Wednesday, October 30, 2013

Riding the Industrial Trend: Intuitive Surgical

The McKinsey Quarterly report by Bradley, Dawson and Smit reveals that companies in the middle quintile in terms of economic profit must a) ride a favorable industrial trend, and b) be fuelled by substantial strategic or operational shift in order to join the ranks of the elites.

This analysis is consistent with the rising fortunes of Intuitive Surgical, projected by Forbes as the fastest growing American company in terms of growth in profitability in 2013. Intuitive Surgical is a medium sized corporation in the American healthcare and medical research industry, known for producing the robotic surgical system, the da vinci surgical system. The company’s growth in terms of revenue and profitability has remained consistent with the rapid growth of the industry – with the US spending about $2.9 trillion in healthcare in 2013, and planning to increase this amount to $3.4 trillion by 2016 (Plunkett).

Over the years, the company has also made strategic decisions that demonstrated its keen operational sense. In 2003, Intuitive Surgical chose to merge with Computer Motion Inc., a rival producer of robotic surgical equipment, thereby eliminating competition and expanding the company. With the ongoing disputes over the implementation of Obamacare, the company has turned its attention to expanding into overseas markets, such as Japan, where interest in healthcare and medical research is growing significantly.
The article linked below explores more in-depth about the future growth strategies of Intuitive Surgical, which seems to lend credibility the point made by the authors of the McKinsey report.

Plunkett Research -
Intuitive Surgical -

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