A Key Breakdown of Medtronic’s Business Model

Medtronic generates revenue through four segments: Cardiac and Vascular Group, Minimally Invasive Therapies, Restorative Therapies, and the Diabetes Group.

Sarah Collins - Author

Dec. 1 2015, Published 2:57 p.m. ET

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Medtronic’s business model

Medtronic (MDT) generates revenues from manufacturing and selling device-based medical therapies in following four primary segments:

  • Cardiac and Vascular Group
  • Minimally Invasive Therapies Group
  • Restorative Therapies Group
  • Diabetes Group

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Medtronic’s Cardiac and Vascular Group

Medtronic’s CVG (Cardiac and Vascular Group) revenues grew by 7% in 2015, driven largely by organic growth initiatives. CVG represented 46% of the total revenues of Medtronic in 2015. Medtronic’s major Competitor in this segment is St. Jude Medical (STJ). (To know more about Cardiac and Vascular Segment, check out Market Realist’s series How Are Cardiovascular Devices Classified?)

Medtronic’s Minimally Invasive Therapies Group

Medtronic’s MITG (Minimally Invasive Therapies Group) segment was set up after the acquisition of Covidien. It consists of the majority of the Covidien’s former operations. This segment primarily focuses on diseases affecting the lungs, pelvic region, kidneys, gastrointestinal tract, and obesity, as well as on the application of minimally invasive therapies. Major competitors in the same segment include Johnson & Johnson (JNJ) and Boston Scientific Corporation (BSX).

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Medtronic’s Restorative Therapies Group

Medtronic’s RTG (Restorative Therapies Group) segment generated 33% of the company’s total revenues in 2015. The segment provides restorative therapies and services to patients suffering from chronic medical conditions.

Notably, the segment’s neurovascular division—the former Covidien segment—represents a new addition to Medtronic’s RTG segment, providing products and therapies to treat diseases of the vasculature in and around the brain. Major competitors in this segment include Stryker Corporation and NuVasive.

Medtronic’s Diabetes Group

Medtronic’s Diabetes Group represented approximately 8% of the company’s total revenues in 2015. In order to improve the performance and expand the product portfolio of the Diabetes Group, the company made key leadership changes in this segment in 2015, which has led to the delivery of stronger financial performance.

Medtronic’s key launches and initiatives

Medtronic has also launched a number of products catering to diabetes patients, such as the MiniMed 640G system, an automated insulin delivery system, and with its acquisition of Diabeter, an independent Netherlands-based diabetes clinic and research center, the company has ventured into integrated patient care enabled by data analytics capabilities.

One of the major ETFs with exposure to Medtronic is the Vanguard Dividend Appreciation ETF (VIG). Medtronic represents 2.62% of VIG’s total holdings.

Continue to the next part of this series for a look at Medtronic’s Cardiac and Vascular Devices segment.


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