Acquisition Boston Scientific

1
Acquisition Boston Scientific Guidant
2
Porter 5 Forces Analysis
3
SWOT Analysis

• Strengths
• An aggressive acquisition strategy
• RD investments
• Supply capacity, sales force and global presence
• Strong financial Performance
• Merger with Guidant

• Weaknesses
• Problems of quality controls and safety
  identified by the FDA.
• Delayed or limited authorization to sell new
  products
• Rise in debt
• After Deal problems

4
SWOT Analysis

• Opportunities
• Growth in healthcare spending

• Threats
• Intense Competition
• Generic products
• Bargaining power of buyers

• Merger with Guidant Conclusion
• Opportunity in term of increase in revenue,
  diversification and expansion of the business.
• Boston has to deal with many challenges.

5
BCG Growth Share Matrix Analysis
Scientific Cardiovascular Scientific Express2TM
Coronary Stent System Scientific Filter Wire EXTM
Guidant Interventional Cardiology Guidant
Coronary Stent Scientific Neuromodulation
Guidant Pacemakers Guidant Implanted
Defibrillators Guidant Cardiac Surgery Scientific
Texus Stents Scientific Coronary Stents
Guidant Bare-metal stent Scientific Cardiac
Other Vascular Surgery System
95 80 60 40 20 10 5 0
6

• Products/Operations

7
Strategic Acquisitions

• 2 types of strategic acquisitions
• Result of the combination is far greater than the
  sum of the parts
• AB (merged) gt AB (stand-alone)
• Improvement of the profit margins of Newco
• The core principal that runs through every
  example of successful MA is integration. A
  strategic acquisition cannot be successful if not
  adequately integrated in the Newco.

8
Elements for a Strategic MA
Elements Strategy
Acquire customers No GUIDANT is a competitor Horinzontal Merger
Capitalize on a company strength Yes. GUIDANT is a powerful business accelerator for BOSTON SCIENTIFIC.
Cover a weakness BOSTON SCIENTIFIC becomes more diversified
Improving or completing a product line A new line of business for BOSTON SCIENTIFIC with strong revenues.
Technology build or buy? BOSTON SCIENTIFIC acquires the GUIDANT technology
Acquisition to provide scale and access to capital markets BOSTON SCIENTIFICs market cap  18bn GUIDANTs Market Cap  25bn BOSTON SCIENTIFIC will become 1 in medical supplies industry.
Protect and expand mature product lines Unknown.
Protect customer base from competition BOSTON SCIENTIFIC will provide customers a more diversified offer.
Opportunistic acquisition for when the market turns BOSTON SCIENTIFIC needs another business line to thwart this risk of Taxus being less profitable
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Conclusion

• Benefits
• opportunity to increase revenues
• diversification and expansion of the business
• Challenges
• Legal issues
• Benchmark the market
• Lowers its cost to achieve its economies of scale