Environmental Scan External Environmental Factors Stryker Is Essay

Length: 5 pages Sources: 3 Subject: Business Type: Essay Paper: #24063771 Related Topics: Environmental Analysis, Internal Factors, Environmental Problems, Environmental Protection
Excerpt from Essay :

Environmental Scan

External Environmental Factors

Stryker is a medical equipment manufacturer and marketer. The regulatory environment is the most critical external factor for the company. The medical device industry is governed by the FDA, which must approve all medical devices prior to their use by the public. Almost all of Stryker's products is under FDA jurisdiction, and therefore the company is highly dependent on the FDA for getting its products to market. If a product is not granted approval, it cannot be sold until it has been modified to get approval. There are high costs to the company associated with the regulatory burden, and the company needs to develop competency in navigating these regulatory waters.

The legal environment is another point of interest, at the very least, for Stryker. The new health care laws of the Affordable Care Act are likely to affect the industry in a range of ways. The most important of these for Stryker is that there is going to be a shift in bargaining power towards the customers, payers and end users of medical equipment. Stryker is going to face companies that have either less capacity to pay for high end new devices, or less desire to do so. This increase in buyer bargaining power is something that could threaten the profit margins of Stryker, all other factors being equal. It is unknown at this point, with the major components of the law just now coming into force, what the actual impact will be.

Another major force in the external environment is technology. There has been a rapid pace of change in medical technology in recent years, and this has in many ways framed the competition in this industry. Firms that do not have a high level of technological competency will fall behind in the competitive marketplace. To an extent, major new innovations can help restore some of the bargaining power to the industry that might have been lost with the ACA, but there is also the risk that a combination of higher costs for investments in technological research and development, combined with a reduced ability to pass these costs onto payers, is going to harm profitability of medical equipment companies further.

There is...


The health care business is general does not track the general economy, because health care has a fairly low price elasticity of demand, owing to information asymmetry (buyers know little) and the consequences of not purchasing health care for those who need it. The social environment is therefore a much more significant driver. The U.S. is an aging society, and the baby boom generation is just getting into their senior years, where there is much greater health care demand. The downside for Stryker is that anyone over 65 is covered by Medicare, which has the most bargaining power of any buyer in the industry, but the upside is that there are tens of millions of boomers still on private insurance, and that this bulge in the population graph creates tremendous demand for the coming couple of decades.

The competitive environment remains challenging as well. There are several firms competing directly with Stryker. While the company is granted by the FDA intellectual property rights protections that are robust, once a device goes generic or a competitor can imitate that device without infringement, there is significantly reduced profitability in the industry. Stryker needs to maintain its competitive position in order to thrive. Overall, the competitive environment is actually less important than the other facets of the external environment.

Internal Competitive Environment Scan

Stryker has achieved some positive strengths. The company has been listed as one of the best companies to work for by Fortune Magazine, an informal designation but one that indicates a strength in human resources that will allow Stryker to attract and retain top talent. This is important in a business where research and development is so critical to success. It was also named as one of the most admired companies by the same publication.

Financially, Stryker has grown its income steadily over the past five years. While this is good news, profit growth has not kept up, as the analysis of the external environmental factors predicted would be the case. That said, Stryker has a relatively good gross margin, and the research & development costs are not unduly high relative to the company's revenues.…

Sources Used in Documents:


FDA.gov. (2013). Stryker Orthopaedics -- ShapeMatch Cutting Guide Food and Drug Administration. Retrieved February 17, 2014 from http://www.fda.gov/medicaldevices/safety/listofrecalls/ucm348536.htm

Garde, D. (2013). Stryker recalls spinal implant, gets deadly FDA label. Fierce Medical Devices. Retrieved February 17, 2014 from http://www.fiercemedicaldevices.com/story/stryker-recalls-spinal-implant-gets-deadly-fda-label/2013-08-29

MSN Moneycentral. (2014). Stryker Corporation. Retrieved February 17, 2014 from http://investing.money.msn.com/investments/stock-income-statement/?symbol=SYK

Hollmer, M. (2013). Stryker confronts mounting metal hip recall lawsuits. Fierce Medical Devices Retrieved February 17, 2014 from http://www.fiercemedicaldevices.com/story/stryker-confronts-mounting-metal-hip-recall-lawsuits/2013-06-04

Cite this Document:

"Environmental Scan External Environmental Factors Stryker Is" (2014, February 17) Retrieved August 19, 2022, from

"Environmental Scan External Environmental Factors Stryker Is" 17 February 2014. Web.19 August. 2022. <

"Environmental Scan External Environmental Factors Stryker Is", 17 February 2014, Accessed.19 August. 2022,

Related Documents
Environmental Scan: Two Clothing Retailers
Words: 894 Length: 3 Pages Topic: Business Paper #: 41121032

Environmental Scan: The Gap and Urban Outfitters An environmental scan refers to the process of carefully monitoring both the internal and external environments of a particular company to determine if there are an nascent signs of threats or opportunities which might impact its present or future plans or intentions. For example, if one were to examine the retailer Gap, Inc., this is a company which has undergone a great deal of stress

Environmental Scan of Two Companies: The First
Words: 1207 Length: 4 Pages Topic: Business Paper #: 73572931

Environmental Scan of Two Companies: The first step towards an organization's strategic management is environmental canning, which involves collecting information for the internal and external of the company. Generally, environmental scan is described as the watchful evaluation and monitoring of the internal and external environments of the company to identify early indications of opportunities and threats that may affect the firm's current and future plans. Through this process, the organization can

Environmental Scan
Words: 629 Length: 2 Pages Topic: Management Paper #: 46045885

Introduction Environmental scanning can be defined as an approach of obtaining information regarding external events that can be beneficial to organizations in the identification of prospective trends and construing them. In other words, it encompasses the analysis of factors that are external and beyond the control of the organization. More often than not, these trends usually comprise of five dissimilar sources, including the economic, social, technological, legal and competitive forces (Jain

Environment Scan Environmental Scan: Just Homestay LLC
Words: 1597 Length: 6 Pages Topic: Education - Computers Paper #: 8689010

Environment Scan Environmental Scan: Just Homestay LLC The emergence of technology in the past decades has led the world to many innovations. Things that were once impossible to conceive, such as minute-to-minute trans-Atlantic communication, are now commonplace. With the opening of communication, furthermore, has come the opening of borders and thus of constant interaction of communities that had previously interacted only in limited amounts. The history of studying abroad and of host families

Environmental Analysis: Target Corporation the Objective of
Words: 1835 Length: 7 Pages Topic: Pharmacy Paper #: 70286686

Environmental Analysis: Target Corporation The objective of this work is to complete an environmental scan and economic analysis on Target and to identify any major changes expected to affect the remote, industry, and operating environments. This work will refine the analysis of the forces and trends, utilize a macroeconomic forecast of economic indicators affecting Target in the future and analyze the noneconomic factors in the remote environment including: (1) social/cultural; (2)

Environmental Scanning Environmental Scanning Generally
Words: 835 Length: 2 Pages Topic: Business Paper #: 711394

The long-term objectives of the pre-paid phone card company need to first focus on gaining new customers quickly, ensuring they stay loyal over the long-term. This has much more to do with branding and service than price. In addition to this strategic objective, there is also the need to continually add new services and innovation to attract new customers, while requiring suppliers to also innovate over time (Porter, 1980). The additional