Turnaround strategies retrenchment strategies - corporate level strategies - Strategic management...

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Turnaround strategies - Retrenchment Strategies Corporate Level Strategies

Transcript of Turnaround strategies retrenchment strategies - corporate level strategies - Strategic management...

Page 1: Turnaround strategies    retrenchment strategies - corporate level strategies - Strategic management - Manu Melwin Joy

Turnaround strategies - Retrenchment Strategies

Corporate Level Strategies

Page 2: Turnaround strategies    retrenchment strategies - corporate level strategies - Strategic management - Manu Melwin Joy

Prepared By

Kindly restrict the use of slides for personal purpose. Please seek permission to reproduce the same in public forms and presentations.

Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – [email protected]

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Retrenchment Strategies

Page 4: Turnaround strategies    retrenchment strategies - corporate level strategies - Strategic management - Manu Melwin Joy

Retrenchment strategy• A retrenchment grand strategy is

followed when an organization

aims at a contraction of its activities

through substantial reduction or

the elimination of the scope of one

or more of its businesses in terms

of their respective customer

groups, customer functions, or

alternative technologies either

singly or jointly in order to improve

its overall performance.

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Examples of Retrenchment strategy• General Motors of the

United States stopped

producing a number of

"makes" of automobile. GM

decided that it needed to

retrench by concentrating on

just a few "makes." It hoped

this would help it return to

profitability.

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Turnaround strategies• Turn around strategies derives

their name from the action

involved that is reversing a

negative trend. There are certain

conditions or indicators which

point out that a turnaround is

needed for an organization to

survive. An organization which

faces one or more of these issues

is referred to as a ‘sick’ company.

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Turnaround strategies• There are three ways in which

turnarounds can be managed– The existing chief executive and

management team handles the entire turnaround strategy with the advisory support of a external consultant.

– In another case the existing team withdraws temporarily and an executive consultant or turnaround specialist is employed to do the job.

– The last method involves the replacement of the existing team specially the chief executive, or merging the sick organization with a healthy one.

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Examples of Turnaround strategies• Xerox revealed a Turnaround

Programme in December 2000, which included cutting $1 billion in costs, and raising up to $4 billion through the sale of assets, exiting non-core businesses and lay-offs. Subsequently, in August 2001, Mulcahy was made CEO. Xerox continued to report losses in 2001, but it returned to profit in 2002 and continued to report profits in 2003.

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