Gap Analysis: Lester Electronics
In today’s markets mergers and acquisitions are increasing, causing an increase in value to organizations. “A merger refers to the absorption of one firm by another. The acquiring firm retains its name and its identity, and it acquires all of the assets and liabilities of the acquired firm. After a merger, the acquired firm ceases to exist as a separate business entity” (Ross, Westerfield & Jaffe, 2005, p.797). Oftentimes, mergers are clean and friendly while other times acquisitions occur after a board has rejected an offer. Before entering into an acquisition, organizations have to create a plan that will solve any challenges that may occur. Improper planning could cause devastation to both organizations involved in the acquisition. Lester Electronics Inc., is currently going through a similar situation in its current market. This paper will identify an analysis of the situation, any issues and opportunities, the stakeholders, an end state vision and a gap analysis of the situation.
Issue and Opportunity Identification
Lester Electronics Inc. (LEI) is a consumer and industrial maker of electronic parts, which are primarily sold to small, and medium sized equipment manufacturers, repair facilities and local distributors in the United States and Europe (University of Phoenix, 2008). LEI decided to enter into an agreement with Shang-wa Electronics, which is a small Korean organization. This agreement would allow LEI to sell Shang-wa capacitors in the United States (University of Phoenix, 2008). The agreement will go forward if LEI purchases at least $1 million in products annually (University of Phoenix, 2008). The Chief Executive Officers of both organizations, John Lin and Bernard Lester, have built organizations that have a long history of success. Recently, both organizations have been approached with acquisitions offers, which require immediate action from both parties.