• What are Danaher’s five platform businesses? What criteria are used to select industries? Why?

The platform businesses of Danaher: are Dental and Life Sciences, Diagnostics Platform,
Environmental, Test & Measurement and Industrial Technologies.
To enter all these business following metrics were looked at:
1. Market size in excess of 1 billion dollars
2. Growth of about 5-7% accounting for both cyclicality and volatility
3. Industries which are fragmented and earn long tail revenues with $25–$100 million in sales, product
fits which can used without the need for overheads are preferred.
4. Outstanding competitors who master the lean process in their industries are avoided.
5. Good fit to apply DBS is considered to leverage the companies’ skill sets.
6. Tangible product-centric businesses
These metrics ensure the ease in transferability of DBS

• Why does Danaher use acquisition as a mode of corporate development instead of organic growth
Acquisition as a means for growth has been responsible for about 18% the companies’ growth in the
past when compared to 5% contribution of organic growth. Organic growth inherently is susceptible
to the changes in the world economic conditions. The acquisition of companies in industries with
different business cycles can ensure that the company is immune from the cyclicality of individual
industries.
Danaher derives its acquisition growth through leveraging its lean process capabilities which it has
developed over a period of 20 years. Danaher’s personnel has been trained to leverage these capabilities
across industries thus this type of a business model easily sustainable. The look out for innovative low-
cost manufacturers or innovative products. They also prefer companies which acquire the top positions
in their niche markets.

• What is DBS and how does it create value for Danaher?

Danaher has registered 30% annual growth reaching 296 million to 13.2 billion. 25% shareholder return
of the company is considerably better than GE’s 16% and Hathaway’s 21%. DBS tools gives all of their
operating executives the means with which to strive for world-class quality, delivery, and cost
benchmarks and deliver superior customer satisfaction and profitable growth. DBS entails the usage of
Kaizen which stands for continuous improvement. Regular visits to factory floor and conversations
with the customers were performed.
Major Sources of advantage were
- Focus on Growth, Lean and Leadership
- And 4Ps - people, plan, process and performance

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 - The accumulated experience of operating with DBS that enables leaders to understand the
interrelationships between the hard and soft elements of our system. It took them 20 years to build
this which can not be replicated

• How far can the DBS travel? Is there a limit to the range of businesses in which Danaher can create
value?
Danaher Business System was made after the careful analysis of Toyotas approach towards lean
manufacturing. Thus inherently it’s benefits can be easily transferred to smilier industries. Overall
transferability can be judged on the individual parameters of the 4 Ps people, plan, process and
performance.

1. People - Extendable as long as the corporation pays close attention to the selection and
recruitment of employees, because that helps to preserve the importance and usability of DBS that
has to be instilled. But when we think about organisational culture then it can be easily extended as
the competitive advantage of the DBS in not linked to the unique organisational culture
2. Plan - Planning of every company might be individual on the basis of if they are looking to
creative long-term value or short-term terns, but on an overall basis it is transferable across
industries.
3. Process - The process part is the least transferable because it raises from the nature of individual
trainings to people which has been provided to optimise the process thus it is well-suited for the
manufacturing process but can not be used for financial services which require a diverse set of
process capabilities.
4. Performance - in DBS performance is judged on the basis of Policy development is is relatively
easy to extend.

• Can firms themselves and/or private equity replicate the success of Danaher? What is your
assessment about what prevents any company from putting in place a similar set of processes to
drive operational performance?
Danaher acquires companies to hold them indefinitely to add to its companies’ life-time but in contrast
to this P/E acquires companies for a period roughly 5 years. P/E firms try to identify prospective
companies that are being mis-managed or are suffering from financial mismanagement they take them
over fix their management and help them realise their true value and sells it of. Thus different metrics
are looked at. Danaher pays attention to operating margin whereas P/E’s look at financial returns. Thus
a different kind of a skill-set is required fundamentally for P/E’s. When it comes to other companies
bringing about changes within their organisation. Changes this drastic are hard to bring about we saw
that top management was entirely replaces by Danaher on acquiring some companies which is highly
unlikely to happen with campaniles to drive performance

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