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.