Lester Electronics Inc (LEI) was started by Bernard Lester with annual revenue of $500 million. As a consumer and industrial electronics parts master distributor, Lester markets its products to small- and medium-sized original equipment manufacturers (OEMs), repair facilities and small local distributors throughout the Americas and Europe. To date, however, Lester has never marketed domestic-made parts outside of the United States. Operating in this way, the company’s revenues approximate $500 million a year (Scenario One, 2008).
The company has a contract with a Korean based company, Shang-wa Electronics, since 1978 which provides LEI with exclusive distribution and sales of capacitors. The contract requires an annual review and renewal. Both companies have shared the financial standings with each other during the time of renewal to maintain stability in both markets. Recently however, Shang-wa has been approached by Transnational Electronics Corporation (TEC). TEC has recognized the growing domestic demand for the specialty capacitors that Shang-wa manufacturers. With the potential loss of 43% of total revenue for LEI in case Shang Wa’s contract is not renewed called for a strategic move from Bernard Lester. LEI now will be working on acquiring and merging with Shang Wa (Scenario Two, 2008). The team has analyzed companies like PepsiCo, CVS, and Callaway Golf and so on to help learn about possible merger consequences.
CVS/Caremark Rx – Rachel Bortle
CVS operates more than 6,200 retail and specialty pharmacy stores in 43 states and the District of Columbia making the retail pharmacy firm the largest in America (Caremark Shareholders, 2007). CVS and Caremark companies began legal merger agreement which will create the nation’s premier integrated pharmacy service provider. Caremark is a leading pharmaceutical service company and CVS is the largest pharmacy chain (CVS & Caremark, 2006). In December of 2006, Express...