MBA 540 LEI Gap Analysis

MBA 540 LEI Gap Analysis - Gap Analysis Lester Electronics...

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Gap Analysis: Lester Electronics 1 Running head: GAP ANALYSIS: LESTER ELECTRONICS MBA 540 Gap Analysis: Lester Electronics University of Phoenix
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Gap Analysis: Lester Electronics 2 Gap Analysis: Lester Electronics Shang-wa and Lester Electronics, Inc. (LEI) have had a congenial working relationship for many years. Currently, the CEO of Shang-wa, John Lin, is near retirement age and wishes to reduce his work obligations with the company. In order to accomplish this Shang-wa needs to merge with LEI before Avral Electronics or Transactional Electronics attempts a hostile take over. Both companies are interested in securing either LEI or Shang-wa to advance further electronics divisions within either company Shang-wa is looking for growth opportunities, which will allow John Lin the opportunity to reduce his company obligations as CEO (UOP, 2007). Shang-wa is in a position of exposure as Transnational Electronics can over take Shang- wa instead of purchasing the company for fair market value. If this occurs, LEI will lose 43% of the annual revenue generated by the agreement with Shang-wa over a five-year period. The BOD has agreed to move forward with a merger between LEI and Shang-wa. In order to for LEI to obtain long-term success, the company will need to assess financing needs, and identifying medium term financing instruments. A successful alliance has the can give a firm access to markets, technology, and other resources. The new company will be able to better control the market resulting in the ability to increase its market shares and increase its presence in its respective markets. Situation Analysis Issue and Opportunity Identification “Planning is a process that at best helps the firms avoid stumbling into the future backwards.” (Ross, Westerfield, & Jaffee, 2005, p. 45 ). LEI decided to merge with Shang-wa electronics. In order to for LEI to meet with success, consideration into financial planning issues needs addressed. In order for LEI to achieve the desired goals of the company and avoid
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Gap Analysis: Lester Electronics 3 surprises LEI needs to formulate a financial plan. Currently company financials indicate that without several changes LEI will cease to exist in five years. Shang-wa wants to avoid a takeover by LEC while LEI wants to maintain exclusivity with Shang-wa as a key supplier. By merging with Shang-wa, LEI is taking over the current manufacturer of the capacitors sold by LEI. While this will reduce expenses by LEI by obtaining the ability to produce capacitors at a cheaper price a move like this will limit the opportunity for the capacitors sold in other markets. According to Ross, et al., 2005, “In raising short-term and medium-term cash, U.S.
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This note was uploaded on 09/28/2008 for the course MBA mba 540 taught by Professor Unknown during the Spring '08 term at University of Phoenix.

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MBA 540 LEI Gap Analysis - Gap Analysis Lester Electronics...

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