What Is Turnaround Strategy? Meaning, Definition, Examples

Meaning of Turnaround Strategy

Following diagram depicts the nitty-gritty pregnant of turnaround strategy.

The concept or pregnant of turnaround strategy covers next points:

1. Turnaround strategy way to convert, alter or transform a loss-making companionship into a profit-making company.
2. It way to brand the companionship profitable again.
3. The top dog role of implementing a turnaround strategy is to plough the companionship from a negative indicate to a positive one.
4. If a turnaround strategy is non applied to a sick company, it volition unopen down.
5. It is a remedy for curing industrial sickness.
6. Turnaround is a restructuring strategy. Here, a loss-bearing companionship is transformed into a profit-earning company, past times making systematic efforts.
7. It tries to take away all weaknesses to aid a sick companionship 1 time once again popular off strong, stable as well as a profit-making institution.
8. It tries to contrary the seat from loss to profit, from declining sales to increasing sales, from weakness to strength, as well as from an instability to stability.
9. It aids to cut back the brought forwards losses of the loss-making company.
10. It helps the sick companionship to stand upward 1 time once again inwards the market.
11. It is a consummate U-turn of a planned strategic economical transition.

Definition of Turnaround Strategy

The definition of turnaround strategy w.r.t unlike senses is depicted below.

In general, the definition of turnaround strategy tin reach the sack hold out stated equally follows.

“Turnaround strategy is a corporate do designed as well as planned to protect (save) a loss-making companionship as well as transform it into a profit-making one.”

In financial, commercial, corporate or from a business perspective, the turnaround strategy tin reach the sack hold out defined equally follows.

“Turnaround Strategy is a corporate activity that is taken (performed) to bargain alongside issues of a loss-making (sick) companionship similar increasing losses, lower provide on capital employed, as well as continuous decrease inwards the value of its shares.”

Finally, from an academic indicate of view, its definition tin reach the sack hold out stated equally under.

“Turnaround strategy is an analytical approach to solve the origin campaign failure of a loss-making companionship to cause upward one's hear the nearly crucial reasons behind its failure. Here, a long-term strategic computer programme as well as restructuring plans are designed as well as implemented to solve the issues of a sick company.”

Examples of Turnaround Strategy

Some examples of turnaround strategy are depicted below.

Consider next examples of turnaround strategy:

1. Financial Institution, for example, to a greater extent than or less bank ‘A’ is suffering from losses due to non-performing assets (NPA). NPA is loan given merely non nevertheless recovered. This banking concern ‘A’ volition follow turnaround strategy as well as attempt out to recover its loans past times appointing recovery agents.
2. Manufacturing companionship say ‘XYZ’ is suffering from losses due to excess idle fourth dimension taken past times labour to consummate their jobs. The manufacturing companionship ‘XYZ’ volition follow turnaround strategy to cut back labour inactivity past times installing modern machines (automation) to ship on the same operate or job.
3. Educational institution, for example, ‘C’ is suffering from losses due to non-registration of students inwards their courses. This establishment ‘C’ volition follow turnaround strategy to cut back losses past times providing facilities similar e-Registration, conducting online classes, etc. to attract students.