2. Turnaround Strategy
• What is Turnaround?
– Higher costs of wages and raw material
– Decreased demand that can be the result of temporary demands dips
(such a lost contract)
– Strikes of employees
– Management problems
– Decreasing profitability
– Lost financial control
– Increasing dependence on debt
– Failure to reinvest equity in the business
– Lack of proper planning
– Inflexible chief execuGve
– Management succession problems
11. Approach - Business Restructuring Process
Stabilize Company,
Set Winning
Strategy
Rationalize Debt-
Equity Structure
Create Essential
Functional
Capabilities
Attract New Capital
and Owners
• Cost reduction
• Liquidity generation
• Product line
rationalization
• Asset utilization
improvement
• Reorganization
• Competitive
positioning
• Liquidity
management
• Balance sheet
restructuring
• Working capital
refinancing
• Bank debt workout
negotiations
• Strategic action
planning
• Organizational and
personnel
development
• Marketing and sales
• Financial planning
and MIS
• Business process
re-engineering
• Business plan
preparation
• Value enhancement
• Company valuation
• Assistance in
investor search
• Advocacy in
investor / strategic
buyer negotiations
Turnaround
Management
Financial
Restructuring
Performance
Improvement
Re-capitalizaGon
Full turnaround program has four stages, implemented through “parallel tasking”