Benchmarking
Investment Alternative Benchmarking for Bernard Lester
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, 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 growing demand 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 to oversee the business. To help determine the best alternative for the company, Bernard Lester has chosen to benchmark other companies who have demonstrated successful mergers.
The merger between FedEx and Kinko’s was a surprise to many but just as Shang-wa Electronics from our class scenario was looking for growth opportunities so was FedEx. The company was the top overnight service provider in the United States for years. The opportunity to acquire the successful document copy store presented itself FedEx couldn’t help but purchase Kinko’s for 2.4 billion dollar cash deal. Both companies were looking for growth opportunities.
Prior to the merger the two companies were already doing business together. “FedEx operated full-service counters at 134 of Kinko’s 1,200 stores and had been Kinko’s exclusive shipper since 1988” (Kawamoto, 2003). Each company knew what the other was capable of and the acquisition would provide them both with the leverage needed to stay ahead of their competition. FedEx was looking to continue to make trouble for DHL and UPS while Kinko’s was looking to continue offer net...
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