Problem Solution: Lester Electronics
In this paper the issues and opportunities of Lester Electronics and Shang-wa are discussed in relation to the proposed takeovers. The important players in the scenario are identified and explain. Information provided as to the intentions of the companies and whom they want to acquire is included. An end state vision and a problem statement are proposed for Lester Electronics and how they are going to get there. The alternative and optimal solutions are discussed and looked at in depth of explanation. A plan is put into place for the combination of both companies to show how the end state vision will be realized.
Situation Analysis
Issue and Opportunity Identification
Lester Electronics is a company that was founded in 1978 based on the agreement Bernard Lester entered into with John Lin of Shang-wa Electronics. This partnership was set for 65 years as long as LEI were to purchase $1 million in wholesale. Each year though this partnership is to be evaluated and renewed annually, for the last 35 years this agreement has worked out and there has grown to be a deep friendship between John Lin and Bernard Lester. John Lin had mentioned before that he would be interested in having Lester Electronics join the ventures and eventually have LEI purchase Shang-wa. LEI were not sure if they have or would have the capital for an investment of that magnitude. In the mean time both LEI and Shang-wa have gotten takeover proposals, this is not the road that either John or Bernard wants to go down. This has gotten Bernard Lester to summon his CFO to put together a joint capital budget, from all three of the term sheet received from Avral/Lester proposal and the TEC/Shang-wa proposal. The opportunity for Bernard and John to join forces and companies is a important move to secure a place in the market and save both companies.
Stakeholder Perspectives/Ethical Dilemmas
The stakeholders in this scenario have a great deal more to lose then...