Mba6060 Management Competencies and Current Perspective

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  • Topic: Venture capital, Private equity, Private equity firm
  • Pages : 2 (465 words )
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  • Published : February 21, 2013
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MBA6060 Management Competencies and Current Perspectives Course Evaluation Your course grade will be based on two individual essays, each contributing 50% to your grade. The essays are due 25 September “preterm@baf.msmail.cuhk.edu.hk”. 2012 via email attachment sent to

Essay 1 (Maximum length 1200 words) A US-based private equity firm is considering an investment of US$100 million (a 35% stake) in a privately-owned timber flooring company in China. The Chinese company's major assets include: i) seven factories in China that produce timber flooring; and ii) three sizeable timber plantations - two in China and one in Guatemala. The company sources 50% of its timber requirements from suppliers globally. It is currently one of the top five timber flooring companies in China (90% of sales are domestic), and has started to aggressively enter new markets; exports are currently 10% of sales and growing. It has targeted North America, Europe, Australia, Japan and other high-income countries for rapid expansion. Its product is high quality and cost competitive. The timber flooring company has grown quickly (it is less than 15 years old), has a small team of local managers (around 30 in total, mostly in sourcing timber, production, R&D and sales and marketing), and has focussed on growing sales. Although managers understand how to sell flooring in new markets, they have little to no understanding of issues outside of production, marketing, and sales. CSR is not understood at all. The PE firm has a timeline of 3-4 years to take the timber flooring company to market, with a target IPO in Hong Kong. Required: Assess the key CSR issues that may arise in this investment and provide an executive summary of those issues for the private equity firm involved. You should pay particular attention to social and environmental issues that may pose a risk to the investor. The PE firm has confirmed that the growth outlook is good; but are there any strategic issues beyond financial...
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