Fortive SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Increased focus on core competencies by divesting alternative businesses into separate entity: In 2019, Fortive announced the idea to separate into two independent, publicly traded companies - Fortive and Vontier. Vontier will be an industrial technology company which will retain the Fortive name, having a different portfolio of growth-oriented business committed to connected workflow solutions that incorporate improved sensors, instrumentation, data and analytics. The new company will be a global industrial company focused on the rapidly growing transportation and mobility markets. Vontier will consist of Fortive’s Transportation Technologies and Franchise Distribution platforms. Like Fortive, Vontier will also be centered around the principles of Fortive Business System and be committed to the continuous improvement on which the company’s success is based. Vontier fourth quarter earnings for 2020 was $136.8 million. The separation will allow both the companies to enhance growth and profitability for all stakeholders and better leverage their market positions.

2. New technology provides an opportunity to introduce differential pricing strategy in the markets wherein they enjoy a leadership position: Fortive Corporation is an innovator in several markets they serve. In light of the scope of the items and administrations, they sell in an assortment of business sectors. Approximately 40% of new Fortive total revenue is constituted by the Intelligent Operating Solutions division which includes Fluke, Industrial Scientific, Intelex, Accruent and Gordian. This division offers solutions to increase field and facility safety, reliability and productivity, and operating intelligence to a limit of end users and addresses a total available market of more than $15 billion. Precision Technologies division represents around 35% of new Fortive total revenue which includes Tektronix, Pacific Scientific EMC and the Sensing business, as well as Qualitrol. Through this segment, customers are able to increase the development of innovation products and solutions as it offers mission-critical technologies, also the total addressable market is more than $10 billion. Moreover, approximately 25% of new Fortive Total revenue is represented by the Advanced Health Case solution which includes Advanced Sterilization Products, Fluke Health Solutions, Censis and Invetech. It has been accepted by the administration that the company has a market administrative role in the eminent part of the industry in which it serves. Hence, Fortive can utilize its assertive position in various global markets to introduce differential market schemes which will aid in increasing the revenue and increase the availability of the products to an extensive range of customers across different divisions. Considering the company’s position to offer innovative solution to their customers, it can leverage its financial position in contrast to its competitors.

Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Use of eco-friendly technologies for waste management: Increase in urbanization and growing awareness for recycling the products are the major factors for the growth of the global smart waste management market. Fortive is committed to sustainability and uses natural resources and recycles or reuses the materials where possible. Through composting and recycling, Gem Sensors decreased their total landfill disposal to 9%. In 2019, at the North Carolina site of SPT, the manufacturing process improved through the expansion of the recycling program. It uses the regrinding process to process the recovered plastic waste for reuse. Fortive’s Veeder-Root Altoona, PA site took various initiatives to reduce waste which includes composting food waste, shifting to compostable paper goods, and reusing packaging. The site reduced an overall 56% of landfill waste and since 2017 the waste disposal cost has reduced to 67%.

2. Advanced progress toward greenhouse gas reduction goals: Companies across the globe are striving to reduce greenhouse gas emissions in their operations and contribute towards a low carbon ecosystem to improve sustainability. In 2019, Fortive intensified id commitments through strong goals and actions. For the first time the company reported the emissions data to the Carbon Disclosure Project (CDP) and committed to reduce Scope 1 and Scope 2 greenhouse gas emissions by 40% on a revenue intensity bases in the next ten years. Fortive launched an energy kaizen program in 2009, to recognise and address the reduction in energy use and energy efficiency opportunities. The program was in effect till 2020 when the company decided to refresh and reinvigorate the program. The new program updating also includes the measure of greenhouse gas (GHG) emissions reductions corresponding with the opportunities accounted for the prioritization scheme for carrying out the project. A gap analysis of the Sustainability program was conducted in 2020, to locate the areas for improvement. Initially, Standard Work was implemented to position the GHG inventory management and disclosure to the Greenhouse Gas protocols. A Corporate Accounting and Reporting Standard, updated the company’s emission factors to the EPA’s 2018 emissions factors and publicly revealed the GHG inventory and performance through CDP Climate Change disclosure.