What Is Turnaround Strategy? Meaning, Definition, Examples

Meaning of Turnaround Strategy

Following diagram depicts the pith pregnant of turnaround strategy.

The concept or pregnant of turnaround strategy covers next points:

Turnaround strategy way to convert, alter or transform a loss-making companionship into a profit-making company.
It way to brand the companionship profitable again.
The principal run of implementing a turnaround strategy is to plough the companionship from a negative squall for to a positive one.
If a turnaround strategy is non applied to a sick company, it volition unopen down.
It is a remedy for curing industrial sickness.
Turnaround is a restructuring strategy. Here, a loss-bearing companionship is transformed into a profit-earning company, yesteryear making systematic efforts.
It tries to take all weaknesses to assist a sick companionship ane time once again larn strong, stable too a profit-making institution.
It tries to contrary the seat from loss to profit, from declining sales to increasing sales, from weakness to strength, too from an instability to stability.
It aids to trim the brought frontward losses of the loss-making company.
It helps the sick companionship to stand upwards ane time once again inward the market.
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 laissez passer on the axe last defined equally follows.

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

Finally, from an academic squall for of view, its definition tin laissez passer on the axe last stated equally under.

“Turnaround strategy is an analytical approach to solve the rootage crusade failure of a loss-making companionship to determine the roughly crucial reasons behind its failure. Here, a long-term strategic programme too restructuring plans are designed too 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 merely non soundless recovered. This depository fiscal establishment ‘A’ volition follow turnaround strategy too seek out to recover its loans yesteryear appointing recovery agents.

Manufacturing companionship say ‘XYZ’ is suffering from losses due to excess idle fourth dimension taken yesteryear labour to consummate their jobs. The manufacturing companionship ‘XYZ’ volition follow turnaround strategy to trim labour inactivity yesteryear installing modern machines (automation) to send on the same piece of work or job.

Educational institution, for example, ‘C’ is suffering from losses due to non-registration of students inward their courses. This establishment ‘C’ volition follow turnaround strategy to trim losses yesteryear providing facilities similar e-Registration, conducting online classes, etc. to attract students.