University of PhoenixBuilding relationships is often the key to increasing business productivity. Long-term company relationships can lead to cost effective manufacturing, productive servicing techniques and increase global revenues. Lester Electronics, Inc. (LEI) began an industrious relationship with a Korean manufacturer called Shang-wa Electronics. Together since 1978, the two companies have made excellent strides in delivering a product line to domestic consumers. LEI focus its delivery model to small and medium size original equipment manufactures (Scenario, 2006). Chief Executive Officers (CEO) of both Shang-wa and Lester Electronics are now faced with dilemma of a changing industrial environment. Competition has grown and decisions must be made on from both companies as to which way the corporations will be headed.
Situation AnalysisIssue and Opportunity IdentificationLEI and AvralRevenues of $500 million dollar have proven LEI to be a strong company. Companies of such stature are often looked upon as a growth opportunity for other companies.
Avral Electronics, S.A. recognizes the importance of what LEI bring to the industrial community. Avral needs to fill the void on its manufacturing end. Acquiring LEI will fulfill this need and can take the company to new heights.
LEI, Avral and Shang-waLester Electronics growth and stamina in the industrial community has been built with the relationship with Shang-wa. Ignoring this factor can be detrimental to the continue success of LEI. LEI and Shang-wa has had an exclusive contract for over 20 years. The contract must be renewed annually and has been done so without any hiccups. Jon Lin the founder ofShang-wa now sits as a visiting board member at Lester Electronics. Continue growth at Lester is depended upon the continued relationship with Shang-wa. If Avral is to pursue LEI,Shang-wa must be part of the package.
TEC & Shang-waTransnational Electronic Corporation (TEC) interest in Shang-wa is extending greatly...