Regulatory EnvironmentUS RegulationsStryker products are subject to varying degrees of government regulation by the FDA and other regulatory authorities in the United States and internationally. The FDA requires extensive clinical testing, which highlights the safety and effectiveness of all products. Costs associated with regulations can be significantly high, particularly with higher risk Class III devices. The process can also take a long time and there is no guarantee that approvals will be granted. In the past, failure to comply with appropriate regulatory requirements has subjected Stryker to a wide range of sanctions, including fines, recalls and discontinuation of product production. To reduce this risk, Stryker must comply with all regulatory standards. Healthcare reform in regulatory change efforts could reduce the long-term returns of Stryker's U.S. operations, which, in 2012, accounted for 65% of the company's business (Stryker Corporation, 2013). Foreign Regulations Internationally, Stryker's operations will be subject to numerous potential costs and additional risks, including, but not limited to, changes in foreign medical reimbursement policies and programs, and due to observed changes in foreign regulatory requirements, weakened protection of intellectual property rights in certain countries outside the United States, trade protection practices and policies, and/or economic uncertainty. Recently, the Securities and Exchange Commission (SEC) accused Stryker of violating the Foreign Corrupt Practices Act (FCPA) when “subsidiaries in five different countries bribed doctors, healthcare professionals, and other government officials in order to obtain or retain business” ( Securities and Exchange Commission, 2013)... middle of paper... merging technologies or having better financial marketing and other resources than competitors customers, employees, and strategic partners (Stryker Corporation, 2013). Acquisitions In addition to internally developed products, Stryker relies heavily on investing in new technologies through acquisitions. There is inherent risk in investing in medical technology because there are no guarantees that any potential acquisition will be successful or will not have an adverse impact on Stryker's business and operations. Particular risks are included in our business-required activities to integrate new businesses, which may result in the need to deploy more resources to integration and product development activities than initially anticipated.