Medtronic SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Opportunities in growing diabetes market: Diabetes group is expected to have an increasing demand in the future, which is likely to benefit Medtronic’s future revenue. The market of diabetes device and equipment is projected to be 27.4 billion by BY2020, according to GlobalData research. Therefore, the diabetes group revenue can be a major driver in the future although the diabetes group is a relative small segment in FY2016. As per Business wire there is a huge opportunity to expand its Diabetes Group, as the diabetes care market is expected to grow at a CAGR of 5.3% from 2017 to 2022.The company has come up with a new technology to disrupt the market i.e., new 670G. This technology is the first which combines an insulin pump and a CGM in one device. Unlike other competitors where the pumps are normally an open loop system the CGM is a closed loop hybrid system which gives Medtronic a competitive advantage in this growing market. However companies like Abott, Insulet and other similar companies are ready to enter the market and give a tough competition in this market which is providing a great potential to these companies.

2. Scope to enter new markets: Medtronic is following an expansion strategy by creating new stores in different countries and by entering new markets through strategic acquisitions. FY 2016 saw some major acquisitions and partnerships like the acquisition of Twelve, Inc. which is a privately held medical device company. This acquisition was intended in improvement in development of a trans-catheter mitral valve replacement device. Similarly, in 2015 the company had acquired Medina Medical care which is focused on commercializing treatments for vascular abnormalities of the brain, including cerebral aneurysms. Recently, in 2018 the company also ventured into eye care market by acquiring a company Vision care which is involved in imaging and visualization tech for minimally invasive surgery, for $75 million. FY 2020 saw some major acquisitions and partnerships that helped Medtronic tap new potential markets. As mentioned earlier in the report, diabetes segment has huge growth potential, hence to expand its diabetes portfolio in 2020 Medtronic acquired Companion Medical, that develops technology for patients suffering from Type 1 or Type 2 insulin-dependent diabetes. This amalgamation's product portfolio includes the InPen FDA-cleared smart insulin pen system that is paired with an integrated diabetes management app on the market. It basically calculates insulin doses, track active insulin, and forward reports to caregivers and is accessible only with a prescription in the U.S. Also, its earlier acquisition of Vision Care, involved in imaging and visualization tech for minimally invasive surgery, for $75 million. In 2018, the company set to explore the eye care market

3. Connected healthcare evolution: With rising growth of health care industry and changing consumer purchasing needs and behavior different retailers are opting for highly technological offerings. Medtronic have been involved extensively in new product development and innovation is one of their primary strategic priorities in their growth strategy. Medtronic has been actively involved in promoting smart health care system and be a part of connected health care evolution. The Global Connected Healthcare Market is expected to reach USD 105.33 billion by the end of the forecasted period and is expected to grow at a CAGR of 30.2% as per an report published by MarketResearchFuture. Companies are coming with systems which can help patients monitor the insulin level, glucose levels as well as services to monitor patients following acute care admissions and surgical procedures. As per the report by Deloitte Telecommunications and Telemedia report the use of smart phones will be increasing among baby boomers so in the coming future there will be an extensive use of apps-based services when it comes to healthcare. With time the healthcare shifts from an outcome-based patient centric model. So, use of advanced technology in health care will prove to be a game changer for companies like Medtronic.

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Threat

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Political

Economical

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Social

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Technological

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Legal

1. Changes in tax regulations: Medtronic is subject to income taxes, as well as non-income-based taxes, in the U.S., Ireland, and various other jurisdictions where the operations are prevalent. Any changes in the tax laws in the U.S., Ireland and other countries in which we and our affiliates do business could materially adversely affect our business and our effective tax rate. For example, on December 22, 2017"), there was a significant charge to tax expense after the U.S. enacted comprehensive tax legislation, the Tax Cuts and Jobs Act (the "Tax Act) during the quarter ending January 2018 associated with the U.S. taxation of accumulated foreign earnings as well as the requirement to revalue U.S. deferred tax assets and liabilities resulting from the reduction in the U.S. corporate tax rate.

2. Legal litigations related to patent and safety: Health care insurance providers are subjected to legal risks related to consumer rights, privacy and information rights. For instance, Medtronic had to pay more than $1 billion to rival Edwards Lifesciences Corp to settle patent litigation in 2014 to keep its CoreValve artificial heart valve on the U.S. market. As a result, the company had to face losses and additional costs. In May 2018, the promulgation of the European Union’s General Data Protection Regulation, was expected to overhaul data protection laws in the European Union. As per the new regulation more stringent European Union data protection requirements will be imposed on the organization as well as on the customers. In addition to this as a result of any patent litigation, it is possible that the results could require the organization to pay significant monetary damages and/or royalty payments thus it may negatively impact the ability to sell current or future products or prohibit from enforcing the patent and proprietary rights against the competitors which may affect the results of operations, financial condition, and cash flows.

Environmental

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