Running Head: INVESTMENT ALTERNATIVE BENCHMARKING: BERNARD LESTER
Investment Alternative Benchmarking: Bernard Lester
Learning Team A
Eric Culp, Keyasha Davis, Claudia Johnson, Shamari Treadwell, and Tiffany Williams
University of Phoenix
MBA 540
Don Furman, Ph D
October 13, 2008
Investment Alternative Benchmarking: Bernard Lester
Lester Electronic, Inc. and Shang-wa Electronics entered an agreement in which Lester Electronics would sell Shang-wa Electronics’ capacitors in the United States for 65 years on condition that Lester Electronic is able to keep a minimum annual purchase of $1 million wholesale. In addition, Shang-wa agreed not to sell to capacitors to any of Lester’s potential United States competition. However, recently a large manufacturer and distributor of electronics components, Transnational Electronics, have shown interest in acquiring Shang-wa Electronics. This acquisition could greatly impact Lester Electronics, who can possibly lose 43% in revenue over the next five years. Avral Electronics, S.A. has also shown interest that they would like to acquire Lester Electronics. Learning Team A has conducted a benchmark of several companies in order that Bernard Lester can examine his options and make a decision if the company should entered a joint venture or not. These decisions will be based upon internal and external growth, working capital management, cross-border growth, financial statements and ratios, and portfolio management (University of Phoenix, 2006).
Evaluation of Internal and External Growth Strategies
A growth strategy, internal or external, should help a firm to protect and sustain its existing advantages or to develop new advantages. Companies such as Bank of America, Delta, Verizon, Sprint, Intercontinental Hotel, Hilton, General E, and Ford Motor Company all take many indicators and attributes into account when entering into their growth strategies.
Firms can grow in two ways externally, by...