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St. Jude Medical’s Surround AF Strategy: Does It Help Growth?

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Growth strategy

St. Jude Medical (STJ) has grown largely through innovations, strategic acquisitions to expand its offerings across business segments, and other innovations in its acquired product portfolio. The company has always focused on expensive epidemic diseases.

Its Surround AF (atrial fibrillation) strategy is intended to provide innovative products across the care continuum of advanced diseases to improve outcomes and reduce the cost of care. The company focuses on providing physicians with product options for the treatment of their patients.

surround strategy

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Business model changes

The healthcare industry has been going through a paradigm shift. The industry has changed from a fee-for-service to a fee-for-value model. St. Jude Medical realized the changing dynamics of the industry and initiated changes in the company’s business model in 2012.

The company has evolved into a comprehensive service provider in targeted disease areas. It started with the development of multiple tools for electrophysiologists for AF therapy through innovations and acquisitions. It was an approach similar to the company’s other product segments. The changes led to the elimination of product gaps in the company’s portfolio, thus contributing significantly to growth.

St. Jude Medical now operates as a single operating segment. Prior to the structural changes, it had four operating divisions. But the sales structure remains focused on its product line.

Strategy implementation

St. Jude Medical has been advancing in the heart failure device therapy area as well as neuromodulation. CardioMEMS in heart failure therapy is one of its recent acquisitions. It provides access to products that will be available to patients for the rest of their lives. They will have access to treatment therapy and technology options, thus providing value to patients. The CardoMEMS HF (heart failure) system is a remote hemodynamic monitoring system. It’s currently the only such device approved by the FDA (U.S. Food and Drug Administration).

Medtronic (MDT), Abbott Laboratories (ABT), and Becton Dickinson (BDX) are some of the other companies in the medical device industry that are adopting innovative and strategic business models amid a changing industry landscape. ETFs such as the Health Care Select Sector SPDR ETF (XLV) provide an investment option to maintain diversified exposure to the healthcare industry.

Next, let’s look at innovation and whether it can drive St. Jude Medical’s growth.

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