Investment Alternative Benchmarking

Investment Alternative Benchmarking



Investment Alternative Benchmarking

Int roduction

The Lester Electronics classroom scenario allows one to identify several issues that directly connect to the basic concepts of corporate finance. The following is a comparative analysis of corporations who have faced similar issues and dilemmas to that of Lester Electronics, and the synopses of the manner in which the concern was managed. This analysis will provide the reader, as well as the executives of Lester, with a source of alternatives with which to proceed.

Boeing - Anthony Capone

There is a conceptual parallel between our class scenario of Lester Electronics, Inc. and an analysis of The Boeing Company. Boeing, of course, is the major American manufacturer of jet planes in the world, thus having a diverse array of assets, liabilities, and issues. The parallel comes in the form of financial growth opportunities.

A wholly owned subsidiary of The Boeing Company is the Boeing Capital Corporation. “Boeing Capital Corporation is a global provider of innovative financing solutions. Its primary mission is to support the other Boeing business units by arranging, structuring and/or providing financing to assist in the sale and delivery of Boeing products and services.” (www.boeing.com) The most recent concern for Boeing, and the airline industry, is the surging cost of fuels and resources. Boeing's innovative strategies have created the opportunity to maintain profitability, and even increase profit in some sectors. “The Boeing Company has incorporated financial services as a key element of its strategy.” (www.boeing.com)

The aviation business is under fierce attack from some environmentalists as a despoiler of the planet by spewing carbon dioxide into the air. Boeing has responded by using a weeklong air show as a platform to press the message that it is not only striving to be green but is making great progress. “Boeing is pushing so-called "second-generation bio-fuels" as a potential power source for jets that could transform the environmental impact of aviation.” (seattletimes.nwsource.com) Boeing has capitalized on a growth opportunity by developing a bio-fuel made from the byproduct of algae. The creation of this innovative technology advancement has brought positive press to The Boeing Company, increased stock values by almost 34%, and an increase in manufacturing orders.

After a three-year boom in sales, the U.S. plane maker has 3,661 aircraft in its order book, worth more than $270 billion at list prices, to be delivered over the next six years or so. “Boeing Co. said it has signed a deal with Air China for 15 777s and 30 737-800s. The deal is worth $6.3 billion at list prices.” (bizjournals.com)

Lester Electronics, Inc., faces the potential growth opportunity of tremendous sales and profit increases with the acquisition of Shang-wa. The scenario depicts a situation in which the decision to acquire Shang-wa is crucial to Lester's solvency. The analysis of Boeing's performance, and future expectations, shows that internal innovation also creates growth opportunities with which to capitalize.

Coca-Cola - Anthony Capone

One of the fundamental concepts of corporate finance is that “…the purpose of the firm is to create value for you, the ...