Chapter 12: Turnaround strategy + strategy implementation Flashcards
Restructuring concept steps
A Company description
B Analysis of the company’s economic situation
C Analysis of the causes behind the crisis
D Target state of the restructured company -> turnaround objectives, strategy + activity
E business planning
F financing concept
A Description of the company
- Description of the Company
- Assets/ revenues + financial situation
B Analysis of the company’s economic situation in its sector
- by assessing the business model + strategic and operational positioning
- backed by market analysis + forecast as basis f. Business planning
> market influence factors (global trend + SWOT)
> market development + forecast
C Analysis of causes behind the crisis
Starting point in development countermeasures
Crisis stages: strategy->profitability/ revenue->Liquidity
D Target State fo the restructured company
Companys target state after turnaround:
- bottom line improvement
- strategic concept
- operating concept +action program
E business planning
- P+L
- Balance sheet
- cash flow
F Financing concept
Cornerstones
Reasons for strategy implementation problems
- bridging gap between strategy development and its practical implementation
- implementation seen as operational task
Negative consequences through implementation problems
- competitive disadvantage
- customers leave, key talent lost + financial performance suffers
Barriers to successful strategy implementation
- the vision barrier (don’t understand strategy)
- the management barrier (executive teams don’t spend enough time time discussing strategy)
- the resource barrier (no link from budgets to strategy)
- the people barrier (no incentives linked toi strategy)
Ten keys to successfully strategy execution
- development of resources + organizational capabilities required for successful execution
- established strategy-supportive organizational structure
- allocation of sufficient resources to the strategy execution effort
- staff organization with right people for executing the strategy
- policies + procedures which facilitate strategy execution
- adoption of best practices which drive continues improvement
- rewards + incentives for achievement of strategic/ financial achievements
- instilling a corporate culture => promotion of good strategy executions
- exercising strong leadership
- installation of information + operating systems