Problem Solution: Lester Electronics
Lester Electronics, Inc. is an industrial electronics parts master distributor company that markets its products to small and medium size equipment manufactures, repair facilities, and distributors. It is the goal of the leadership of Lester Electronics for the company to be a leader in the industry not only in the US but also globally. The company’s revenues and global experience limits its position in the market.
The initial issue the company faces is the suggested takeover by Avral Electronics. The suggestion of the take over lead Lester Electronics to consider a merger with Shang-wa Electronics, a small Korean manufacturer of capacitors that has exclusive distribution in the United States. The merger can be the first step leading to Lester Electronics becoming a leader in the industry. This paper will discuss the issues, goals, solutions and alternatives for Lester Electronics.
Issue and Opportunity Identification
Lester Electronics has mergers and acquisitions coming at them from all sides. They have options to either merge with a longtime friend and manufacturer, Shang-wa Electronics, they can get bought out by another firm, and the possibility of Shang-wa Electronics being the victim of a hostile takeover lingers as well. In trying to ferret out the next best move, financial situations must be considered; if they were to focus on expansion with their trusted friend and colleague then they must decide if the cost to expand internationally is worth the effort.
The specific issues facing Lester Electronics include the growth strategy, the need for corporate long-term financing to support the merger and continue to gain profits, the need to maximize working capital, and the question of net present value of Shang-wa, is it enough to acquire the company and benefit the shareholders.
Lester Electronics must develop a strategic plan for growth, internally and externally. Growth...