MEDTRONIC

Fall Foundations 2014 | Business Acumen

> Medtronic is the world’s largest medical technology company, offering an unprecedented breadth and depth of innovative therapies to fulfill their Mission of alleviating pain, restoring health, and extending life.

> Last year, more than 10 million people benefited from their medical therapies, which treat cardiac and vascular diseases, diabetes, and neurological and musculoskeletal conditions.

WHAT IS THE ROLE OF THE ORGANIZATION?

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> The costs of the services and products directly affect our customers suffering from chronic conditions and can potentially affect the costs incurred by Cigna.

RELATIONSHIP AND IMPACT TO CIGNA

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To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore

health, and extend life.

MEDTRONIC MISSION

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> CEO: Omar Ishrak, Chairman & CEO

> Founded in 1949 by Earl Bakken and his brother-in-law Palmer Hermundslie as a medical repair shop

> Headquartered in Friedly,  Minnesota> Created first battery-powered external artificial pacemaker

(1957) and the first commercially produced implantable pacemaker (1960)

> First company in the US to experiment a four-day, 36 hour week> First European Office opens in Paris, France in 1972> Created the Medtronic Hall mechanical prosthetic valve in 1977> Created the world’s first commercial insulin pump in 1983

HISTORY

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> In 1970, Medtronic calculates that every 52 minutes, another person in the world is helped by one of the company’s products or therapies– In 2013, it’s every 3 seconds

> Medtronic Hall mechanical prosthetic valve is still the most common valve design in use

> World’s largest medical technology company> In more than 140 countries> 49,000+ employees> World headquarters in Minneapolis, Minnesota

BACKGROUND

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>Heart Rhythms Patient Services>Cardiovascular Patient Services>Neuromodulation Patient Services>Medtronic Diabetes>Spine and Biologics Customer Service>Meniett Therapy Analyst

PATIENT SERVICES

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> Cardiac & Vascular Group> Aortic and Peripheral Disease Management> Cardiac Rhythm and Heart Failure Management> Coronary and Structural Heart Disease Management> Restorative Therapies Group > Neuromodulation > Spine> Surgical Technologies> Diabetes Group

BUSINESS UNITS

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> Cardiac Rhythm> Cardiovascular> Diabetes> Ear, Nose, and Throat> Gastroenterological> General Surgery> Neurological> Orthopedic> Reconstructive and Plastic Surgery> Spinal> Urological/Urogynecological

PRODUCTS

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> 140 Countries

> Asia Pacific> Central and Eastern Europe> Greater China> Japan> Latin America> Middle East and Africa> South Asia> North America> Western Europe and Canada

COUNTRY LOCATIONS

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> 10 million people benefited from our medical therapies, which treat cardiac and vascular diseases, diabetes, and neurological and musculoskeletal conditions.

KEY CUSTOMERS

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> Order Methods– Auto Reorder Program– Online Store– myMedtronic Connect Mobile App– Supply Reorder Card– Automated Phone System

>  Hospitals and Physicians

> Services– Phone– Fax– US Mail– Email

DISTRIBUTION CHANNELS

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>Therapy Innovation

>Globalization

>Economic Value

STRATEGY

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Clinical Evidence

+ Economic Evidence

+ Customized Solutions

Better Customer Value

VALUE PROPOSITION

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People

Cash

Profit

Assets

Growth

RELATIONSHIP TO 5 DRIVERS

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People

Cash

Profit

Assets

Growth

RECENT PERFORMANCE AROUND THE 5 DRIVERS

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Change in Revenue: 3%Change in Expenses: 8%

Cash Flow: no change

Change in Profit: (12%)

Change in Assets: 9%

> Medtronic is looking to move its corporate headquarters to Ireland

> The continuous glucose monitor market is expected to grow

> Medtronic wants to launch cutting-edge devices such as the Reveal LINQ miniaturized implantable cardiac monitor, or ICM, and Activa "brain pacemaker."

KEY THINGS TO KNOW

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