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Delving into BSX’s Category Leadership Growth Strategy

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Aug. 22 2016, Updated 11:04 a.m. ET

Overview

The US medical device industry is going through a transformation wherein all stakeholders are moving toward value-based care, and many new business models are popping up in the industry.

Some major medical device companies are expanding across geographies and product segments, while others are focusing on consolidation. A number of companies are going through restructuring, moving toward leaner and stronger business models. 

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Most of the industry is focused on transitioning to business models that will provide strong positioning in the healthcare market. While many companies are moving toward fee-for-service models and bundled payment structures, Boston Scientific is focused on advancing through its category leadership strategy. It aims to add depth to its product portfolio, which is composed of its seven business segments, as seen in the above diagram.

On the other hand, some other major companies in the US medical device industry, including Medtronic (MDT), Zimmer Biomet Holdings (ZBH), and Abbott Laboratories (ABT), have invested in large acquisitions to expand the depth and breadth of their products and services.

Investors interested in Boston Scientific can consider investing in the Vanguard Growth ETF (VUG), which has holdings in the stock.

Category leadership strategy

Boston Scientific is continually investing in mergers and acquisitions, collaborations, and R&D (research and development) initiatives to advance its growth strategy of category leadership in all seven of its segments.

This strategy is helping the company to drive above-market growth. Boston Scientific has witnessed faster growth following its acquisitions of the atherectomy and thrombectomy business lines, which it acquired as part of its American Medical Systems acquisition. 

Thus, the company believes that its category leadership strategy, along with the strategic mergers and acquisitions, is providing strong results and contributing to growth.

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