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Problem Solution: Lester Electronics Problem Solution: Lester Electronics University of Phoenix University of Phoenix Problem Solution: Lester Electronics Lester
Problem Solution: Lester Electronics Problem Solution: Lester Electronics Lester Electronics (LEI) is a consumer and electronics parts master distributor that markets
Problem Solution: Lester Electronics Problem Solution: Lester Electronics MBA 540 University of Phoenix Problem Solution: Lester Electronics Lester Electronics is
Problem Solution: Lester Electronics Running head: PROBLEM SOLUTION: LESTER ELECTRONICS Problem Solution: Lester Electronics University of Phoenix Problem Solution:
Problem Solution: Lester Electronics Problem Solution: Lester Electronics Lester Electronics, Inc. has decided to merge with its long time supplier Shang-Wa Electronics.
Submitted by terry8918 on January 31, 2008
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Running head: PROBLEM SOLUTION: LESTER ELECTRONICS
Problem Solution: Lester Electronics
University of Phoenix
Problem Solution: Lester Electronics
Lester Electronics Inc. (LEI) is currently ranked third among capacitor manufacturers. LEI is a master distributor of electronics parts to the consumer and industrial small and medium sized original equipment manufacturers, repair facilities and small local distributors throughout the Americas and Europe. (University of Phoenix, 2007) Servicing these clients has allowed LEI to see revenues of approximately $500 million a year.
LEI is faced with the decision to align with Shang-wa Electronics to establish a new capacitor manufacturing facility in a neighboring Asian country, acquire Shang-wa outright, or sell the firm to Avral Electronics, Inc., (University of Phoenix, 2007). "The issue translates into an opportunity to increase revenues through sources of synergy revenue enhancement, cost reduction, lower taxes, and lower cost of capital," (Ross, Westerfield, & Jaffe, 2005). Clearly, the firm must study the options carefully and make a decision timely in order to maximize wealth for its shareholders
Situation Analysis
Issue and Opportunity Identification
Lester Electronics does not want to be faced with any losses. Lester is focused on maximizing shareholder wealth anyway possible. The key for Lester Electronics is to develop a joint venture with Shang-wa Electronics quickly. Bernard Lester and John Lin have established a strong friendship over the years. Lester Electronics should consider a limited partnership with Shang-wa CEO John Lin once he retires.
According to Ross, Westerfield, and Jaffe, 2005, "Permit the liability of some of the partners to be limited to the amount of cash each has contributed to the partnership. Limited partnerships usually require that (1) at least one partner be a general partner and (2) the limited...
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