...opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to the investment community. Sterling’s financial measures for all recent years showed that the company was successful, but a time series analysis of these same financial measures quickly isolated Sterling’s current challenge: growth rates for unit volume, sales, and profits were very low, and company management was looking to expand into businesses and products with more potential for growth. Sterling had identified health care as an industry with more growth potential, and a detailed search for health care products which could fit well into the company’s existing operations led to discussions between Sterling and Montagne Medical Instruments Company. Sterling was interested in acquiring Montagne Medical’s germicidal, sanitation, and antiseptic products unit, and Montagne Medical was willing to sell the unit for the right price. Negotiations had revealed that Montagne Medical believed the right price was $265 million, so Sterling had to determine if acquiring the...
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...articulate, concise, and theoretically sound answer. Answers need to be supported with examples from the texts and Exhibits. This may require some due diligence on your part. Please retype the question and your response. 1. How much business risk is associated with Sterling’s proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical? Be sure to define business risk in your answer. 2. Verify the growth rates for sales and inflation (cost of goods sold, CGS) that are described in the case. This can be calculated from the income statement (Exhibit 1). An excel sheet containing the information described in the case can be found on Blackboard. What is the formula for finding the average compounded growth rate? 3. Find the growth rates for the rest of the items on the Income Statement and Balance sheet. Use Sparklines to provide a graphical representation of the trend. 4. Describe why Net Income for Sterling has decreased from 2010 to 2012. 5. Describe the five categories of financial ratios. Create a new tab, ‘Financial Ratios’, and calculate the following ratios for Sterling: Liquidity | Solvency | Asset Management | Profitability | Market Value | Current | Total Debt | Inventory Turnover | Profit Margin | EPS | Quick (Acid Test) | Times Interest Earned (TIE) | Days’ sales in Inventory | EBITDA Margin | PE | Cash | Cash Coverage | Receivables Turnover | ROA | Market-to-Book | | | Days’ sales in receivables...
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...30, 2013 WILLIAM E. FRUHAN CRAIG STEPHENSON Sterling Household Products Company January of 2013 brought a new year and an important new opportunity to the management team of Sterling Household Products Company. Sterling manufactured and marketed a wide line of consumer goods, including laundry products, soaps, cosmetics, toilet preparations, and cleaning, disinfecting and sanitizing products, which were sold domestically and internationally, and were used every day in millions of households around the world. Sterling’s family of quality products included many highly regarded brand names, and the company had consistently delivered impressive sales and profits to the investment community. Sterling’s financial measures for all recent years showed that the company was successful, but a time series analysis of these same financial measures quickly isolated Sterling’s current challenge: growth rates for unit volume, sales, and profits were very low, and company management was looking to expand into businesses and products with more potential for growth. Sterling had identified health care as an industry with more growth potential, and a detailed search for health care products which could fit well into the company’s existing operations led to discussions between Sterling and Montagne Medical Instruments Company. Sterling was interested in acquiring Montagne Medical’s germicidal, sanitation, and antiseptic products unit, and Montagne Medical was willing to sell the...
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...Sterling Household Products Company is a leading manufacturer and marketer of a wide range of customer product that include laundry products, soaps, toilet preparations, cosmetic, cleaning disinfecting and sanitizing products. Sterling Household Products Company has highly trusted and recognized brand names that result in consistent sales and profit investment community. Despite the fact that the company has achieved constant growth in the sales and profit, but analysis of financial measures shows that the growth rates for the unit volume, sales and profit are very slow. Therefore, the company wants to expand into businesses and products with more potential growth. Sterling Household Products Company identified Health Care as a more potential sector and find out one unit of the Montagne Medical Instruments Company to be the best fit into company’s existing operations. Sterling Household Products Company negotiation with the Montagne Medical Instruments Company result in the $265 million as a right price for the acquisition. The Sterling Household Products Company case has four primary learning objectives: 1.To illustrate a situation where one company is acquiring a products unit in a completely different industry. In such a transaction, the risk and required rate of return for the target is different from that of the acquirer; the acquirer’s existing cost of capital cannot be used to value the target, and students should recognize this fact. 2.To present financial information...
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...Sterling Household Products Company Case Note Adapted from Harvard Business School Sterling Household Products Company (Sterling) is a comprehensive investment analysis case that requires students to consider a broad range of quantitative and qualitative issues in evaluating a significant strategic acquisition. Suggested Questions and Analyses: 1) Determine the risk associated with the proposed acquisition of the germicidal, sanitation, and antiseptic products unit of Montagne Medical Instruments Company (Montagne). Discuss the inputs and assumptions that underlie your calculations. a) What is the cost of equity capital appropriate for evaluating the free cash flows associated with this investment? b) What is the correct capital structure and weighted average cost of capital to use in discounting the investment’s free cash flows? 2) Determine the value of the base case acquisition opportunity. Discuss the inputs and assumptions that underlie your calculations. b) What are the amounts and timing of the investment’s free cash flows from 2013 through 2022? b) What is the terminal value of the final 10 years of the acquisition, as of 2022? c) What is the net present value of this base investment? 3) Determine the value of the follow-up expansion investment opportunity. Discuss the inputs and assumptions that underlie your calculations. c) What are the amounts and timing of the expansion investment’s free cash flows from 2013...
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...accounted for around 70% of the stock of lending to businesses, 75% of the stock of mortgage lending, and 50% of the stock of consumer credit (excluding student loans) at end-December 2014. The report also draws on intelligence gathered by the Bank’s network of Agents and from market contacts, as well as the results of other surveys including the Bank of England’s Bank Liabilities Survey and Credit Conditions Survey.(3) The focus of the report is on lending, but broader credit market developments, such as those relating to capital market issuance, are discussed where relevant. The report covers data and intelligence gathered up to end-March 2015. Unless stated otherwise, the data reported cover lending in both sterling and foreign currency, expressed in sterling. Integration of the Credit Conditions Survey, Bank Liabilities Survey and Trends in Lending The Credit Conditions Survey (CCS) and the Bank Liabilities Survey (BLS) improve the Bank’s understanding of developments in banks’ liabilities and credit conditions. The...
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...WAHINGTON D.C. CAMPUS APRIL 19, 2011 This research plan was made to support introducing the product and service of Dewi Sitha for its business in Silver Jewelry. Dewi Sitha is based in Indonesia and has been in business since 1970. This company is still growing especially in these days where the price of gold is very high. The silver jewelry business is low on cost and high in margin. The retail markup on silver jewelry products is about three to four times the production cost, meaning if cost to produce it is $8 then retailers will sell it for $30. This research paper has three goals: • To identify the Market segment in jewelry business • To discuss the target market for the company. • To conduct SWOT analysis for the better future of the company. • To know the market position of the company’s product and services. Identify the marketing segment for the product and explain why this segment was selected Market segmentation can be defined as the process through which people (both retailers and customers) with similar needs, wants and characteristics are grouped together, so that a jewelry business can use greater precision in serving and communicating with these groups (marketing). When attempting to segment the market for silver jewelry in the jewelry industry, we used demographic (income, age, gender, household composition) and physiological segmentation that we learned in class. According to the well respected...
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...herbal supplements (Holland and Barrett, 2013). The Melwani Group is a family run business, which represents and markets leading brands like Aigner, Aldo, Levis, Celio, Adidas Kids and many distinctive household brands (Jay Gee Melwani Group, 2013). The company brought Holland & Barrett to the Singapore retail scene and to date, they have 22 outlets (Holland and Barrett, 2013). 3.0 SWOT Analysis We will be adopting the SWOT model of analysis, looking at the strengths, weaknesses, opportunities and threats this business franchise maybe facing, so as to evaluate what are the possible internal and external environments that could affect the business. SWOT is widely used by companies when it comes to strategies planning (Coman, Ronen, 2009, p.1). It is a tool used by management to identify the strengths and weaknesses of a company within the internal environment, as well as opportunities and threats in the external environment (Kotler, P., Keller, K. L., Ang, S. H., Leong, S. M., & Tan, C. T., 2009). Page 1 of 12 SWOT Analysis as followed: Strengths Excellent customer service Strong product branding Membership card Innovation promotion campaigns Socially responsible Opportunities Level of Education Collaboration with companies to promote the products. Secure retail spaces with upcoming hospitals and polyclinics....
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...A short history on the economic background of the country United Kingdom is a very old country consists of England, Scotland, Wales and Northern Ireland. In the 18th century, the UK was among the first country in the world to industrialize and during the next century it became one of the dominating countries in the global economy. (Martinez, 2013) In the turn of the century, the UK remains among the great economies of the world trailing behind the US and some European countries. In recent times, the UK service sector makes up the bulk of its GDP with London and Edinburgh as among the biggest and busiest financial centers in the world. Being an old country, UK is bursting with historic monuments, royal palaces museums and some of the world’s cherished heritage sites (UNESCO). Tourism is among the important income generating sectors in its economy with millions of tourist visiting the country from around the world making it a UK £127 billion a year industry and provides employment for about 3 million people ("Britain's tourism industry,”). The United Kingdom’s economic freedom has reached a score of 74.8, making its economy the 14th freest according to the 2013 Index of free economies. It scored 0.7 point higher than its last year’s ranking and reflects efforts to improve the control of government spending. In regional terms, the U.K. is graded 5th in the Europe region. (Kim, Miller , Holmes & Roberts, 2012). Image source: Berkshire - Reading Market Place showing Salmons...
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...of the British Pound. As will be explained in this paper, many different factors caused downward pressure to be placed on the currency. Expected changes in the political structure of Britain causes some to feel unwavering about the future, especially when the current monetary and fiscal policies are not resulting in a positive outlook for the economy and especially the vale of the currency. Supply and demand for the currency will change as the currency appreciates and depreciates due to the country’s varying stages of surplus’ and deficits. These and other economic forces will be developed throughout the paper to analyze and interpret how the British Pound has changed over the first couple of months in 2013. Historical The pound sterling, commonly known as the pound (GBP), is the official currency of the United Kingdom. It is the oldest currency still in use as it was created in the Anglo-Saxon period where it was equivalent to one pound of silver (Dawnay, Kit). Over the years, the currency has evolved. In the late 17th century it was unofficially tied to gold and officially tied to gold in the early 19th century but suspended in 1914. By 1940, the GBP was pegged to the U.S. Dollar in the Bretton Woods Agreement. It then entered a free-floating period, a period shadowing the Deutsche Mark, and then a period where...
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...was already living a severe economic recession. A drop in industrial productivity and high levels of unemployment struck the nation after the economic growth of the 1980’s (Table 1 and 2). Table 1 – Unemployment Rate in UK in % Source: Office for National Statistics (UK) Table 2 – Industrial Production in UK: Percentage change year-over-year Source: www.tradingeconomics.com During the prosper economic period of the 1980’s there was strong private investment on household, meaning that the mortgage credit rose significantly. In the beginning of the 1990’s the level of private debt was unbearable (Graph 1). Graph 1 - Debt to income ratio Source: Bank of England High rates of unemployment, high private debt and lack of macroeconomic surveillance tools have been pointed out as the main reasons for the economic recession of the early 1990’s. A sharper control over macroeconomic policies as well as an effective control of inflation and the defense of competitiveness of the sterling within Europe was some of the goals the British government aimed at by joining the ERM. A central exchange rate for each participating currency was established against the ECU, the artificial unit of account that set the pillars for the Euro currency. In practice, the participating currencies where actually pegged to the German mark, which was the most stable currency of the group. Still, there was no existing European central bank. So each national central bank was responsible...
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...qwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmqwertyuiopasdfghjklzxcvbnmrtyuiopasdfghjklzxcvbnmqwer...
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...perspective. This paper discusses the shortcomings which were noticed by manufacturers which initiated a chain of constant innovation and improvement. It also gives useful insights on the evolution of television and its positive/negative impact. Introduction Growth is the only evidence of life (Newman, 2010). This statement holds true not only for life but for other things as well. As people evolved, the things surrounding them also did. It won’t be an exaggeration to say that electronics developed out of proportion; since, every day something new is added to the market. Everything boils down to creating value for the customer, all the research and development done by companies is to understand the need of consumers and create a product or service which caters to their need. (Armstrong, 1996) The extent to which a business organisation goes to know their customers is baffling. Coke actually knows how chilled the Can should be when it comes out of the vending machine, it knows how many people like to have coke with their breakfast. Companies go a long way to understand their consumers so that they can provide value, satisfaction and quality. This paper studies how televisions developed over the years, how the needs and wants of consumers changed and what efforts did companies put in to provide the best to the...
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...TiVo Case Analysis A number of technology-based products have had sterling forecast demands as TiVo had before launching the product with some of them going on to disappoint and others living up to the up when they hit the market. Samsung mobile, in its flagship Galaxy S4Smartphone had initial extremely positive forecast on the demand due to the innovation and efficiency (Costello, 2013). They then went on to experience weakening demand due to supply chain challenges. Apple iPhone in recent years have seen their demand forecast fall short despite investing in landscape-changing innovation compared to its competitors. This is blamed on the saturated high-end smartphone market (Rigby, 2014). During the market research in focus groups conducted by Odyssey Research, consumers were shown how to install and use a TiVo prototype. They were also told the price of the set-top box once it went into the market. Several people in the focus groups raised concerns that TiVo was complicated and time consuming to set up while other felt that the price of the set-top box was too high and that they would wait until the prices fell before buying. The insight on buying process however indicated that husbands would initiate the decision to buy TiVo but they would have to consult the wives with their wives before purchasing a set-top box sue to the high price of TiVo. Participants in the study also showed that the decision to buy the TiVo set-top box would largely depend on references by trusted...
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...technique, in which consumers are able to work as an independent sales representative, selling their favorite jewelry. Our marketing plan will design a product strategy, marketing goals, competitive analysis and different tactics that we will use as a company to achieve a more profitable goal for the upcoming years. With this new marketing plan, we will lay out our budget for the next year to ensure we are utilizing our marketing budget in the best way possible for Stella and Dot. Situational Analysis Stella and Dot is known for their high end, yet very reasonably priced fashion jewelry at home shows. Stella and Dot cliental is primarily woman, since all of Stella and Dot’s jewelry and accessories are for women’s fashion. Stella and Dot have a price range that is reasonable for the working adult that enjoys high quality fashion at a lower cost than shopping at an expensive boutique or store. In today’s business world, finding out who a targeted customer is for a product or how many people in a certain region are going to be your targeted consumer is not difficult. A matter of fact, with psychographic profiling, it is very easy for businesses to find out exactly how many people in certain demographic have the stats that are needed to sell a product. A traditional marketing profile might show someone’s sex, age range and household income, but a psychographic...
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