Sonic Healthcare Limited: Case Study

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Sonic Healthcare is one of Australia's largest life science corporations specialising in the creation and distribution of both diagnostic and laboratory medical equipment. The firm was initially listed as a public trading company on the Australian Securities Exchange in 1987, (Sonic Healthcare, 2014). Equipment is distributed to the following suppliers throughout Australia and incorporates both independent and regional healthcare providers, life science research institutions, medical practitioners and specialists and patients undergoing treatment for acute and chronic medical conditions within both public and private hospitals, (Sonic Healthcare, 2014). As of 2014, Sonic Healthcare has catapulted itself to become one of Australia's largest …show more content…

Increasing demand for diagnostic laboratory and medical imaging equipment usage in the research for alternative therapies, innovative pharmaceuticals and treatment involving medical aliments within an ageing population is considered a positive step for Sonic Healthcare Limited as it seeks to become an internationally renowned life sciences corporation in the future, (Sonic Healthcare Limited, 2014, p. 21). Sonic Healthcare Limited will continuously deliver increased earnings, investment returns and revenue, both in the long and short term, that will have tangible benefits for the firm and shareholders, (Sonic Healthcare Limited, 2014, p. …show more content…

Ten of these risks have been identified and will be outlined below in detail.

The first issue highlights foreign exchange risks in the reporting of financial data. Sonic Healthcare Limited reports overall financial data in Australian dollars for domestic purposes. Offshore subsidiaries report their data using their own currency. The application of complex hedging techniques by the firm itself assists in the mitigation of potential foreign exchange risk, (Sonic Healthcare Limited, 2014, p. 21).

The second issue involves the application of management fees. Management fees are used throughout Sonic Healthcare Limited. Domestically, these fees are utilised by government agencies and investment banks. For its international operations, especially in the United Sates of America, Sonic Healthcare Limited relies on insurance brokers. A positive aspect of management fees is that they assist with business growth and increased competition for market share and revenue. Fee reductions occur in the event a company has to minimise costs associated with overheads. Sonic Healthcare Limited overcomes this issue by portfolio diversification, both in terms of financial earnings and geographic location, (Sonic Healthcare Limited, 2014, p.

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