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Problem Solution: Lester Electronics
The first step in problem solution is to identify the potential solution. Lester Electronics should model their solution on what their competitors have done and what is currently working for their company. The problem that Lester Electronics is facing is generic to the company and is not specific to the industry of electronics. Lester Electronics would like to merge with Shang-wa while providing the maximum wealth for Lester’s shareholders through optimal alternatives. Shang-wa and Lester Electronics have an exclusive distribution contract with each other and for 35 years it has served the both of them well. Therefore, now is the time to look into the future for better opportunities of growth. Consequently it comes at a time where John Lin, the CEO of Shang-wa is looking for a successor for his company so that he can retire.
Situation Analysis
Issue and Opportunity Identification
The issues and opportunities that are being faced are quite numerous; however, there are several that bring about an immediate concept to be discussed. To begin, John Lin and Bernard Lester both reside on the LEI Board of Directors. This situation poses and ethical issue, but also positions them for a more concrete opportunity for a joint venture. Secondly, Shang-wa is Lester’s primary supplier for the U.S. market. The issue here is the loss of revenue for Lester if he loses Shang-wa, therefore, enabling Shang-wa to have a bit of leverage to negotiate. Thirdly, the issue of a merger leads to the opportunity to improve growth opportunities locally and globally. Acquisition is another issue that lends back to the issue of being the ...