Businessmodel of Danaher

Customer Segments

Danaher has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms across industries and sizes.

Value Proposition

Danaher offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by providing a wide variety of options. It has bought hundreds of firms since its founding, acquiring Nobel Biocare and Pall (the largest acquisition in its history) in 2015 alone. These actions have enabled it to diversify its portfolio and enhance its capabilities. For example, its purchase of Pacific Scientific Company enabled it to enter the automation control industry and its purchase of Videojet enabled it to enter the product identification market.

The company embraces innovation as part of its culture. It utilizes the Danaher Business System (DBS), a set of leadership processes and tools based on kaizen and created to enhance business performance in the areas of quality, cost, growth, delivery, and innovation. It uses this framework as part of several strategic initiatives involving idea generation, product development, material/service sourcing, manufacturing improvement, sales/marketing, and commercialization.

The company has established a strong brand due to its success. It is a family of over 20 different operating firms based around the world, from Copenhagen to California. Further, its brands maintain leadership positions in many industries, including industrial, environmental, and health care.

Channels

Danaher’s main channels are its direct sales team and its network of distributors. The company promotes its offering through its website, social media pages, and participation in conferences.

Customer Relationships

Danaher’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Danaher’s business model entails designing, developing, and manufacturing its products for its customers as well as designing and delivering its services.

Key Partners

Danaher’s key partners are the suppliers that provide it with the raw materials it needs to manufacture its products. Specific materials it utilizes include copper, steel, cast iron, aluminum, electronic components, plastics, and other petroleum-based products. Suppliers can access the Supplier Portal on its website, where they can register their businesses and share information.

Key Resources

Danaher’s main resources are its human resources, who include the engineers that design, develop, and manufacture its products, the salespeople who promote them, and the customer service employees who provide support.

It maintains important physical resources in the form of its 336 manufacturing and distribution facilities in 50 countries across North America, Europe, Asia, South America, and Australia. The numbers of facilities by segment are: Test & Measurement (38), Environmental (46), Life Sciences & Diagnostics (143), Dental (48), and Industrial Technologies (61).

Cost Structure

Danaher has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing, research/development, and administration, all fixed costs.

Revenue Streams

Danaher has one revenue stream: revenues it generates from the sale of its products and services to customers.