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The case simulates the experience of a private equity investor evaluating a potential investment, requiring the student to: (1) determine the risks and merits of an investment in Toys “R” Us, (2) evaluate the spectrum of returns using multiple operating model scenarios, and (3) identify strategic actions that might be undertaken to improve the risk/return profile of the investment. The case also discusses trends and participants in the private equity industry.

To understand how private equity firms analyze investment opportunities through application of an LBO model (provided in the case) that summarizes returns and risks. Also, to review private equity participation in club deals, large (and early) dividends, and IPOs.

The learning outcomes after reading and analysing this case study are dealing with the challenges of family business; learning the importance of succession planning; accepting the next generation and the role of the first generation; and understanding the decision-making skills and roles of the generations in family business.

Khushboo Pouch and Packaging was the first-generation initiative of Mr Bhavesh Udeshi. Mitesh Udeshi, son of Bhavesh Udeshi and the business’s sole successor, joined the firm in 2019 after graduating with a Master of Business Administration degree. Mitesh had desired to join his family firm since he was a teenager and aid the business with emerging business ideas. As a fresher, he applied his newly acquired theories to the company’s operations. He initiated several changes in the company; however, his actions were ineffective. He introduced modifications to the business premises, production units, marketing tactics, accounting department and product line extension for two years. Mitesh had intended to restructure his traditional firm in rational and innovative ways, but none of his plans had come to fruition. He failed because the firm’s change management was confronted with denial, rage, bargaining and melancholy from both his father and the employees. Amidst non-acceptance and inconsistency, he found himself in a quandary. He had two options: remain in the family firm and persevere in making his ambitions a reality or resign, find a job and embark on a new path. Unfortunately, leaving would indicate surrendering defeat after a two-year struggle.

Programmes: Master of Business Administration (MBA), Bachelor of Business Administration (BBA) programmes, MBA in Entrepreneurship and small businesses, and Post graduate diploma in management (PGDM).

Teaching notes are available for educators only.

CSS 3: Entrepreneurship