Medtronic's International Strategy

Medtronic utilizes a transnational strategy, organized by geographical divisions with different products, prices and regulations in each. However, they utilize a common organizational structure. The products are mostly the same, so the overall company divisions have their own strategy worldwide, but with so many differences in foreign markets, regional directors must make some decisions based on the local climate.

With products sold in 150 countries, Medtronic is interested in foreign markets. They are focusing on increasing revenues in emerging markets, such as Asia and South America. While there is extensive potential in these markets, the price per unit is reduced because the disposable income of the populations is reduced. This reality is important to study before employing an international strategy. 

There are many products that customers in nondomestic markets are unwilling to pay at the price the domestic company would like to sell them.

Another issue with international strategies of companies is the interference of governments. Medtronic is currently facing issues with international governments concerning their Covidien deal. The U.S. government is tightening tax regulations and repatriation taxes to discourage companies from seeking tax shelters abroad. The Irish government is making the deal difficult for Medtronic as well to discourage all the revenues from flowing back to the United States.

Medtronic’s international strategy also includes developing new core competencies. By acquiring Covidien, Medtronic will have new products, thus experience in new areas of the market. This market extension will open new opportunities for customers, distribution channels and revenues.

Medtronic Acquires Covidien for $43 Billion

Medtronic is in the middle of the largest acquisition of its history, negotiating a now $59 billion deal. Its target is Covidien, an Irish medical technology company. With nearly 40,000 employees and revenues of $10 billion, it is a large player, producing “surgical solutions, vascular therapies and patient self-care.” This deal falls in the category of a market extension, related acquisition. While some acquisitions can create a fear of monopolies; however, Medtronic does not run the risk of anti-trust laws with this deal. By acquiring Covidien, Medtronic seeks to expand its market, increase globalization, reduce costs and increase revenue. Covidien’s products are in the same industry as Medtronic, but only a small part of their businesses overlap, meaning new product lines for Medtronic in this new company. Through Covidien’s customers and distribution channels, Medtronic will gain access to new markets. Together, the new company will serve 150 countries.  Its extensive market reach will help with Medtronic’s goal of globalization. With the growth rate slowing in the domestic industry, a steady 2%, Medtronic needs to capitalize on the booming growth rates of countries in emerging markets. These new markets are seeing 12%-19% growth. Also because of the slowing growth, Medtronic needs to find a way to increase revenues or cut costs. Medtronic was hoping to benefit from a tax inversion by moving the Medtronic business address to Ireland where the tax rate is 12.5%, as compared to 35% in the United States. Unfortunately for Medtronic, both the federal governments of the United States and Ireland are altering regulations to keep corporations like Medtronic from seeking tax shelters elsewhere. Shareholders are upset as well, citing and under- or over-valuation of deal, depending on their allegiance. While the text says that mergers should be dealt with quickly and with the fewest bidders, to benefit the bidding company, Medtronic has not found their deal as simple. With governments and shareholders both upset, there is not much positive press for this deal, which is never positive for a company’s image. In addition, Medtronic will have to have an excellent integration strategy in order to best utilize the economic benefit of the new company. Seemingly, the two companies have similar enough missions, visions and sizes to integrate fairly easily; however, the results of the acquisition will remain unknown until after the closing of the deal early next year.

Medtronic and DaVita Healthcare Partners Team Up

It is amazing the parts of the body that are connected in some way. For example, through research Medtronic has done, it has discovered that patients on dialysis are more likely to develop arrhythmias. As a result, Medtronic and DaVita Kidney Care, a division of DaVita Healthcare Partners, have announced a new joint venture for the purpose of doing more research on the correlated issues with a larger patient population. Together, Medtronic and DaVita will develop a pilot program to identify cardiac arrhythmias in end-stage renal disease patients using Medtonic’s Reveal LINQ™ Insertable Cardiac Monitoring system. The research will help DaVita learn more about how to improve the lives or ESRD patients and prevent cardiac episodes. This joint venture is classified as an asymmetric alliance with the strategy of learning from competitors.

Since DaVita and Medtronic do different things and occupy different markets, there is no need to fear tacit collusion. There is also little risk of either company moving into the other’s industry as competition because their roles are so different. Their common factor is the patient itself but not the role in the healthcare industry. In addition, because it is a pilot program for the purpose of research, the project has a defined scope, and likely, a timeline. There is little risk for a learning race because the research must be completed to obtain credible results. The two companies appear to be sharing duties well, as DaVita has the patients and the medical records, while Medtronic is providing the device and the monitoring.

One strategy Medtronic may be using is managing uncertainty. This venture is based on research and Medtronic needed a wider pool of patients. Before releasing a new product on the market, or to gain credibility for an existing product, Medtronic is doing the studies to verify the product’s effectiveness. The study itself may be managing the risk of marketing the product.

While most strategic alliances have to worry about the possibility of cheating by one or both parties, joint ventures are the least likely alliances to experience cheating because both parties are financially invested and the venture is its own separate entity. 

http://www.zacks.com/stock/news/154470/will-davita-kidney-care-gain-on-medtronic-collaboration

http://www.nephrologynews.com/articles/110548-davita-medtronic-to-collaborate-to-identify-cardiac-arrhythmias-in-patients-receiving-dialysis

Corporate Diversification: Medtronic's Corporate Structure

Medtronic is a large, global company with more than 48,000 employees in 140 different countries. Particularly with the complicated nature of the health care industry, Medtronic has a complicated leadership structure. It utilizes a modified M-form with a shared corporate staff. There are currently three groups, or divisions, with Executive Vice Presidents who report directly to the CEO, Omar Ishrak. The three groups are Cardic and Vascular, Restorative Therapies and Diabetes Group; these three are soon to be joined by the Covidien Group. The structure becomes more complicated with Vice Presidents of geographical region who have dotted line relationships with counterparts in each technology division and the CEO. While most companies either organize by product type or geographic region, Medtronic has a complex structure organized by both. This is due, in part, to complicated health care regulations that differ in each country and also varying cost of products due to differing economic maturities around the globe. Therefore, Medtronic has, for example, a dedicated employee of spine technology that focuses only on China. That person reports to the head of Spine and the VP of Asia. Above all of these complicated structures, there is a group of corporate staff called Quality. These positions are in human resources, finances, administration and so on.  The organization shares these leaders as common cost centers to centralize the administrative work.

Medtronic’s board of directors is made up of diverse business leaders, with CEO Omar Ishrak as the Chairmain. While there is some controversy about whether Chairmans should be internal or external to the organization, Medtronic’s board structure works quite well.

As far as budget allocation, each group has its own budget based on their percentage of value of the company. The revenues of the groups are listed below.

www.medtronic.com

Medtronic's Diversification Strategies

Medtronic is made up of several business units, all under the larger umbrella of medical technology. The different foci of the company include Aortic and Peripheral Vascular, Cardiac Rhythm and Failure, Coronary and Structural Heart, Diabetes, Neuromodulation, Spine and Surgical Technologies. These business units are part of a related linked strategy. In each of these units, the technology is very different. Some of Medtronic’s products are machines like glucose monitoring insulin pumps or pacemakers, while others are synthetic heart valves and artificial cervical discs. All of these parts require vastly different manufacturing materials and processes; however, some of the products are likely to share some common materials, such as silicone or the inner workings of the medical machines. Therefore, some of the business units may utilize the same suppliers. 

In addition, because hospitals have become corporate conglomerates of different types of practices, Medtronic may be able to market these vastly different products to similar distribution channels. After all, the same hospital that puts in pacemakers would also fit a patient with an insulin pump. In addition, the businesses are linked through common core competencies and a common mission, which is to “contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life.”

In previous chapters, we have already established that Medtronic’s products are valuable, rare and costly-to-imitate, which is why it operates all of its business units from within the boundaries of the firm. Medtronic utilizes a hierarchical governance strategy in order to best develop economies of scope.

Medtronic and Vertical Integration

The entire industry of healthcare is moving toward vertical integration. With cuts on reimbursements for Medicare, independent physicians are facing tightening bottom lines and big corporations are looking to increase revenue streams. Hospital systems are buying up physician’s offices, so it’s no surprise that other areas of the industry are integrating too.

In 2010, Medtronic acquired Cardiocom, a firm that develops patient monitoring systems. This acquisition would be downward vertical integration, as the product is used directly by the end user. The Cardiocom system is an implanted system, constantly monitoring patients’ vital signs and uploading data to the cloud. The data is then aggregated to develop patient statistics and develop patterns about care and outcomes. This example of vertical integration falls in the category of hierarchical governance. Not only does Medtronic now control the sale of products further down the value chain, but also the data accumulated by the products. The value added for Medtronic here is not just an additional revenue stream in the same field, but a way incorporate primary research of patient data to use to improve their R&D efforts.

http://www.forbes.com/sites/theapothecary/2013/08/24/medtronic-is-changing-its-business-will-the-system-let-it/

Also in 2010, Medtronic acquired Invatec, a company that develops cardiovascular medical technologies. Invatec , itself, is a vertically integrated company in that it designs, develops, manufactures and assembles its products. Cardiovascular care is one of Medtronic’s core technologies, so having Invatec on board increases the length of the value chain. This example of vertical integration is opportunism because Medtronic saw the value of being able to control each step in the process of its cardiovascular care unit. Cardio technology is both expensive and lucrative; it will have to endure costs to govern the new addition, but the strategy is that having Invatec as partners is better than having them as rivals.

http://newsroom.medtronic.com/phoenix.zhtml?c=251324&p=irol-newsArticle&ID=1770599&highlight=

The recent Medtronic and Covidien merger is another prominent example of vertical integration lately. Covidien has rare, valuable and costly to imitate technology that Medtronic wants. The Irish based company has resources and capabilities that Medtronic would rather aquire than compete with. While it seems like this business deal is more of a merging of technologies rather than a strengthening of any one core technology, it falls in the category of vertical integration strategies that deal with resource heterogeneity. However, Covidien does produce more medical supplies and support technologies in addition to the highly technical. In addition, Covidien conveniently has the resource of being located in a tax shelter country, which is a unique and hard to imitate resource all on its own.

http://www.covidien.com/

http://www.medtronic.com/

Tacit Collusion and Accusation on Medtronic

Collusion is a tempting strategy. It is like a game of corporate keep away, where companies band together to improve their own conditions in the market, while keeping others out of their potential successes. Over the years, Medtronic has been accused of engaging in this illegal behavior for the sake of profits.

In the last few years, Medtronic has been accused of colluding with several competitors to reduce the competition in the market. In 2012, “Senate Finance Committee Chairman Max Baucus (D-Mont.) and senior member Chuck Grassley (R-Iowa)” accused Medtronic of collusion by falsifying product reviews. They suggested that Medtronic had influence over the physicians that were performing reviews of products and that the physicians were exaggerating side effects of competing products to enhance the attractiveness of Medtronic products. Evidence found that Medtronic paid $210 million in kickbacks to physicians and that several email chains confirming the relationship between Medtronic and the physicians. In 2014, “Stryker Corp. [asserted] anti-trust claims against Medtronic over its sale of some 500 patents for its Kyphon vertebroplasty technology to alleged patent troll Orthophoenix.” This example is of explicit collusion, where one company is in direct communication with another company to corner the market on a product. Also in 2014, Lenox MacLaren Surgical Corporation blamed Medtronic for collusion through recalling Lenox’s product and then charging super competitive prices for the same product, after taking Lenox out of the market. In this case, Medtronic was not held responsible for the accusation, but if it were, they would have been guilty of reducing the competition in the market in order to keep prices high.

http://www.massdevice.com/news/stryker-alleges-medtronic-colluded-with-patent-troll-kyphon-ip

http://www.ca10.uscourts.gov/opinions/11/11-1251.pdf

https://www.ca10.uscourts.gov/opinions/13/13-1307.pdf

http://www.finance.senate.gov/newsroom/chairman/release/?id=b1d112cb-230f-4c2e-ae55-13550074fe86

Medtronic and Flexibility

Chapter 8 introduces the strategy of maintaining flexibility and real options. With real options, the firm has the option to maintain flexibility in future investments by delaying part of the decision until a later date. Using the strategy of real options versus present value often makes investments more attractive due to the extra time a firm has to receive the benefits of a future venture. Medtronic is able to exercise flexibility in a few different ways. With many disparate divisions, Medtronic has opportunities to be flexible with product innovations, research and development, acquisitions and corporate facilities. One example is Medtronic’s acquisitions. The company has strategically bought several small companies that will reduce costs or improve profits, based on the acquisition. Some are hubs of research and development that would allow Medtronic to reap benefits of existing research and develop further projects in future years, one example of real options. Recently, Medtronic’s acquisition of Covidien has become an advantage for the company in many ways. For one, it is a successful firm and buying it out reduces global competition, initially strengthening its standing in the market. Another benefit of the acquisition is the reduction of costs due to using Covidien’s international headquarters’ location as a tax shelter. Inevitably, this decreases Medtronic’s uncertainty about future flows by automatically reducing tax costs. In addition, Medtronic will reap the benefits of future research and innovation from an already successful firm. 

Product Differentiation

Product Differentiation

Medtronic uses a differentiation strategy for its products and services. The company spends millions of dollars annually on research and development to create highly innovative products. About innovation and product development, Medtronic’s annual report states, “Medtronic has traditionally differentiated its products by generating evidence to demonstrate clinical value.” The company uses empirical evidence to create products that serve highly specific medical purposes. Another thing that makes Medtronic products differentiated is the product features. Medtronic’s products are designed with features that affect very specific medical outcomes. It is no surprise that product complexity is another quality that confirms Medtronic’s product differentiation strategy. One of their new products is a sophisticated synthetic heart valve. Their website explains the product like this:  “The CoreValve transcatheter aortic valve (TAVR) platform was designed specifically to meet the clinical needs of patients with severe aortic stenosis at extreme or high risk for surgical valve replacement.” It even features a self-expanding frame.

Porter’s Five Forces

Threat of Entry: Competition would take on additional costs to develop similar products that perform as well and are as reliable as Medtronic’s products.

Threat of Rivalry: Medtronic’s reputation and product satisfaction are so strong, potential rivals would have a difficult time gaining market share because of the highly specialized business that Medtronic has developed.

Threat of Substitutes: There is a high barrier for substitutes, due to the extreme expense and sophistication of products. Unlike other brands with product differentiation, it would be unwise to purchase a substitute heart valve that is less quality or less technologically advanced than Medtronic’s product.

Threat of Suppliers: As the price of raw materials for these specialized parts increases, costs of suppliers may increase. However, Medtronic has the best product in the business, so customers will alleviate the price increase because of the need for the product.

Threat of Buyers: The power of buyers is less for companies with product differentiation strategies because there are fewer (if any alternatives). For these specific medical devices, customers have no alternative besides Medtronic’s devices.  

Sources:

http://www.deloitte.com/view/en_US/us/Insights/Browse-by-Content-Type/deloitte-review/b885756363998310VgnVCM3000001c56f00aRCRD.htm

http://annualreport.medtronic.com/letter-to-the-shareholders/page3/index.htm

Cost Leadership Strategies

Cost Leadership Criteria

Because of Medtronic’s size, it is able to operate as an economy of scale. As a global operation with high sales, it has an advantage of product volume and specialized machines. With such a high volume of production, employees are able to have more specialized jobs. Therefore, the learning curve for each employee allows them to do their job more efficiently, giving Medtronic an advantage in employee productivity. Medtronic may also have an issue with diseconomies of scales due to the expanse of products and locations. There may be managerial diseconomies due to the complexity of the organization. Medtronic also experiences technological advantages due to the sophistication of the products. No other company develops quite the same products as Medtronic, meaning their machinery has to be sophisticated and specific enough to handle advanced production. In addition, Medtronic also has advantages in policy decisions. It has strategically built several arms of the company specializing in different medical issues; each has a designated portion of the projected revenue for the company. Other positive policy decisions describe company culture and employee benefits, such as volunteer opportunities and matched employee giving. Medtronic employees enjoy working there; employee retention is an advantageous strategy.

Porter’s Five Forces as Related to Cost Leadership

Threat of Entry: Other firms would find it expensive to enter the market because of the size of Medtronic and its volume of production.

Threat of Rivalry: Because Medtronic has cost advantages, their profit margins will be higher than competitors who have higher operating costs.

Threat of Substitutes: There are not many options for substitutes because of the production differentiation advantages Medtronic has. The threat of substitutes is low due to costs of production and technology required to create the medical devices.

Threat of Suppliers: The threat of suppliers is low because of the volume of production. Medtronic has such a high volume that suppliers will want to keep the relationship with such a big client.

Threat of Buyers: The threat of buyers is low. Due to the nature of the medical devices and the customers Medtronic has, buyers are not likely wielding their power by demanding lower prices or higher quality materials. 

Medtronic's VRIO Assessment

Value: Do Medtronic’s resources and capabilities enable the firm to respond to environmental threats or opportunities?

Medtronic has a variety of successful product lines based all over the world. It has exceptional resources in the financial, physical, human and organizational categories. Financially, it has continually grown its resources. In Medtronic’s most recent annual report, it shows that the stock price has increased continually since 2009. Physically, it has acquired numerous smaller firms, acquiring all of their research and product lines. In addition, Medtronic has several regional offices all over the world. Its human resources create the innovation and technology that has made them so successful. Medtronic’s website says it has an “innovative culture where passionate people are encouraged and flourish. If your job search ends at Medtronic, you'll find yourself collaborating with some of the brightest minds in the healthcare industry.” From an organization standpoint, Medtronic is doing well not only coming up with the technology but capitalizing on it. Its growing stock success can attest to that.

http://www.medtronic.com/about-us/company-profile/annual-report-company-report/

http://www.medtronic.com/careers/mission-culture/

Rarity: How many competing firms already possess particular valuable resources and capabilities?

According to MorningStar, there are 25 other firms in the same industry as Medtronic. The top several firms are serious competitors, some with interests in similar markets as Medtronic. Medtronic is not the only firm in the business, so it does not have rarity as a competitive advantage. However, even in the top competitors, there is only one who is directly in Medtronic’s range. Abbott Laboratories and Medtronic have similar numbers across the board. Is it the only firm in the business? No. Does it have more resources and capabilities than the vast majority of competitors? Absolutely.

http://financials.morningstar.com/competitors/industry-peer.action?t=MDT

Imitability: Do firms without a resource or capability face a cost disadvantage in obtaining it compared to firms that already possess it?

Firms that do not already possess Medtronic’s research and development and trade secrets of their products would have to spend lots of money to create a rival product. Last year alone, Medtronic’s research and development budget was $1.5 billion. Medtronic has bought up smaller companies and high performing firms around the world. If another firm wanted to buy their way into the market, they would have to beat Medtronic to the deal. The medical device industry, in general, requires high capital investment. New firms face a high barrier to entry and difficulty imitating Medtronic’s products.

http://www.medtronic.com/about-us/company-profile/medical-technology.htm?loc=MDTHomeRefresh_B_InPage_SubNav_Company_Line2_3

Organization: Is a firm organized to exploit the full competitive potential of its resources and capabilities?

In addition to developing great technology, Medtronic has a lot of other organizational advantages. First, Medtronic develops its leaders. The company values innovative thinking and encourages leadership development for the ultimate benefit of the company and the development of its technology. Medtronic also has its businesses organized into three main departments that have subdepartments—these groups work together, making the best use of knowledge and resources. Their locations are divided by the best places for manufacturing, research, and other departments to be. Most recently, Medtronic has attempted to avoid millions of dollars in corporate taxation by moving its headquarters to a newly acquired company in Ireland. The company is using all of its resources, expertise and capabilities to fully exploit its profitability.

http://www.medtronic.com/about-us/company-profile/medical-technology.htm

http://www.forbes.com/sites/matthewherper/2014/06/16/medtronic-succeeds-where-pfizer-failed-escaping-the-irs/

Evaluating Environmental Opportunities and Neutralizing Threats

Evaluating Opportunities:

Medtronic is the largest medical technology company, operating in 140 countries. It has seven different business divisions, all located in different places. For Medtronic to have become so successful, it has had to make strategic business decisions and adapt to the market, as well as neutralize threats in order to keep competition low. Based on the products and services Medtronic offers, the company is classified as a member of emerging industries in a global market.

Emerging Industries: Medtronic employs a technological leadership strategy in emerging industries because it is always introducing new, innovative products into the market. With a company based on ever-improving technology, Medtronic and the medical technology industry can be classified as emerging, although it has been around for more than 60 years. In addition to consistently adding new technology, Medtronic is adding markets, and successfully. Last year alone, 13% of the company’s total revenue came from emerging markets, where the demand for these technologically advanced products is growing rapidly.

Global Market Opportunities: Medtronic utilizes a global strategy. Rather than changing strategies for other countries, Medtronic can focus on the same technology and advancements because the product it sells does not change based on cultural preferences. Medical technology is the same for people all over the world. In the FY14 annual report, CEO Omar Ishrak discusses the acquisition of Covidien and the resulting growth of their global strategy. This acquisition means existing research and development and know-how and increases shareholder’s revenues.

Neutralizing Threats:

Threat of Entry: Medtronic is in a position in the industry where it has erected barriers to entry. With its large workforce and global strategy, it has exploited economies of scale by acquiring and merging with other companies to become the largest medical technology company. Its products are highly differentiated and its research and development teams are constantly releasing new technology. In addition to these barriers, it has also been able to reduce costs independent of scale by moving its business office to Ireland to take advantage of a tax shelter. This one act has saved Medtronic millions of dollars each year.

Threat of Rivalry: Medtronic also competes with firms in the industry on dimensions other than price. Its products are differentiated with advanced technology beyond that of its competitors. In addition, the company’s products and services are diversified, thriving with seven divisions that are all focused on different types of medical technology. From Cardiac Rhythm and Heart Failure Management to Diabetes Care, Medtronic has a division for multiple, unrelated yet common health problem. Regardless of a competitor’s success in one market, Medtronic still dominates the industry with types and performance of several technologies.

Sources:

Medtronic FY 14 Annual Report:

file:///C:/Users/Jennie/Downloads/Medtronic%20Final%20FY14%20Annual%20Report%20July%207%202014%20-%20SEC%20form%2010K%20(1).pdf

Medtronic Investor Page:

http://phx.corporate-ir.net/phoenix.zhtml?c=76126&p=irol-IRHome

Medtronic and Porter’s 5 Forces Model

The Threat of Entry:
Medtronic is one of the world’s leading companies that provides medical technology devices. Its products are technologically advanced and require extensive research and development. The threat of entry for a new company in this industry is high. Medtronic has the advantage of economies of scale because its strategy is acquisitions and mergers. Recently, Medtronic has acquired several smaller firms and released several new products, including an “implantable cardiac monitor, or ICM…The device is roughly one-third the size of a triple A battery -- about 80% smaller than comparable ICMs.” This product launched in February and has achieved 4% growth in the company division in its first quarter. This is one example of the advantage of product differentiation that would be a low threat of entry. Medtronic can use its brand recognition and reputation for high quality products to ensure trust with customers for new products, like this heart monitor.

Threat of Rivalry:
Medtronic’s main competitors are Abbott Laboratories, Stryker Corp, St Jude Medical Inc and market share leader, Johnson & Johnson. These companies are acquiring companies worldwide, making the market smaller. Industry growth is strong and product differentiation is high. Based on the attributes of the threat of rivalry, the threat of rivalry for Medtronic is moderate.

The Threat of Substitutes: 

 The threat of substitutes is moderate for Medtronic. The company’s devices are expensive and not ubiquitous throughout the health care industry. While hospitals all over the world use Medtronic’s technology, some are forced to make the best diagnosis with what they have. These doctors use older methods to treat patients for a less accurate and less expensive visit.

Threat of Suppliers:

The medical technology business is dominated by a few firms that sell highly differentiated products. Suppliers are not very threated by substitutes. Based on this assessment, the threat of suppliers is moderate to high.

Threat of Buyers:

In the industry of medical technology, the threat of buyers is low. With the aging Boomer population and a culture that does not value proactive, healthy living, the need for medical devices for a variety of ailments grows every day. Products and services provided by Medtronic affect and improve the quality of life for people. For anyone who can afford such care, this expense would be priceless to the patient. The number of buyers is high and the products are differentiated. Buyers are earning significant products by way of life and mobility improvement.

Sources:

http://www.fool.com/investing/general/2014/08/25/5-things-medtronics-management-wants-you-to-know.aspx

 http://www.reuters.com/article/2014/06/16/us-medtronic-inc-mergers-idUSKBN0ER1Y720140616

http://www.bostonscientific.com/en-US/about-us/core-businesses.html

Competitive Advantage and Firm Performance

Medtronic’s website claims that it is “the world’s largest medical technology company, offering an unprecedented breadth and depth of innovative therapies to fulfill our Mission of alleviating pain, restoring health, and extending life.” In 2013 alone, more than 10 million people received medical therapies. Medtronic’s products care for “cardiac and vascular diseases, diabetes, and neurological and musculoskeletal conditions.” Medtronic is in the right business, as Forbes has claimed that health technology companies are one of the fastest growing fields. With increased technology, an aging Baby Boomer’s population, and more of a concern about remaining healthy longer, Medtronic’s products are highly sought after.

Medtronic’s competitive advantage is that it is one of the few companies in the world that is so diversified in the business of health technology. Its divisions create products and treatments for a wide array of ailments. In addition to their traditional projects, Medtronic has announced new research trials for devices helping with Parkinson’s disease, patients with heart failure and a device for those with vision loss. They are in the business of improving quality of life, something everyone experiencing pain is in the market for. For most who can afford it, the economic benefit of reduced pain or health issues, the economic value far outweighs the cost. Because the firm is health technology based and competition on its scale is limited, the competitive advantage is sustained.

As far as firm performance, the data speaks Medtronic’s praise. Not only is Medtronic 173 on the 2014 Fortune 500 list, but it is doing well in the NYSE, averaging between $52.00-$64.00 a share. Recently, its value neared its 52 week high. In the midst of several acquisitions and mergers, as well as its decision to seek a tax shelter in Ireland, Medtronic has made the business news frequently, and its increase in stock price shows an increased value in light of these decisions. The tax shelter example is clear way that Medtronic has cut down on economic costs.

Sources:
http://www.medtronic.com/about-us/company-profile/medical-technology.htm?loc=MDTHomeRefresh_B_InPage_SubNav_Company_Line2_3

http://www.crazyjoys.com/top-stories-arena-pharmaceuticals-inc-nasdaqarna-medtronic-inc-nysemdt-citizens-holding-company-nasdaqcizn-heico-corporation-nysehei,201441980

http://www.wallstreetscope.com/investors-alert-medtronic-nysemdt-microsoft-corporation-nasdaqmsft-navigators-group-inc-nasdaqnavg-freescale-semiconductor-ltd-nysefsl-con-way-inc-nysecnw/2514055/

http://www.crazyjoys.com/hot-alert-medtronic-inc-nysemdt-bank-america-corporation-nysebac-simulations-nasdaqslp-solitario-exploration-royalty-nysemktxpl-aratana-therapeutics-inc-nasdaqpetx,201440447

http://www.propertymentorgroup.com/why-need-to-watch-medtronic-nysemdt-8x8-inc-nasdaqeght-tht-heat-transfer-nasdaqthti-crown-media-nasdaqcrwn-the-eastern-nasdaqeml/1212022/