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Running head: PROBLEM SOLUTION: LESTER ELECTRONICS
Problem Solution: Lester Electronics
Problem Solution: Lester Electronics
"Change is inevitable. Change is constant," (QuoteDB, 2007). This quote from Benjamin Disraeli, although stated in the mid-1800's should be the mantra for today's business environment. Modern business operates at the speed of the electron ? over the Internet and on a 24-hour basis. Companies which wish to survive and expand beyond extremely local environments must realize that change will be constant and learn to adapt.
Lester Electronics, Inc. (LEI) is a firm in danger. LEI is facing two threats which could have an effect upon its viability. One of them, absorption by the larger, global firm Avral Electronics, S.A., would end its existence, while the other ? the absorption of one of LEI's major suppliers (Shang-wa Electronics) by another manufacturer and distributor ? Transnational Electronics Corporation (TEC) ? would remove an extremely profitable sole-source distribution deal and result in an estimated loss of 48% of the firm's business. Obviously, the board of directors of LEI had to take action.
In addition to the above, LEI is determined to expand to a global market. To change from a regional to a global firm, the firm realizes that it needs outside knowledge, which is available from Shang-wa Electronics. Knowing this, the board was faced with making one of two decisions ? either allow absorption by the Avral Electronics corporate enterprise or merge with Shang-wa Electronics ? forming a larger, global firm whose synergy would ensure survival. The decision of the board was ? not surprisingly ? to merge with Shang-wa Electronics.
Situation Ana ...