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Running head: GAP ANALYSIS: LESTER ELECTRONICS
Gap Analysis: Lester Electronics
Jim
University of Phoenix
MBA 540
Maximizing Shareholder Wealth
April 9, 2007
Gap Analysis: Lester Electronics
The stockholders own the company and elect the board of directors, who then appoint the management team. Management, in turn, is supposed to operate in the best interests of the stockholders. One goal of the management is to make decisions that will maximize the value of the stock, including dividends. As the CEO's of Lester Electronics and Shang-Wa Electronics, Bernard Lester and John Lin are faced with making the decision to merge so they are not forced into a hostile takeover. With the merger also come many opportunities for them as they capitalize from the strengths and weaknesses of each other. As they combine the two companies they will have an opportunity to develop a financial plan that will allow them to forecast their financial future. As they are reviewing each other's balance and income statements they will be able to determine the viability of pursuing leasing equipment.
Situation Analysis
Issue and Opportunity Identification
Lester Electronics, Inc. (LEI) is an electronics parts master distributor, marketing its products to small- and medium-sized original equipment manufacturers (OEMs), repair facilities and small local distributors throughout the Americas and Europe. LEI has had an exclusive distribution contract with Shang-Wa Electronics for the United States. This agreement has served both companies very well. LEI and Shang-Wa have proven that they can meet the growing demands of the market and now both CEO's have been approached by other companies wis ...