Challenges Faced by Family Businesses in the Region
  Elements Potential opportunities
Rapidly
changing
Global
Market
s
Shift towards market integration.
Increased level of competition due to the impact of WTO.
Impact of competition may affect competitive advantages of local businesses and lead to distress sales creating deal flow for PE firms.
Family
Issues
Varying competence and contribution of family members.
Impact of generational change on ownership, governance, and operational performance of the business.
Due to generational changes, the family conglomerates may redistribute/sell ownerships within and outside the groups. PE firms can be potential partners in providing viable exits.
Organization and
Corporate
Governance
Retention of sustainable competitive advantage.
Development of institutional structures to improve governance and organizational performance (reporting mechanisms, accounting standards, succession planning, alignment of managers/owners interests, etc).
Develop and retain high-caliber human capital.
Greater strategic focus may lead to divestment of non-core businesses generating deals for PE firms.
PE firms can also partner with the family businesses to provide capital, improve corporate governance, assist in value creation and supplement management expertise.
 
   
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