Opportunities Identified for Sterling’s

OPPORTUNITIES IDENTIFIED FOR STERLING’S:

Product diversification and enrichment:

Sterling’s has high growth opportunities by expanding into the healthcare industry which has potential sustainable growth (Exhibit 6).By expanding to the Montague’s products unit’s capacity, They company gains the economies of scale benefits in research and development and increasing its sales volumes and price which will results in gaining higher profit margins.

Growth in market share:

As one of the opportunities presented to Sterling’s, the business unit to be acquired was different to its previous acquisitions as this was a in an industry which was growing rapidly, the competition was healthy and with minimal risks and none existence of monopolies as no competitor held more than 7% market share. Sterling’s therefore has an opportunity to be a star performer according to the BCG matrix with high growth and high market share.

This is seen in the projected growth in operating cash flows of the business unit given in the Appendix.

Access to global markets

New products diversification plan presents product that are closely related to one of Sterling’s existing and successful product line. Opportunities exists for a vertical and horizontal integrations and access to global markets as this was an American product which was already legally registered by the UPA for the USA market

Operational efficiencies

The property that contained the products unit also had sufficient unused space for expansion. The acquisition presented the potential for sterling to foster growth and improve the overall operational efficiencies and improve on financial performance. Resources can therefore be shared across the business maximising their usage to full capacity.

Opportunities exists for increasing the future earnings of the business which is sustainable.