In August 2011 we announced five new strategic priorities.

First we will reinforce our position in the Established Markets (US, Europe, Australia, New Zealand, Canada and Japan).  We see opportunities to build upon existing strong positions, to win market share through greater innovation and drive efficiencies to liberate resources. Through these actions we will meet the challenges of subdued markets, maintain revenue growth and maximise margins. 

Second, we will build upon our initial success in China and expand to create sustainable businesses in India, Brazil and Russia.  These Emerging Markets are enjoying good GDP growth and have an expanding surgical infrastructure, the two key features required to make a new market attractive to Smith & Nephew.  In particular, we see significant opportunities to build value through augmenting our existing portfolio with new products specifically designed for and manufactured in these markets.

Our Established and Emerging Market activities will be underpinned by an unremitting focus on delivering value through innovation, our third strategic priority.  Much of our recent success has been built upon product innovations - our VERILAST◊ bearing technology for knee replacement, the VISIONAIRE◊ Patient Matched Instrumentation sets, disruptive negative pressure wound technology products such as PICO◊ and sports medicine advances like the FAST-FIX 360◊ Meniscal Repair System.  We will accelerate our rate of innovation by increasing the research & development budget and identifying and investing in the projects that will deliver maximum value.

Next, we will simplify and improve our operating model to maximise efficiency in everything we do.  There are opportunities to streamline our operations and manufacturing processes and to remove duplication, particularly as a result of the creation of Advanced Surgical Devices from the combination of our Endoscopy and Orthopaedics businesses.  We are also building strong global functions - human capital, regulatory, quality, sustainability and legal affairs – to support our management teams in their quest to better serve our markets and customers.

Finally, we will augment our organic growth through acquisitions, our final strategic priority.  We will continue with our successful strategy of acquiring complementary technologies, seek to support our emerging markets ambitions by acquiring local manufacturing and/or distribution businesses and we remain alert to larger opportunities to support our expansion in the advanced woundcare or minimally invasive surgery sectors.