Why Should Stryker Expand to China

• Why internationalize with Trauson

• Where to internationalize: China then expand to other Asia-Pacific countries such as India

• How to internationalize: entry mode is by keeping Trauson run independently with local?

• How to manage Trauson and after acquisition

In March 2013, in a move to strengthen its presence in emerging markets, Stryker acquired Trauson Holdings Company Limited, the leading trauma manufacturer in China and a major competitor in spine segment with $764 Million. “With the acquisition of Trauson, we are well positioned to broaden our presence in China and to expand into the fast growing value segment of the emerging markets through a well established brand. We look forward to build long history of success.” Said Kevin A. Lobo, President and CEO of Stryker. By the time prior to the acquisition in 2012, it was reported that US sales represented 65% of the total sales for Stryker, there was clearly room to grow outside of US. (Need to follow up with xx% in 2015) The orthopedics market in China has great growth potential. In a highly fragmented Chinese market, Trauson was the largest distributor of trauma products and the No. 3 distributor in spine. To give a quickly financial snapshot, Trauson is highly profitable with gross margins in the high 60% range. The combined scale, local and global expertise, complementary product offerings and market breadth of Trauson and Stryker would create significant competitive advantages in the increasingly dynamic orthopedic industry and provide a platform to fully realize the future growth opportunities in China and globally.

It boosted Stryker's relatively low presence in fast-growing emerging markets; it provided Stryker with a strong presence in the large and fast-growing value segment of the Chinese orthopedic market; and