Indian loss companies need to learn 'turn around' strategy

New management is needed for a company's recovery or turnaround. New management comes up with new ideas and removes old beliefs from the culture culture company.

The profits of thousands of small and medium-sized companies in India are falling or they are making a loss. The turnaround strategy in English is called the strategy of turning a company into a profit by losing it. In the past when the American General Motors due to Japanese Competition

Sales of the (the largest car company in the world of its time) were declining and because of this there was a crisis, Lee Ayakoka had a major role to overcome. The company is considered to be the world's largest turnaround. For that, Lee Ayakoka sold several divisions of the company (such as the company's Jeep Manufacturing Unit) and took several other quick steps to raise cash. Remove old management: Old management does not work. New management is needed for a company's recovery or turnaround.

New management comes up with new ideas and removes old beliefs from the culture culture company. First, they eliminate the negative atmosphere of the company or the pessimism and create new possibilities for the company. If there is a decentralization of the company and the power is concentrated in the hands of a department or a group (toll free) then it breaks the power of the mob and decentralizes the company. Many old and past successful companies have the power of a single person.

This one-person power plays a big part in the failing companies. Therefore, according to the turnaround strategy, the task of creating a new management and a new system is top-priority. The company's debt goes up because it expects great sales for its products or services. Such expectations are not always true, so the company devises a strategy of (1) reducing costs (1) maximizing sales, trying to sell its assets without success, but who sells the assets of the losing company? Functional Strategies: The company also changes its manufacturing, marketing and finance and functional strategies to the personal.

The marketing department is told to reduce the cost of its distribution, reduce dealer margins, and use logistics of supply chains to save on transportation costs. Outsourcing parts of its products. The manufacturing department is advised that the factory uses 100 percent of its production power and keeps its budget as tight as possible. Turnaround strategy is a high risk activity.

Turnaround strategies have shown little chance of success. One of the reasons is that companies are very late in their strategy of turnaround strategy and, like cancer, are late when it starts to cure. In the past many companies producing VCD and VCR were very successful. But as the technology of VCD and VCR became obsolete, there was no solution except to close these companies.

When the era of personal computers began, the position of a US-based IBM company producing large-scale computers began to worsen. Then this company put on IBMPC Junior 8 and it succeeded. The company developed its cutting-edge expertise in other areas related to computers. American Lucent Company's Turnaround: The American Lucent Technologies company was founded as a telecommunications equipment company. It happened in the 5th. It was founded by American Telegraph and Telecom Company as a subsidiary of American giant.

Is. Its sales in the Fiscal Year of 1 was $ 5 billion, which fell to 5 billion dollars at the end of Fiscal Year, so the company lost a huge loss of 1.8 billion dollars. Following are the steps taken by the top management of the company to turn around the company.

૧. The company immediately laid off 5 to 6 employees and gradually increased its total workforce to one lakh fifty thousand employees.

The workforce was drastically reduced by 5, reducing the number of its staff to just 5.

૨. Reduced the number of manufacturing plants. Discontinued some restructuring manufacturing plants and restructured some.

૩. The company's fiber-optics business sold for $ 1 billion.

૪. Earned $ 1.8 billion through the sale of convertible preference shares.

૫. The four-billion-dollar banker was the godfather of the banks, which he negotiated with the banks and reorganized.

૬. Closed the production and sale of certain productlines.

૭. Formed a separate company for its microelectronic business.

૮. Adopted a large number of costcutting methods. Attempts were made to thin and accelerate Lucent Technologies.

Thinning the company means reducing the layers of management and trimming the managers from each layer, even on the 3rd.

The company continued to make losses. During the fourth quarter of Fiscal Year 1, the company had a loss of $ 8 million. At one time

The stock price of the company was 5 dollars, it went to $ 5 on September 9, and in 2, it was only two to two and a half dollars.

The turnaround of the company was not successful, hence This company (Lucent Technologies) was bought by American UltraTech Company on the 5th. Is.

The UltraTell Company of 3 was acquired by Nokia's Nokia company in Finland and ended up as an independent unit with Lucent Technologies.