As the EFE Matrix in this document shows, the most important external factors in order to be successful in the industry are technological advancements and the fact that only 10% of the hearing affected people actually possess the hearing aid. Local health policies like in France, for example, social securities partially reimburse the costs related to the purchase. Socio-demographic changes have resulted in a higher acceptance rate of the equipment and an aging population has enlarged the potential market size. High entry barriers reduce the competitive landscape for Sonova which helps maintain its leading position. The company responds effectively to the technological advancements and high entry barriers factor through its core strategy: continuous innovation. The fact that Sonova has owned a successful cycling team even though many doping issues have arisen has helped increase the visibility of the firm and its products, nevertheless, poor marketing efforts should be tackled. The most important factor that Sonova has to tackle is the lowering of psychological factors, attitudes and beliefs regarding the hearing aid. Exchange rate fluctuations that have rendered the Swiss franc much stronger vis-a-vis other currencies have had tremendous impact on revenues. (53M CHF loss in revenue). Product innovation and competitor acquisition in order to gain market share are the two main pillars of the firm's business strategy, hence Sonova is tackling threats such as competition and rapid technological evolutions very effectively. Court decisions, on the other hand, constitute a threat to Sonova's expansion strategy. The company is handling threats such as globalization and technical regulations quite effectively by placing some of its production facilities in China and hence reducing production costs and by acquiring the European and American standard and health approvals.
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