Turnaround Strategies in Indian Industries: A Few Cases

J. R. Dikshit; P. C. Basak; Kamal Vagrecha

J. R. Dikshit Vishveshwarya Group of Institutions, Near Dadri, G. T. Road, Greater Noida phase-II Gautam Budh Nagar (U.P.), India;
P. C. Basak 2Lingaya’s University, Faridabad (Haryana), India;
Kamal Vagrecha 3Indira Gandhi National Open University (IGNOU), Maidan Garhi, New Delhi, India;

Keywords: Downsizing Strategy, Evaluation, Marketing and Product Mix Strategy, Organisational and Financial Restructuring, Situational Analysis, Steady State

Abstract

Turnaround strategy is the action of reversing a negative trend and turning around the organisation into profitability. Turnaround
strategy derives its name from the action of reversing a negative trend and turning around the organisation into profitability. The
turning around company aims at steady state and growth. The case studies on turnaround of five companies belonging to different
industries are discussed and analyzed. In all most all the cases there is a change in management. The management in all the cases
has acted in similar manner and after drawing up revival plan presented the same before various stakeholders. In serious situations,
top priority is given to stop the outflow of cash i.e. stop the bleeding. To identify and divest those segments of business which are
not contributing to cash flow. The emphasis shifts from ensuring cost reduction for survival to profit improvement with stability.
The emphasis of growth strategy has been on revenue growth coupled with profit margin in long run. Planning for growth should
be balanced with resources available and other constraints of the company. The possible turnaround strategies relating to finance,
marketing, products and human resource which have been initiated are discussed. The communication strategies aimed at the various
groups represent a key element for the successful turnaround of companies in critical conditions. The selected strategy needed
to be pursued relentlessly and with all out effort to make it work. The set of actions overlapped to some extent but each also had its
unique features, which tended to reflect and attempt to remedy the cause of sickness.