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Problem Solution: Lester Electronics Inc.
Lester Electronics, Inc. (LEI) was founded in 1978, and it is a small electronics company that distributes electronic parts to repair facilities, small local distributors, and two large domestic manufacturers that use capacitors in both consumer and industrial products. The company entered into an exclusive agreement to distribute Shang-wa Electronics (SE), a capacitor manufacturer, in 1978. The contract has to be renewed annually by both parties with a minimum order of one million dollars per year. This paper discusses some of the issues, opportunities, goals, and vision of LEI that will help the company to maintain and increase its revenues.
Describe the Situation
Issue and Opportunity Identification
Lester Electronics, Inc. (LEI), a small Korean manufacturer of capacitors, is faced with several challenges and opportunities that will make or break the company's future. The researcher will focus on the most important issues and the opportunities that will bring LEI to achieve its financial prosperity in the capacitors market.
The primary issue facing LEI is to merge with SE or to be acquired by Avral Electronics (AE). Currently LEI and SE have a partnership. According to Westfield, and Jaffe (2005), a partnership is "Any two or more persons can get together and form a partnership. Partnerships fall into two categories: (1) general partnerships and (2) limited partnerships" (p. 16). SE is Lester Electronics' largest supplier, accounting for the manufacturing of 43% of their products (Lester Information Sheet). The partnership keeps the company's revenue increasing, allowing LEI to become the only distributor of SE capacitors in the USA.
By L ...