CEO: Kevin Lobo
Based: Kalamazoo, MI
2014 diagnostics division sales: $9.7 billion
2013 diagnostics division sales: $9.0 billion
Change: +7%

The focus has been on what Stryker ($SYK) did not do in the rapidly consolidating orthopedics industry.

By announcing plans to repurchase shares worth $2.6 billion, the company signaled it wasn't interested in acquiring fellow orthopedics player Smith & Nephew ($SNN), putting an end to long-running rumors.

Instead it focused on smaller "tuck in" acquisitions like CHG Hospital Beds and Small Bone Innovations. Company officials are excited by the latter's foot and ankle implants, which powered 25% growth in that arena.

Increasing the breadth of its offerings has influenced Stryker's sales strategy.

"We shifted our focus about three years ago to moving towards full account conversions which is frankly something that wasn't possible. Five, six years ago we didn't have the product portfolio to be able to do a complete account conversion. And so we would have niche products in different hospitals around the country. And that shift in focus to total account conversions took us a little bit of time, but it's now working," said CEO Kevin Lobo during the most recent earnings call.

The company's biggest bet going forward remains the rise of robotic orthopedic surgery, due to the $1.65 billion acquisition of Mako Surgical in 2013. The trend has been a little slower to take hold than anticipated but appears to be underway. Stryker just got the FDA's permission to use the Mako robot for total hip replacements and is aiming to get the go-ahead to use it for total knee replacements as well. It already uses the Mako robot for partial knee surgeries.

"We really believe it is going to revolutionize how orthopedics surgery, reconstructive surgery is performed," said Stryker Vice President Katherine Owen during the earnings call. "We think the Total Knee which we filed for in late 2014 is by far the biggest market opportunity and it is a big bet. We believe we can drive meaningful market share gains, which has really never been done on a sustained basis in the reconstructive market. So it's a clear bet on the direction that the industry is going to go."

Stryker is more U.S.-centric than its competitors. Emerging markets represent only 8% of sales. Officials said the company plans to invest heavily in China and India, but is pulling back in other markets like Russia, Turkey and Brazil.

Lobo announced yet another plan to improve sales in Europe, where the company's market share is low. "We've been trying for 10-plus years (to improve share in Europe), and we have changed leadership multiple times. We've changed organizational structures within Europe multiple times. And we haven't been able to change the dial," he conceded.

At 11.7%, the medsurg division, consisting of devices like endoscopes and tools for sports surgery, grew the fastest in 2014. It had sales of $3.7 billion. The orthopedics division had sales of $4.2 billion and neurotechnology and spine contributed $1.7 billion. Both grew about 6% at constant currencies.

-- Varun Saxena (email | Twitter)

For more:
Stryker gets FDA clearance to use Mako robot for hip replacement
Stryker may cool M&A fervor with $2.6B for share buybacks
At JP Morgan, Stryker CEO embraces sales reps, dismisses Smith & Nephew plan to eliminate them