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Running head: GAP ANALYSIS: LESTER ELECTRONICS
Gap Analysis: Lester Electronics
University of Phoenix
MBA 540: Maximizing Shareholder Wealth
March 24, 2008
Gap Analysis: Lester Electronics
Lester Electronics is at a pivotal point of the business. Bernard Lester cannot continue to manage the business as has previously been done due to the changes in the industry and a possible loss of their largest vendor, Shang-wa. John Lin, founder and CEO of Shang-wa, is looking to spend less time with his business and more time with his family. John Lin has informally suggested to Bernard that they partner in a new country that would enable both companies to meet the growing demands for their products. John Lin also feels pressured to sell to another manufacture, Transnational Electronics Corporation (TEC). If Shang-wa does not sell or enter into a joint venture with Lester, Shang-wa will not continue to remain in business because John Lin has not groomed a successor. Lester also feels pressured by Avral Electronics, S.A. to sell the business. Lester must make the decision to partner with Shang-wa so that they are not forced out of business or to be acquired by Arval. Lester’s proposal to create a joint venture with Shang-wa may be the only option that would allow both companies to stay in business.
The Board of Directors has approved the merger and Lester’s financial team needs to develop a plan for the venture to occur. The merger will create opportunities in the world market as Lester expands its boarders into other countries. The company will need to formulate a successful financial plan that optimize the growth opportunities and maximize the shareholder’s wealth.
Situation ...