A business encounters challenges because of internal/external environment at any stage of a business life cycle. Some of the environmental interventions/challenges encountered will be in control of the organization and some won’t be in the control of the organization. Thus, this time, a Strategy related case study was presented as a business insight. Following Business Insight presents the Organization, the Challenges it encountered and the turnaround strategies applied by the organization. The turnaround strategies applied gives useful insights for the business executives/learners. All the firms specified were Listed companies. The Challenges Encountered were having some effect (+ve or -ve) or the other on the share price/market capitalization of the company. However, these are the practical turnaround strategies a business organization can incorporate in its maturity stage of the business/when encountered challenges.
Table-1: Business Turnaround Strategies
|Sl.No.||Business Organization||Challenge Encountered/ Reason for Failure||Turnaround Strategy Applied|
|1.||Air India (2022)||i) Encountered Financial Losses ii) Debt Burden||a) Privatized the Firm b) Tata Group Acquired the Firm c) More focus on Product/On Time Perform of Services|
|2.||Paytm (2022)||i) Needs to Generate Return on Investment (RoI) for its Investors ii) Share Prices went Down in November 2022 iii) Faced RBI regulation for its Paytm Payments Bank||a) Strengthened Offline Payments b) Disbursed Loans worth $443 Million c) Races towards Operational Profitability|
|3.||Future Retail (2022)||i) Unable to Payoff its Debt ii) Undergoing Insolvency Resolution||a) Business was sold to Reliance Retail|
|4.||Fortis Healthcare (2022)||i) Encountered Financial Distress ii) Capital was Very Much Needed||a) Focused on Cost Optimization b) Scaling up the Business Incrementally c) Malaysian IHH acquired Fortis Healthcare d) Launched “100 Day” Turnaround Plan|
|5.||Yes Bank (2021)||i) Challenges Encountered in Raising Capital ii) Retaining Deposits became a Challenge iii) Encountered Difficulty in Recovering Bad Loads iv) Assets were Stressed v) Cost Optimization/Cost Control became a Challenge||a) SBI (State Bank of India) Purchased 26% stake (725 Crore Shares) in the Company b) Investor Sentiment Became Optimistic c) Shown Remarkable Progress/Turnaround in the Year|
|6.||Ford India (2021)||i) Announced Shutdown of its Manufacturing Plants in India||a) Tata Electric Vehicles Firm acquired Sanand, Gujarat Manufacturing Plant for Rs 725 Crore b) Also Acquired Employees of the Plant c) Reoriented the Strategy towards Profit and Value Oriented Business|
|7.||SUN Pharma (2021)||i) Faced US FDA Regulation related to Prevention of Drug Contamination in their Manufacturing Process ii) Encountered Drug Price Collision Challenge in USA iii) Investors Thought that Promoter Entered into Non-Core Business Areas such as Solar Energy/Oil & Gas Industries||a) Increased RoI (Return on Investment) for Investments b) Focused on Robust Core Business Growth c) Sale of Covid Related Products d) Strengthened Global Product Portfolio|
|8.||Cafe Coffee Day (2019/2020)||i) Could not Recover Because of Accumulated Debt||a) Cash Concentration was done b) Disbursed Money to Lenders on an Incremental Basis c) Cost Optimization was also done|
|9.||Nestle Maggi Noodles (2015)||i) Encountered Challenge of Excessive Levels of Certain Substance in its Products ii) Led to Multiple Market Withdrawals and Encountered Investigation in India||a) Came out of Regulatory Challenge with Necessary Actions b) Deflation/Low Raw Material Prices Supported Re-bounce c) Gained Lost Market Back within a Year|
|10.||Ranbaxy (2015)||i) Challenge was Manufactured Low Margin Products/Over the Counter Products ii) Encountered US FDA regulations iii) Some of its Generics Manufacturing Plants were asked to Shutdown iv) Quality related Challenges also Encountered||a) Merged with SUN Pharma in 2015|
Thank You. Happy Learning.
Remember, this is only for Learning Purpose.
Dr.Goparaju Purna Sudhakar
- BusinessLine (2022), “IHH Ready to Proceed with Open Offer for Fortis When SEBI gives Go ahead”, Business Line, November 12, 2022
- BusinessLine (2018), “Maggi Wins Back Market Share on Sustained Recovery”, Business Line, January 16, 2018.
- BusinessStandard (2021), “SUN Pharma Soars After Turnaround Q1 Numbers”, BusinessStandard, July 30, 2021
- BusinessStandard (2022), “Future Retail Saga Explained: From Rise & Fall to Amazon-RIL Court Battle”, Business Standard, November 11, 2022
- Bundhun, R. (2022), “Air India’s Turnaround Strategy Begins to Take off Following Privatization”, The National News, October 03, 2022
- ETBFSI (2020), “Challenges Before the New Yes Bank, Which gares up for Business Today”, The Economic Times. March 18, 2020.
- George, A.A. (2020), “Yes Bank Crisis and Reconstruction: Explained”, ClearIAS.com, March 15, 2020
- Priyanka, P. (2014), “SUN has a Better shot than Most at Ranbaxy Turnaround”, Forbes India, April 29, 2014.
- Somvanshi, K.K. (2017), “What went Wrong for SUN Pharma: A tragedy in 4 Parts”, The Economic Times, June 01, 2017.
- PTI (2023), “Tata Motors Completes Acquisition of Ford’s Sanand Manufacturing Plant”, Business Standard, January 10, 2023
- Wikipedia (2023), “Maggi Noodles Safety Concerns in India”, Wikipedia.org
- CNBCTV18 (2021), “Explained: Why Ford is Shutting Manufacturing Plants in India”, CNBCTV18.com, September 09, 2021.
- Singh, B. (2022), “Meet Malvika Hegde, From a Heartbroken Wife to Determined CEO who Saved CCD from Dying”, Indiatimes.com, January 12, 2022.
- IndiaToday (2023), “Analyst’s Confident About Paytm’s Turnaround Story, lap up the Stock”, India Today, January 16, 2023.
- Iyer, A. (2022), “What is Wrong with Paytm”, moneycontrol.com, March 24, 2022.