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Problem Solution: Lester Electronics
As with many high tech industries, the world of electronics is becoming more and more competitive. Companies are looking to form mergers to expand in the market. This has brought a challenge to Lester Electronics to find new ways to keep one step ahead of the competition. Lester Electronics could lose a very important contract with Shang-wa, if a hostile takeover were to occur by Transnational Electronics Corporation. Lester Electronics is now looking at various ways of cut their costs, and advancing their standing within the industry. Lester Electronics’ management members have created a financial plan that will hopefully put Lester Electronics on the front line of the industry. The organization must act quickly to prevent the company from losing any profits and maximizing shareholder wealth.
Situation Analysis
Issue and Opportunity Identification
Lester Electronics and Shang-wa have an established relationship. Neither wants to be the victim of a hostile takeover. With this becoming more of a possibility, they have begun to consider a partnership. In a general partnership all partners agree to provide some fraction of the work and cash and to share the profits and losses. Each partner is liable for the debts of the partnership. The partnership agreement may be an oral agreement or a formal document setting forth the understanding. Limited partnerships permit the liability of some of the partners to be limited to the amount of cash each has contributed to the partnership. Limited partnerships do not usually require that (1) at least one partner be a general partner and (2) the limited partners do not participate in managing the b ...