What Is Turnaround Strategy? Meaning, Definition, Examples

Meaning of Turnaround Strategy

Following diagram depicts the center pregnant of turnaround strategy.

The concept or pregnant of turnaround strategy covers next points:

1. Turnaround strategy agency to convert, alter or transform a loss-making companionship into a profit-making company.
2. It agency to brand the companionship profitable again.
3. The principal travel of implementing a turnaround strategy is to plough the companionship from a negative betoken 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 withdraw all weaknesses to aid a sick companionship in ane lawsuit once again instruct strong, stable in addition to 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, in addition to from an instability to stability.
9. It aids to trim the brought forrard losses of the loss-making company.
10. It helps the sick companionship to stand upwards in ane lawsuit 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 dissimilar senses is depicted below.

financial, commercial, corporate or from a business perspective, the turnaround strategy tin endure 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 furnish on capital employed, in addition to continuous decrease inwards the value of its shares.”

Finally, from an academic betoken of view, its definition tin endure stated equally under.

“Turnaround strategy is an analytical approach to solve the rootage drive failure of a loss-making companionship to determine the almost crucial reasons behind its failure. Here, a long-term strategic computer program in addition to restructuring plans are designed in addition to implemented to solve the issues of a sick company.”

Examples of Turnaround Strategy

Some examples of turnaround strategy are depicted below.

bank ‘A’ is suffering from losses due to non-performing assets (NPA). NPA is loan given simply non even in addition to thence recovered. This banking concern ‘A’ volition follow turnaround strategy in addition to examine to recover its loans past times appointing recovery agents.

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 trim labour inactivity past times installing modern machines (automation) to ship on the same piece of work or job.

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 trim losses past times providing facilities similar e-Registration, conducting online classes, etc. to attract students.