Hutchinson Whampoa's Harvard Case Study

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Harvard Case Study Stryker Corporation: Capital Budgeting Term Paper Laini Tsang Golden Gate University MS Finance Stryker’s Capital Budgeting Harvard Case Study Table of Content      Case Background and Summary Pharmaceutical Industry’s Landscape Stryker’s New CERS and why it is “painful”? Propositions Conclusions 2 Stryker’s Capital Budgeting Harvard Case Study Case Background and Summary Founded in 1941 in Michigan, Stryker Corporation is a fast-paced company with continuously exceptional growth rates. Over the last 27 years, the company historically increased revenues by 20%. The company’s culture prides itself on service ethics, integrity, innovations, accountability, and customer relationships; it is one of the world’s leading medical technology companies with history of successful stories. Stryker’s products focus on implants for joint replacement, trauma, spinal surgical products, neurologic and endoscopic equipment. The company has well diversified product portfolios with solid fundamentals. Over the years, the company’s accretive mergers and acquisitions brought operational synergies and cost efficiency, strengthening the pipeline with increasing profitability. This paper examines Stryker’s capital budgeting process (CER – Capital Expense Request) and why this process, after its modifications in 2005, had slowed down the company’s internal capital project requests. From the company’s financials, we can see their capital expenditure from 2000 to 2005 was doubled; however, it was surprisingly to see a drop of 20% in 2006, one year after the CER process modifications were brought into. Employees did not feel great on the changes; their morale was hurt; they concluded that they were not motivated as previously as they had been due to the modifications. The framework of this analysis is to first look into pharmaceutical

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