10-12 Page final paper business plan, business and finance homework help

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Business Finance

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The company that must be used is MIracle Ear

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Running Head: MIRACLE-EAR COMPANY BUSINESS PLAN

Miracle-Ear Company Business Plan
Name
Institution

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MIRACLE-EAR COMPANY BUSINESS PLAN
Market Domain
Historical Significance
Dramatic changes have been experienced and continue to be encountered in the hearing aid
manufacturing industry. The industry is going through a proliferation of innovations due to a
number of factors which are:


The need to keep up with the changing and maturing of digital technology.



The need to remain competitive in the market considering the increasing number of new
entrant companies in the market.



The need to enhance the efficiency and cost effectiveness of the products provided.
The hearing aid market sales have been observed to grow at a modest pace. As per a report

released by the Hearing Industries Association, the market had risen to 7.2% in 2015 from 4.8%
in 2014. The increase has been attributed to three main factors which are:


The increased occurrence of hearing loss amongst the population.



The presence of aged baby boomer persons within the population.



The low rate of penetration of the hearing industry in the past due to the high cost of hearing
aids. The hearing industry has had a problem penetrating into the market due to the high
prices of its products. Aside that, fewer people purchase hearing aids due to the fear of
social stigma; most people consider hearing aids as a sign of old age and infirmity.
The companies within the hearing aid industry have therefore had to come up with new

innovative strategies to make their products appealing and acceptable to the public. Alongside this,
the companies also have to ensure that their products are affordable and efficient to use; hearing
aid companies are therefore in a quest to ensure cost containment and simultaneously high-quality

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MIRACLE-EAR COMPANY BUSINESS PLAN
of hearing aids (Picou, Ricketts, & Hornsby 2013). Therefore, hearing aid companies have been
working towards making their products smaller and more discrete. Hearing aids can now connect
with phones, tablets, and even televisions wirelessly. The most recent and advanced hearing aids
are those that are able to learn from the preferences of the user in different environments and even
adjust automatically (Picou, Ricketts, & Hornsby 2013). Such current models include ReSound
LiNX2 (Picou, Ricketts, & Hornsby 2013). All the innovations are aimed at attracting new and
younger purchasers.
Legislative regulation of the hearing aid manufacturing industry
Hearing aids fall under class I and II medical devices and are therefore strictly regulated
by FDA (Itasca, 2004). FDA defines a hearing aid as a device that is supposed to compensate for
the impairment of hearing.
Factors
Numerous companies have tried to venture into the hearing aid manufacturing industry but
have failed. Such companies include Panasonic, 3M, and Bausch & Lomb (Itasca, 2004). The
primary factors that lead to dissolution and obsolescence of the hearing aid manufacturing
companies are:


The regulation of the sale of hearing aids at the state level.



Low market penetration rates.



Failure to include hearing aids in insurance plans.
The state is responsible for licensing audiologists and individuals who have specialized in

hearing instruments. The hearing specialist and audiologist are collectively called dispensers; the
consolidation of a number of distributors and the alliances formed between hearing companies and

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MIRACLE-EAR COMPANY BUSINESS PLAN
dispensers limit the number of brands that can be offered to the patients (Itasca, 2004). As a result,
a huge barrier is posed to the entry of new hearing aid manufacturers. In addition, low market
penetration rates make it difficult for companies to venture into and last in the hearing industry
(Parker, P. M. & Parker 2006). The difficulty in penetrating the market hinges on two issues which
are the high price of the hearing aids and the social stigma that comes with use of the aids (Picou,
Ricketts, & Hornsby 2013). In addition, the high price of the hearing aids, the insurance plans does
not cover most of them hence making it a bigger barrier to the longevity of companies. Sonitus
Medical came up with a hearing aid called Soundbite hearing system. The device was a
masterpiece for it was recognized as the world’s first hearing device that allows for conduction of
sound via teeth (Picou, Ricketts, & Hornsby 2013). The product was cleared by FDA. CMS,
however, failed to cover for the device, deeming it a...


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