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Investment Alternatives: Lester Electronics

Investment Alternatives: Lester Electronics
University of Phoenix

Investment Alternatives: Lester Electronics
“According to Business Week and the Boston Consulting Group, shareholders lost money in 61 percent of 302 major mergers that occurred between 1995 and 2001. Companies who paid for their acquisitions solely with stock showed the worst results” (IOMA Financial News, 2002). Strategic due diligence is required by companies acquiring other companies to identify and test value levers prior to merger deals signing to make the transaction a success. Team B research will review issues of evaluating internal and external growth strategies, describe working capital management to maximize shareholder wealth, describe challenges of cross-border strategies, access organizational performance and describe the role of portfolio management in allocation of corporate resources.
Evaluate internal and external growth strategies
Internal growth strategies rely on actions such as hiring more employees, increasing the customer base, opening new company locations and or development of new products through research and development within the corporation. External growth strategies rely on meeting growth objectives by establishing relationships with third parties. (Chapter 3) Both internal and external growth strategies contribute toward maximizing shareholder wealth. Lester Electronic marketing of domestic parts within the United States and becoming a public traded has been profitable for Lester’s internal growth. John and Bernard’s experience and talent will contribute also to internal growth of company.
LEI decision to merge with Shang-Wa will help to increase Lester’s external growth because this will help Lester and Shang-Wa ability to expand globally and would help increase their revenue along with meeting the growing domestic demand for their products.
Describing working capital management to maximize shareholder wealth
Working capital management is often...