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Danaher Corporation

Solution Id Length Case Author Case Publisher
2842 1478 Words (7 Pages) Bharat N. Anand, David J. Collis, Sophie Hood Harvard Business School : 708445
This solution includes: A Word File A Word File

The case depicts an analysis of Danaher Corporation, started in 1980, which due to its strategic planning and effective implementation, became one of the most successful companies. The company has grown in size and revenue by acquiring other equity firms through investment opportunities with the help of unique strategies. Additionally, the company’s success can be associated with its unique culture and management system, the Danaher Business System (DBS). Danaher has adopted the Kaizen strategy of Toyota for continuous improvement and operations, allowing them to acquire companies following the niche segments. Danaher functions in business; Dental, Life Sciences, Diagnostics, and Environmental &Applied Solutions. The company’s strong leadership and talent development have helped them to successfully expand and enter into new markets. However, with such success trend, it faces numerous challenges in terms of economic uncertainty, increased competition, DBS sustainability, and investment opportunities. Therefore, the management at Danaher needs to address these challenges for sustainable growth.

Following questions are answered in this case study solution:

  1. What, other than Danaher Business System, account for the success of Danaher Corporation?

  2. What are the biggest challenges facing Danaher in 2010? What can Larry Culp do to prepare the organization for these challenges?

  3. How far can the DBS travel? Is there a limit to the range of businesses in which Danaher can create value?

  4. What are the differences and similarities between Danaher's strategies and processes compared to the ones used by private equity funds? What, in your experience, prevents any company from putting in place a similar set of processes to drive operational performance?

Case Study Questions Answers

1. What, other than Danaher Business System, account for the success of Danaher Corporation?

Danaher has always capitalized on its acquisition strategy. They have a plan to acquire companies that have a strong market position and align with the organization's portfolio. It allows them to avoid complexities. Similarly, Danaher targets niche markets and growth rates based on those companies that have niche footprints. Whereas On the contrary, the other firms acquire businesses that are on the downside and not doing well. Moreover, the company embraced the lean structure and continuous improvement model in its strategy. Danaher encourages its people to continuously look for opportunities and enhance the process and services to improve overall organizational performance. The Kaizen approach with the 4p model (people, process, plan, performance) further added value to the company's profile. Furthermore, the company enjoys the benefits of strong leadership, which allows it to drive growth and make effective decisions. The leadership team focuses on internal talent development with a culture of collaboration. Danaher has adopted an interactive and collaborative culture within the organization and developed certain parameters that are directly impacting the learning element for the employees. The organization has focused on a bottom-up strategy, implying that once the problem is faced, it is evaluated and solved without pointing anything to anyone. Such developed culture has helped Danaher to maintain a competitive edge in the market. Lastly, the company has developed extensive in-house M&A facilities. This assists them to acquire companies without facing legal or financial constraints. Therefore, the business model that it has innovated over time is difficult to copy by other businesses, one of the main elements in its success. Overall, Danaher's success has resulted from its acquisition strategy, strong leadership, continuous improvement, interactive culture, and unique business model.

2. What are the biggest challenges facing Danaher in 2010? What can Larry Culp do to prepare the organization for these challenges?

Danaher’s track record of revenue has largely been influenced by acquisition. The company has a compound annual growth rate of 5% and total growth of 18% from 1992 to 2010. However, maintaining that growth rate required it to mitigate some of the challenges it faces. Firstly, the company must maintain a huge cash flow to work with its acquisition with the growing number. Since the number of firms it has acquired has been large and the company has significantly expanded, it becomes difficult to sustain growth rates.

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