1. STABILITY, RETRENCHMENT AND
RESTRUCTURING

2. Stability
• When the environment is certain is
predictable.
• -NO- Change Strategy
• -Profit Strategy
• -Pause/Proceed-with-caution Strategy

3. NO CHANGE STRATEGY
• TO DO NOTHING NEW . CONTINUE WITH
PRESENT BUSINESS DEFINITION.
• THERE ARE NO SIGNIFICANT OPPS AND
THREATS
• THERE ARE NO NEW COMPETITORS
• THERE IS NO THREAT OF SUBSTITUTES
• COMPANIES WHO SERVE NICHE FOLLOW THIS
STRATEGY MORE OFTEN

4. PROFIT STRATEGY
• NO-CHANGE strategy is impossible to pursue for
ever. (PESTEL)
• The firm believes that the problems are short
lived
• This strategy aims at SUSTAINING PROFITS till the
time environmental conditions are good.
• The firm needs temporary QUICK FIX solution
• The firm tries to maintains its profitability by
artificial measures.
• Sell of some good location property
• Outsourcing facilities

5. PAUSE/PROCEED WITH CAUTION
STRATEGY
• The firm do something and rest and again
move ahead, then rest, then again move…….
• IT IS ALWAYS good to rest a while before
moving ahead.
• YOU can know future also (HUL)
• WHY SOME DELAY IS GOOD?
• Time to absorb the new strategy in the firm
• New Structural changes
• New culture

6. RETRENCHMENT STRATEGIES
• CONDITIONS FOR RETRENCHMENT
• Falling Sales
• Falling market share
• Increase in Debt
• Falling Profitability

7. RETRENCHMENT STRATEGIES
Turnaround
Regrouping through cost and asset
reduction to reverse declining sales
and profit
Divestiture Selling a division or part of an
organization
Liquidation
Selling all of a company’s assets, in
parts, for their tangible worth

8. TURNAROUND
• TURNING AROUND!!
• Turnaround is Reversing the process of decline
• TURNAROUND IS A CRISIS MANAGEMENT
ACTIVITY.
• When TURNAROUND IS good:-
• Persistent Negative Cash Flow
• Poor Quality products
• Mismanagement
• Poor Market Share

9. TURNAROUND
• It is a process dedicated to corporate renewal.
It uses analysis and planning to save troubled
companies and returns them to solvency.
• Once analysis is completed, a long term
strategic plan and restructuring plan are
created.

10. TURNAROUND
• Turnaround is Reversing the process of decline
• A company do the TURNAROUND in the
following condition:
• -Persistent Negative Cash Flow
• -Poor Quality products
• -Mismanagement
• --Poor Market Share

11. DIVESTMENT
• REASONS FOR DIVESTMENT
• Failed at Turnaround
• When a division needs more resources
• When that division becomes virus
• Quick money needed
• A better alternative for Investment may be
available

12. When to do Liquidation
• Both retrenchment and divestiture fails
• When no alternative is left (except
bankruptcy)

13. COMBINATION STRATEGIES
• MIXTURE OF
• Expansion
• Stability
• Retrenchment

14. RESTRUCTURING
• Changing STRUCTURE
• It is act of reorganizing the
legal, ownership, operational, or other
structures of a company for the purpose of
making it more profitable, or better organized
for its present needs.
• Other reasons for restructuring include a
change of ownership or ownership structure.

15. BENEFITS OF RESTRUCTURING
• Positioning the company to be more
competitive
• Survive a currently adverse economic climate.
• Lead the company move in an entirely new
direction.
• GOOD companies always keep on doing

16. RESTRUCTURING
• For example
• A corporate restructuring may call for spinning
off some departments into subsidiaries as a
means of creating a more effective
management model as well as taking
advantage of tax breaks that would allow the
corporation to divert more revenue to the
production process.

17. RESTRUCTURING
• LPU (changing OS )
• GE (earlier north/south…now
consumer/industrial/defence)
• Trident restructuring ( Towels earlier Product..
NOW geographical)

18. THANKS