Running head: GAP ANALYSIS: LESTER ELECTRONICS
Gap Analysis: Lester Electronics
University of Phoenix
Gap Analysis: Lester Electronics
Lester Electronics, Inc (LEI) has finally reached its decision: to merge with its long-term supplier Shang-Wa Electronics (University of Phoenix, 2008). To formulate a successful growth strategy, a company must carefully analyze its strengths and weaknesses, now to deliver value to customers, and what growth strategies its culture can effectively support.
With the completion of the merger LEI and Shang-Wa will establish a combined financial and corporate initiative that would include maximizing shareholders value simultaneously meeting the needs of customers, suppliers and employees. The Board of Directors has approved the merger and Lester's financial team needs to develop a plan for the venture to occur.
The financial team of LEI and SE will evaluate the company's cash flows to decide if they have enough money to merge with incurring any debt (Ross, Westerfield, & Jaffe, 2005).
To increase funds with out an impact on the financial statements is difficult (Ross, Westerfield, & Jaffe, 2005). Announcing the merge will allow the combination of assets to be used as a financial lever for increase funding availability and to show the firms true value (Ross, Westerfield, & Jaffe, 2005).
Transaction exposure includes the sensitivity of the realized domestic currency values of the firms' contractual cash flows denominated in foreign currencies to unexpected exchange rate changes (Ross,Westerfield, & Jaffe, 2005). With a completed merger, the internal cost effectiveness with the supplier being with the distributor has been proven to cut cost by ...