulter in 2011, Nobel Biocare Holding AG in 2014, and Pall Corporation in 2015.
Swot Analysis of "Danaher Corporation, 2007-2017" written by John R. Wells, Gabriel Ellsworth includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Danaher Corporation facing as an external strategic factors. Some of the topics covered in Danaher Corporation, 2007-2017 case study are - Strategic Management Strategies, Business models, Business processes, Competition, Costs, Design, Financial analysis, Financial markets, Globalization, Growth strategy, Health, Joint ventures, Marketing, Mergers & acquisitions, Networking, Organizational culture, Performance measurement, Reorganization, Risk management, Succession planning, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Danaher Corporation, 2007-2017 casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Danaher Corporation, 2007-2017
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Danaher Corporation, 2007-2017 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Danaher Corporation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Danaher Corporation operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Danaher Corporation, 2007-2017 can be done for the following purposes –
1. Strategic planning using facts provided in Danaher Corporation, 2007-2017 case study
2. Improving business portfolio management of Danaher Corporation
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Danaher Corporation
Strengths Danaher Corporation, 2007-2017 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Danaher Corporation in Danaher Corporation, 2007-2017 Harvard Business Review case study are -
Diverse revenue streams
– Danaher Corporation is present in almost all the verticals within the industry. This has provided firm in Danaher Corporation, 2007-2017 case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Innovation driven organization
– Danaher Corporation is one of the most innovative firm in sector. Manager in Danaher Corporation, 2007-2017 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Danaher Corporation is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Danaher Corporation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Danaher Corporation has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Danaher Corporation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Danaher Corporation, 2007-2017 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Danaher Corporation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Danaher Corporation has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Danaher Corporation is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Danaher Corporation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Danaher Corporation, 2007-2017 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Danaher Corporation are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– Danaher Corporation, 2007-2017 firm has clearly differentiated products in the market place. This has enabled Danaher Corporation to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Danaher Corporation to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Danaher Corporation is one of the leading recruiters in the industry. Managers in the Danaher Corporation, 2007-2017 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Danaher Corporation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Danaher Corporation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Danaher Corporation has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Danaher Corporation, 2007-2017 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Danaher Corporation, 2007-2017 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Danaher Corporation, 2007-2017 are -
Interest costs
– Compare to the competition, Danaher Corporation has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Danaher Corporation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Danaher Corporation, 2007-2017 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Danaher Corporation, 2007-2017 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Danaher Corporation, 2007-2017 can leverage the sales team experience to cultivate customer relationships as Danaher Corporation is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Danaher Corporation supply chain. Even after few cautionary changes mentioned in the HBR case study - Danaher Corporation, 2007-2017, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Danaher Corporation vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Danaher Corporation has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Danaher Corporation even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Danaher Corporation has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Danaher Corporation, 2007-2017, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Danaher Corporation, 2007-2017 HBR case study mentions - Danaher Corporation takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Danaher Corporation products
– To increase the profitability and margins on the products, Danaher Corporation needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Danaher Corporation is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Danaher Corporation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Danaher Corporation to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Danaher Corporation, 2007-2017, in the dynamic environment Danaher Corporation has struggled to respond to the nimble upstart competition. Danaher Corporation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Danaher Corporation, 2007-2017 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Danaher Corporation, 2007-2017 are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Danaher Corporation to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Danaher Corporation to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Danaher Corporation has opened avenues for new revenue streams for the organization in the industry. This can help Danaher Corporation to build a more holistic ecosystem as suggested in the Danaher Corporation, 2007-2017 case study. Danaher Corporation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Danaher Corporation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Danaher Corporation, 2007-2017 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Danaher Corporation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Danaher Corporation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Danaher Corporation to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Danaher Corporation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Danaher Corporation to increase its market reach. Danaher Corporation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Danaher Corporation in the consumer business. Now Danaher Corporation can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Danaher Corporation can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Loyalty marketing
– Danaher Corporation has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Danaher Corporation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Danaher Corporation can use these opportunities to build new business models that can help the communities that Danaher Corporation operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Danaher Corporation, 2007-2017 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Danaher Corporation, 2007-2017 are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Danaher Corporation, 2007-2017, Danaher Corporation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology acceleration in Forth Industrial Revolution
– Danaher Corporation has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Danaher Corporation needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Danaher Corporation needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Environmental challenges
– Danaher Corporation needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Danaher Corporation can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Danaher Corporation business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Danaher Corporation can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Danaher Corporation.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Danaher Corporation can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Danaher Corporation, 2007-2017 .
High dependence on third party suppliers
– Danaher Corporation high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Danaher Corporation in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Danaher Corporation will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Danaher Corporation is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Danaher Corporation
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Danaher Corporation.
Weighted SWOT Analysis of Danaher Corporation, 2007-2017 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Danaher Corporation, 2007-2017 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Danaher Corporation, 2007-2017 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Danaher Corporation, 2007-2017 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Danaher Corporation, 2007-2017 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Danaher Corporation needs to make to build a sustainable competitive advantage.