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Lester Electronic: Investment Alternative Benchmarking

Running head: INVESTMENT ALTERNATIVE BENCHMARKING

Investment Alternative Benchmarking
University of Phoenix
MBA 540
November 26, 2007


Introduction
In this paper will compare and contrast issues that various companies had experienced in simulation to the issues presented in the Lester Electronic Scenario. The companies chosen are Intel Capital, Kodak, Alcoa, Toronto-Dominion Bank, Delphi, General Motors, Southwest Airlines, and SunTrust Bank. One of the issues presented in the scenario is that LEI was preparing to conduct a joint venture with Shang-wa when Transnational Electronics made an offer to acquire Shang-wa. The main issue is that if Shang-wa is acquired by TEC, the joint venture between Shang-wa and LEI will not be possible. LEI intends to remain as the company of choice but this might not be possible if TEC acquires Shang-wa or if LEI acquires Shang-wa. Some of the concepts that Team A will evaluate considering the LEI scenario issues are: capital management strategies to maximize shareholder wealth, economic exposure, the challenges of cross-border growth strategies, working capital management, and internal and external growth strategies.

Working Capital Management Strategies to Maximize Shareholder Wealth
CFOs are constantly faced with new challenges in managing their working capital. Companies are taking twice as long to convert their working capital into cash. What is more, instead of relying on cash from efficient working capital, companies are turning to banks to ask for immediate credit lines instead of planning to improve cash flow (JP Morgan Chase). Working capital management is an important yardstick to measure a company operational and financial efficiency. This aspect must form part of the company’s strategic and operational thinking. Efforts should constantly be made to improve the working capital position. This will yield greater efficiencies and improve customer satisfaction (Gordon, 2006). The essence of effective...