Although the company announced the split in September, the Board and senior management team at Agilent Technologies impress me for giving their shareholders and employees such a great Christmas gift. As announced, this great company will split into two separate units; one focused on life sciences and the other on test and measurement. I like that they are doing this at a time when the company is in great shape. This is forward thinking action taken in the best interest of all stakeholders. Well done Bill!
The markets have reacted favorably to the announcement, as they should. The new companies will be nimbler than the larger entity and will have focused management teams and Boards to drive their success. Such a move should not be unexpected as Agilent itself was formed with a split from HP but, in my mind, it is still a surprising and progressive action. Agilent has created two gems positioned for growth which benefits customers, employees, suppliers, financiers, management, shareholders and the community.
Most companies wait until they are in trouble before they act and, in most cases, it is too late. Many companies sell off assets, businesses or divisions in an effort to generate cash to save the core, often to no avail. Cash is consumed without recovery. This is not the case with Agilent.
With this as my last EPS blog of 2013, I am using Agilent to illustrate positive action on competitiveness. Agilent holds about 10 percent market share in life sciences and about 20 percent in test and measurement. Both segments forecast growth and intense competition from existing and new entrants. Agilent is keeping itself fit and focused. No one knows what’s coming, but imagine a large, out of shape player trying to compete against an onslaught of capable, low cost OEM competitors from China, India, South America and maybe even Europe.
We tend to think of these regions as suppliers of labor, which they are, but they are also increasingly incubating companies as suppliers of high quality OEM products. Even if 90 percent of their companies fail, the 10 percent that succeed represent a major source of competition to our North American companies.
This brings me back to my two mantras:
- You must be the low cost producer in the market space in which you operate, and
- You must be fast to market; agile as in Agilent
Much like Agilent has given its stakeholders a Christmas present; I am offering a holiday gift. Between now and January 31, 2014 Lytica is offering our holiday Silver Bells promotion. Anyone using Lytica’s free benchmarking service will also get component level details which will enable you to target negotiations for $10,000 in savings for 2014. Silver Bells brings immediate focus to cost and savings opportunity and it’s free with no strings attached; details can be found here.
Alternatively, if you would like to use the Component Cost Estimator, we are increasing our usual 25 free component matches to 50 until January 31, 2014; the first 50 components analyzed will be free.
Don’t let your company become increasingly uncompetitive, take action now and remain a leader.
By Ken Bradley – Lytica Inc. Founder/Chairman/CTO