Lester Electronics Marketing and Gap Analysis

Lester Electronics Marketing and Gap Analysis

  • Submitted By: eodwife
  • Date Submitted: 03/11/2009 12:22 PM
  • Category: Business
  • Words: 2629
  • Page: 11
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Gap Analysis: Lester Electronics
Teresa Baran
University of Phoenix

Gap Analysis: Lester Electronics
Lester Electronics (LEI) is an industrial electronics parts master distributor. Marketing products to small and medium size manufacturers, LEI has become a successful company with revenues of $500 million annually. Shang-Wa electronics (SWE) a manufacturer of capacitors, entered into a distribution contract with LEI to market in the United States. SWE has a well established business in Korea. Both companies agreed upon a contract that allows LEI to sell SWE capacitors in the United States, however, SWE cannot knowingly sell capacitors to any other company that intends to sell in the United States. LEI has never had the opportunity to market domestic made parts outside of the U.S. With the industry changing, the threat of a hostile takeover is imminent. LEI and SWE have agreed to merge with LEI acquiring SWE. This opportunity affords both companies the chance to expand into global markets, increase cash flow and prevent a hostile takeover. This move will provide LEI/SWE with an opportunity to acquire other like businesses and become an industry leader.
Situation Analysis
Issue and Opportunity Identification
LEI is looking for expansion into a global market. “Economic exposure can be defined as the extent to which the value of the firm would be affected by unanticipated changes in exchange rates. Any anticipated changes in exchange rates would have been already discounted and reflected in the firm’s value. (Eun-Resnick, 2004) Understanding economic exposure
may be a financial incentive, one must determine how exchange rates will affect the financial prospectus. If exchange rates are lower than the American dollar, businesses can get more for the money but if exchange rates are higher, less capital will be evident. Incorporating this economic exposure, into balance sheets and cash flow accounts will...

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