COMPANY PROFILE -Medtronic
Business Sector :Medical Device Manufacturing
Operating Geography :Ireland, Europe, Global
About Medtronic :Previously known as Medtronic Inc. it is one of the largest medical devices manufacturing company, headquartered in Dublin, Ireland. The company is involved in development, manufacturing and marketing of a wide range of medical devices, therapies and services used in the treatment heart disease, spinal conditions, neurological disorders, vascular disease and diabetes and similar chronic diseases. The company products include aortic and peripheral vascular products, cardiac rhythm and heart failure products, coronary and structural heart products, advanced surgical technologies and general surgical products, medical supplies, respiratory and monitoring solutions, and venous solutions, diabetes services and solutions, intensive insulin management solutions, non-invasive diabetes therapies, Neuromodulation and neurovascular devices, orthopedic and spine products and surgical technologies. As of early 2018, Medtronic has over 88,000 employees with the company operations in more than 480 locations. Medtronic USP or unique selling proposition lies in being amongst the world's largest medical equipment manufacturing companies with almost seven decades of operations to deliver innovative medical technology solutions. Medtronic is also the world leader in spinal and musculoskeletal therapies. The mission statement for Medtronic reads “Contributing to human welfare by application of biomedical engineering to alleviate pain, restore health and extend life and direct our growth in areas of biomedical engineering. To strive without reserve for the greatest possible reliability and quality in our products and make a fair profit recognizing the personal worth of employees and maintain good citizenship as a company.”
Medtronic Revenue :
US $29.95 billion - FY ending last Friday of April – April 27, 2018 (yoy growth, approximately 0%)
US $29.71 billion - FY ending last Friday of April – April 28, 2017 (yoy growth, approximately 3.1%)
Ownership / Major shareholders :For Medtronic PLC, ownership distribution is as follows: Mutual fund holders - 49.57%, Other institutional - 34.55%, Individual stakeholders -0.15% The TOP 5 Owners of Medtronic PLC, as of July 2018, are as follows: The Vanguard Group, Inc. 7.74% Wellington Management Co. LLP 5.69% Blackrock Fund Advisors 4.61% Massachusetts Financial Services 4.42% SSgA Funds Management, Inc. 3.96%
Competitive Analysis of Medtronic
|1. Strong Financial Performance and Growth Strategy|
2. Strong global presence
3. Strong product portfolio
4. Strong innovation and creativity platform
5. Skilled workforce
|1. Dependence on US markets
2. Low operating margin.
|1.Evolving connected healthcare|
2. Acquisition based advantage
3. Opportunities in Growing diabetes market
|1. Strict Regulations
2. Impact of changing trade regulations
3. Exposed to patent litigations
4. Exposed to Investigation from Government
5. High competition
USD 12.53 Great quality, Affordable pricing.
Detailed SWOT Analysis of Medtronic
1. Strong Financial Performance and Strategy: Medtronic has been a consistent performer in terms of revenue with operating income. The company reported a fiscal year 2017 revenue of $29.710 billion increased 3 percent, or approximately 5 percent on a constant currency, constant week basis. It showed an increase of 5 percent on both a reported and constant currency basis in the fourth quarter worldwide with revenue of $7.916 billion, compared to the $7.567 billion reported in the fourth quarter of fiscal year 2016.The net income and diluted earnings per share (EPS) were $1.163 billion and $0.84, respectively. The figures showed a growth of an increase of 2 percent and 5 percent, respectively. The Cardio Vascular segment showed a worldwide fourth quarter revenue of $2.848 billion increased 4 percent, or 5 percent on a constant currency basis. The Minimally Invasive Therapies Group (MITG) showed a worldwide good performance with a fourth quarter revenue of $2.605 billion which was an upsurge by 6 percent on both a reported and constant currency basis. The Restorative Therapies Group (RTG) which includes the Spine, Brain Therapies, Specialty Therapies, and Pain Therapies divisions. Reported worldwide fourth quarter revenue of $1.951 billion which was an increase by 4 percent, or 5 percent on a constant currency basis. The Diabetes Group reported worldwide fourth quarter revenue of $512 million which was an increase of 3 percent, or 4 percent on a constant currency basis. The Three primary strategies followed by the company are Therapy Innovation, Strategic partnerships, Globalization and Economic value addition.
2. Strong global presence: Medtronic has developed its global presence over the years. Medtronic has been expanding its global footprint by using a strategy of strategic acquisitions and franchising and is now present in more than 150 countries worldwide. The company is focused to target firms that are aligned to the core growth strategies and which will produce strong financial returns for the company. The company is focused on acquisitions that will deliver mid-teens risk-adjusted returns, result in profitable deals to shareholders, and demonstrate clear economic value to the business. In FY2016, Medtronic made a significant investment in a private equity fund (Abraaj Group’s Growth Markets Health Fund (GMHF)) which is primarily present in Asia and Africa focused on improving healthcare access by reducing the gap between supply and demand for health services. Along with the investment in GMHF the company has also invested in CARE hospital network which helped in expanding its presence across 9 cities in India. The company completed the plans for a FY2017 pilot of Akoma Pa in Ghana. The pilot is a new hypertension management system that addresses the country’s significant shortage of cardiologists. Similarly, the company has been expanding in Malaysia, Nigeria and Russia by partnering with hospital systems to bring the project elevate in the system The largest of the Medtronic manufacturing facilities of are located in Arizona, California, Colorado, Connecticut, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, Texas, Puerto Rico, Canada, France, Germany, Ireland, Italy, Mexico, The Netherlands, The People’s Republic of China, Singapore, and Switzerland.
3. Strong brand recognition and product portfolio: Medtronic’s overall global presence and reputation across various countries has led to its brand development over the years. With a strong legacy of 129 years and a presence in more than 450 locations the company has developed strong brand recognition in the industry. Strong focus on innovation has led the company register a huge number of patents which has further strengthened the brand value of the company. With a strong product portfolio which covers a lot of chronic diseases the company has been very active in acquiring new technical acumen by partnering with companies to cover all type of diseases. For example, the company has recently acquired in 2018 a company Vision care which is involved in imaging and visualization tech for minimally invasive surgery, for $75 million. Apart from this the company has been actively involved in product research and development so the company has been strengthening its product portfolio.
4. Innovation and creativity: Medtronic have always kept themselves at par with the market needs and developed their product and services offerings over the years across different segments. The company has laid its strategy based on value-based innovation in its therapy. The company is very focused in its Research and Development and like FY 2016 even in FY2017; they have invested $2.2 billion in research and development (R&D), representing 7.7 percent of net sales and launched 75 new clinical trials. In FY 2016 some of the game changing innovations included identifying Genetic risks for sudden cardiac death, expanding MiniMed 640G System, an integrated system with the Enhanced Enlite CGM sensor that features SmartGuard technology to progress towards an artificial pancreas system, progress towards early detection of lung cancer by the use of superDimension navigation system. Some other innovations included first app-based remote monitoring system for patients with implantable pacemakers, to view discreetly and conveniently the insulin pump and monitor continuously the glucose information on a smartphone via MiniMed Connect and lot other innovations. The company has to its name a huge number of patents and has also been named one of the world’s most innovative companies by Clarivate Analytics for straight fourth year. In FY 2017 some of the ground-breaking innovations included MicraTM Transcatheter Pacing System, MiniMed® 670G Insulin Pump, a closed loop hybrid system, StealthStationTM S8, their most advanced surgical navigation system.
5. Skilled workforce: Medtronic has been very active in investing in building capability in its workforce. The company has been developing infrastructure and investing in the skills of healthcare professionals thus they create capacity in healthcare systems through the Hub & Spoke model. The company also delivers infrastructure changes through Medtronic Integrated Health Solutions by partnering with local healthcare. In FY17, the company has invested $139.7 million in capacity building and training for medical professionals and $22.6 million in patient education. The company had invested in activities like Online and offline programs which will be developed and delivered through a network of collaborations with world-class healthcare institutions, launched a new clinical training laboratory for healthcare professionals in Africa in partnership with Stellenbosch University, South Africa, through Medtronic innovation centers, Patient access solutions and similar other activities which helps them to keep their workforce update with technology and newest processes in the industry.
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This section is available only in the 'Complete Report' on purchase.
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Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
|Visionsense Corp||Health care systems||2018||Acquisition||Visionsense Corp. develops 3D-HD visualization systems for minimally invasive surgeries. This can give a boost to Medtronic's invasive neurosurgery, plastic and reconstructive surgery, tumour margins visualization research, and general surgery solutions.|
|Cardinal Health||Health care services||2017||Acquisition||It had sold its Patient Care, Deep Vein Thrombosis and Nutritional insufficiency business to Cardinal Health.|
USD 12.53 Great quality, Affordable pricing.
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References used in Medtronic Analysis Report
1. Top global Innovators - https://www.medtronic.com/us-en/about/news/top-global-innovators-2017.html
2. Medtronics - https://pdfs.semanticscholar.org/presentation/5822/44b4ad7c0cce106918a49ee876046507145d.pdf
3. Sustainibility Report - http://www.medtronic.com/content/dam/medtronic-com/us-en/corporate/documents/17267.MED.Sustainability.Report_4_FINAL%20NOV%208.pdf
4. Medtronic, Abbot devices stir competition in diabetes monitoring market - https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/44244640
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Medtronics SWOT and PESTLE analysis has been conducted by and reviewed by Senior Analysts from Barakaat Consulting.