Internet Mini Case 3 Stryker Essay

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Internet Mini Case #3
Stryker Corporation
Maryanne Rouse

Stryker Corporation (SYK), a leading maker of specialty medical and surgical products, traces its origins to a business founded by Dr. Homer S. Stryker, an orthopedic surgeon with a talent for invention and a desire to improve the tools that physicians use to treat patients. At the end of 2000, Stryker was composed of three operating divisions: orthopedic implants (55% of sales); medical and surgical equipment (38% of sales); and physiotherapy (7% of sales.) In 2001, the company created a new operating group, Stryker Biotech, Spine, and Trauma, bringing the number of operating divisions to four. Responsibility for international sales is divided between the MedSurg Equipment (Canada and Latin America) and Stryker International. Stryker International is responsible for sales and distribution of the company’s products in Europe, Japan, and Asia/Pacific. The company has grown via internal venturing, acquisition, and strategic alliances. Recent acquisitions and alliances include:

Date Acquisition/Alliance

April 2002 Stryker Japan entered an agreement with Integrated Surgical Systems, a pioneer in medical robotics for surgical applications, to develop software for the Stryker knee prostheses. While the agreement is with Stryker Japan, the software will be made available worldwide.

November 2001 Acquired the business of an independent Italian distributor of the company’s products to consolidate the distribution of substantially all of Stryker’s products in Italy

August 2000 Completed the acquisition of Image Guided Technologies, Inc., a manufacturer of three dimensional optical devices

June 2000 Acquired Colorado Biomedical, the developer and manufacturer of the Colorado Microdissection Needle, a device used for precision electro-surgery

November 1999 Acquired all the outstanding common stock of InfoMeddix Communications, a developer and manufacturer of video communications hardware and software that enables telecommunication of surgical images

December 1998 Acquired Howmedica, the orthopedic division of the global pharmaceutical competitor Pfizer.

Operating Divisions

Howmedica Orthopedic Implants

Stryker’s presence in the orthopedic implants market was boosted by the $1.8 billion acquisition of Pfizer’s Howmedica unit in 1998. Renamed Howmedica Orthopedic Implants, this division produces a variety of total and partial hip and knee implants, shoulder and spinal implants, associated instruments, trauma-related products, and bone cement. Made of cobalt chrome, titanium alloys, ultra-high molecular weight polyethylene, or ceramics, artificial joints are implanted in patients whose natural joints are damaged by arthritis, osteoporosis, other diseases, or injury. In 2001, Stryker received FDA approval for the OP-1 Bone Growth Device. Composed of recombinant human osteogenic protein-1 and a bioresorbable collagen matrix, OP-1 induces formation of new bone. Key competitors in the orthopedic implant segment include Biomet, the Swiss medical technology firm Sulzer Medica, Zimmer Holdings, Orthofix International, and Johnson and Johnson.

MedSurg Equipment

The MedSurg (medical and surgical) equipment division is composed of four operating units:

The Stryker Instrument unit designs, manufactures, and sells powered surgical drills, saws, fixation, and reaming equipment as well as other surgical instruments used for drilling, rasping, or cutting bone, wiring or pinning bone fractures, and preparing hip or knee surfaces for the placement of artificial hip or knee joints.

The Stryker Endoscopy unit designs and manufactures a broad range of medical video imaging equipment and instruments for arthroscopy and general surgery. Arthroscopic procedures, in which the surgeon removes or repairs damaged tissue through several small punctures rather than an open incision, are less invasive than traditional surgical procedures. Patients experience