Stryker Business Case free essay sample

Summary of Stryker Corp: Stryker Corporation is a medical technology firm, which develops and manufactures: medical implants, surgical and imaging technologies, as well as patient handling and emergency medical equipment produced for the healthcare industry. Stryker competes in the Medical instruments industry. The medical instrument industry provides consumers and society with many varying products and services that use technology to meet their health needs. More specifically Stryker instruments are used in reconstructive surgeries including hips, knees, and spinal injuries that need to be rebuilt or enhanced.Stryker is not only limited to reconstructive surgeries, but also create the equipment necessary to perform surgeries including operation rooms and general health-care equipment [1]. Stryker and other medical instruments producing companies provide doctors and surgeons with the necessary equipment for surgeries and patient care. Medical Technologies Industry: The size of the worldwide market for Medical Technology for the year 2011 was stated to be approximately $228. 7 Billion [1]. Of that total market Stryker competes in the following segments: reconstructive, Medical Surgery, and Neurotechnology and Spine.These three segments that Stryker competes in combined is equal to $67. 6 Billion of the overall $228. 7 Billion medical technology industry [1]. There are many different players in the medical instrument, but Stryker is a market leader in the medical instruments industry. In the year 2011 Stryker was the tenth largest medical technology company Worldwide based on sales revenues earned. The top four players of the Medical Technology industry include: Johnson Johnson, G. E. , Siemens, and Medtronic with respective sales in 2011 ranging from $25. 8 Billion at the top to the lowest at $15. 9 Billion. Stryker’s products and services competitive advantage use two different strategies. Stryker has segmented the Medical Technology market into three different segments to focus, and has captured a sizable portion of each of these segments. This source of competitive advantage is known as a focus strategy in which an organization such as Stryker provides products and services for a specific segment of the market. For example Stryker manufactures the tools and supplies for a reconstructive hip replacement surgery, this is an extremely specific product that an individual will only need to replace an old fractured hip.This product is only intended for an individual in need of surgery, and targets a very specific consumer rather than a mass audience. Reconstructive surgery is focused to a specific medical technology segment, and is common and expensive in older age groups of the population. Another source of competitive advantage for Stryker is that their products and services are di fferentiable, and have high brand equity with consumers, which includes surgeons, hospitals, and patients. Stryker is known for their quality products and services, which can be described as a differentiated strategy, which in the case of Stryker is known for their quality products and services. Company Leadership: Steve MacMillan resigned as Chairman, President and CEO of Stryker in February 2012. MacMillan accomplishments during his nine years as CEO were considered commendable. Past CEO Steve MacMillan strove to position Stryker for growth in a global marketplace, which is an ever-changing environment.His efforts involved focusing on improving Stryker’s core competencies, increase their global reach, enhancing operational efficiency, widening product and service offerings, and placing Stryker as an important resource to all people that will benefit from Stryker’s products. After MacMillan resignation, the board has chosen Curt Hartman, he has been on the Stryker team for twenty-two years. Hartman a person of talent, knowledge, and track record of success will serve as the interim CEO. Hartman has been a significant part of the Stryker team before being named the CEO by the board.Curt has been involved in building businesses, devising strategies, discovering and integrating acquisitions with notable outcomes. Hartman co-currently serves as Stryker’s CFO [2]. The board of directors is convinced that Curt is able to direct the company with liveliness, enthusiasm and continue to provide impressive results until a permanent CEO is selected. The board of directors of Stryker is currently in the process of appointing a permanent CEO, and is confident in Hartman as the Interim CEO, but is looking internally and externally for the most qualified individual for this position [2].Porter’s Five Forces: The Porter Five Forces Model is a tool used to highlight and analyze the competitive forces on an industry. The model charts the risk of entry into the industry by potential competitors, the bargaining power of buyers, the strength of the competitors, the bargain ing power of suppliers and the switching costs of substitute products within the industry. Below are the porter five forces model followed by an explanation of each threat. Potential competitors have not yet entered the industry but have the ability to enter the industry if they choose to.A low risk of entry by competitors does not represent a substantial threat to established companies profitability; while a high risk poses a substantial threat to an established company. A higher risk pressures established companies to maintain lower prices and expect lower returns than possible in a low risk environment. Although the rewards of entering the medical industry can be significant, there are numerous obstacles and barriers to entry. One such barrier is obtaining the approval of the FDA (Food and Drug Administration).Stryker Medical Group has the advantage of already being in the industry allowing it to avoid this major barrier. Because of the difficulty of obtaining FDA approval, Stryker enjoys a low risk of new competition entering the market. In addition to needing FDA approval, a potential new entrant would also need to overcome the strong local and international brand loyalty and close supply/distribution relationships that Stryker has maintained since its inception [3]. Buyer bargaining power is the ability of customers to increase or decrease a products price and quality based on consumer demand.Stryker has enjoyed a relatively low amount of buyer bargaining power due to its substantial brand loyalty. This is in part due to Stryker providing quality services such as: product training classes, in house sales teams, 24/7 customer support and overall reliable products [3]. Stryker faces many well-established competitors including Johnson and Johnson, Biomet and Medtronic. This competitive rivalry between firms is a struggle to gain market share from one another. There are many ways in which firms are able to compete including: pricing, service/ product support, and marketing or innovative product design [3].Technology has allowed these companies to create high quality products at extremely low costs in other countries such as China or Mexico. Increased technology also increases the amount of information available to firms, driving the need to continuously innovate products and reduce prices to remain competitive. Stryker currently occupies 37% of the Reconstructive Med Tech market, 48% of the Med Surge Med Tech Market and 16% of the Neuro-Technology and Spine segment of the Med Tech Market; with growth rates exceeding 5% per year.The stable growth Stryker has been generating has helped it maintain a leading role in face of intense competition [8]. The bargaining power of suppliers is the ability of a supplier to increase the price of required materials. Stryker’s suppliers have a low to medium level of power. The medical industry requires a minimum standard of quality and reliability, any supplier offering both for a low price will gain the opportunity to contract with Stryker. Stryker has a high demand for expensive, quality materials such as aluminum, cobalt and steel.