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%, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
wage bills are increasing, geopolitical disruptions, 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 -
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.
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.
Operational resilience
– The operational resilience strategy in the Danaher Corporation, 2007-2017 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
Strong track record of project management
– Danaher Corporation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Analytics focus
– Danaher Corporation is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by John R. Wells, Gabriel Ellsworth can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Danaher Corporation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 brand equity
– Danaher Corporation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Danaher Corporation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, John R. Wells, Gabriel Ellsworth suggests that, Danaher Corporation is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
High cash cycle compare to competitors
Danaher Corporation has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
Need for greater diversity
– Danaher Corporation has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Danaher Corporation, 2007-2017 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Danaher Corporation 's lucrative customers.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Danaher Corporation can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
Manufacturing automation
– Danaher Corporation can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Danaher Corporation to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Danaher Corporation can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Danaher Corporation can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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.
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 -
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Danaher Corporation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Danaher Corporation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Danaher Corporation demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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 .
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.
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 .
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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.