Introduction
Danaher Corporation is a successful business that has earned its name and popularity through multiple acquisitions. This strategy was so effective that the organization overcame the 2008-2009 financial crisis without significant losses and negative consequences (Anand et al., page 1). That is why it is reasonable to determine the most crucial element behind Danaher’s success and predict how far the Danaher Business System (DBS) can travel.
Key Aspects of Danaher’s Diversification Strategy
Ranking the Elements of Success
It is impossible to state that the success of Danaher depends on a single aspect because a combination of multiple processes and phenomena can only lead to such positive outcomes. The selection of businesses to acquire is the most significant aspect of Danaher’s diversification strategy. The central idea stipulates that “the market comes first, the company second” (Anand et al., page 4). This quotation denotes that the corporation analyzed various regional and business markets to determine an area to enter through acquisition. A benefit of this top-down analysis is that Danaher perfectly understood the market’s potential before making a diversification decision. Furthermore, a peculiar HR system is the second most crucial issue that promotes Danaher’s success. While individual companies had the freedom to hire and manage their employees according to their preferences, there existed “a talent funnel from which to fill senior positions” (Anand et al., page. 7). This approach guarantees that Danaher can promote its growth and development since it controls who is responsible for decision-making.
Difficulties in Imitating Danaher’s Strategy
The business selection strategy is the most difficult to imitate. This approach requires much expertise to know what issues to consider when choosing the appropriate market and acquisition target. In any case, Exhibit 1 (Anand et al., page 26) below indicates that the system described above was successful because the corporation managed to generate constantly growing net income. The average value calculation demonstrates that the business generated significant value to sponsor its future growth.
The Scope of Danaher Business System (DBS)
It is only possible to limit how far the DBS can travel. This statement denotes that Danaher can rely on its strategy to create value in multiple businesses from various areas. Table 1 (Anand et al., page 21) demonstrates that the selected organization has decent financial performance in many fields, including professional instrumentation, medical technologies, and other spheres. This finding indicates that Danaher has sufficient experience and rich knowledge to succeed in these areas. That is why it is possible to suggest that the corporation can create value with many businesses specializing in technologies, instrumentation, and tools.
Table 1. Danaher’s Performance for Different Areas (2009).
Recommendations
At this point, we can make recommendations for Danaher if possible. Firstly, even though the organization was witnessing constant growth, it needs additional steps to keep growing. A slowing US economy and cyclicality threaten Danaher significantly (Anand et al., page 14). That is why a suitable recommendation would be to look for and acquire new start-ups and innovative firms from various markets. Secondly, a significant challenge is whether the organization promotes continuous improvement through its DBS (Anand et al., page 15). Thus, Danaher should find suitable innovative solutions to make its HR system and selection approaches more efficient and faster.
Conclusion
Danaher Corporation is a thriving organization famous for its adequate diversification and acquisition activities. The business relies on sophisticated selection and HR strategies to choose acquirement targets and promote efficient management. Furthermore, since Danaher has already demonstrated successful results in multiple areas, it is possible to forecast that its DBS can help succeed in a limitless range of businesses specializing in technologies and instrumentation.
Reference
Anand, B., Collis, D. J., & Hood, S. (2015). Danaher corporation. Web.