Zimmer Biomet Organizational Structure

Zimmer Biomet Organizational Structure

David Dvorak is the CEO of Zimmer Biomet, and 11 other members make up the OpCom team that is helping to facilitate annual growth and the integration of two cultures. This team consists of direct reports to Dvorak, but each member of the OpCom team has a diverse group of people below them that are all contributing to the success of Zimmer Biomet’s function. The structure of the team is divided into segments of Regional Executives around the world, business unit leaders in different product groups, and functional executives regarding HR, financials, legal, etc. These 3 groups provide the structure of how Zimmer Biomet is segmented.

Zimmer Biomet’s management team embodies the full range of leadership
Zimmer Biomet’s EPS in 2016 was $1.51 compared to $0.77 in 2015 (Morningstar, 2017). The reason this is initially low in 2015 was due to the integration and merger finalization in 2015 with Biomet. The company’s stock changed from Zimmer Holdings (ZMH) to Zimmer Biomet Holdings (ZBH), which gave the company a new face on the NYSE. While earnings per share shows an investor their return on investment, a dividend can also help the investor make money on their investment (Garrison, Noreen, & Brewer, 2015). Zimmer Biomet began paying a dividend in 2013 at $0.72, since then it has gradually risen to $0.88 in 2015 and $0.96 in 2016 (Morningstar, 2017). While the dividend makes investors happy, it is more important to assess the dividend payout ratio to understand the financial state of the company. It is important to asses the payout ratio because a high dividend payout ratio means Zimmer Biomet is paying more of its earnings out to investors, thus keeping them happy. Less retained earning will result in a lower future growth rate because less investment is taking place. Also, a higher payout ration indicates a higher probability of a dividend cut for those same reasons. In 2014, as Zimmer Holdings, the company had a payout ratio of 18.5%. However, as Zimmer Biomet Holdings, the dividend payout ratio rose to 88% in 51.4% 2015
The current competitors that Zimmer Biomet faces are that of Stryker, Depuy Synthese, and Smith and Nephew. These companies are pure players in orthopedics, and they are the largest industry drivers within orthopedics. With this being said, the orthopedic industry is an oligopoly because there are only a few key players and many buyers with various hospitals and surgery centers, and they all sell similar products that solve the same need; a joint replacement (Mankiw, 2015). The chart to the left shows the current status of the orthopedic industry leaders. While there are other players in the orthopedic industry, none of the companies are big enough or as powerful as the 4 listed above, as they only enter the market with hopes to be acquired by one of these 4 key players. While Zimmer Biomet’s top line revenue does not match that of Stryker or Depuy Synthes, it is working hard to facilitate the culture integration to two companies to grow and soon become the industry