Introduction to Business and Commerce: Scope, Significance, and Functions

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PROF. ANUJA BAPAT
 
MODULE I: BUSINESS
Introduction to Business
:
 Concept, Functions,
Scope and Significance of business, Traditional
and Modern Concept of business.
Objectives of Business
: 
Steps in setting business
objectives, Classification of business objectives,
Reconciliation of Economic and Social objectives
New Trends in Business:
 
Impact of Liberalization,
Privatization and Globalization, Strategy
alternatives in the changing scenario,
Restructuring and Turnaround Strategies.
 
The term “Business” refers to commercial
activities relating to production and distribution
of goods and services for economic gain i.e.
profit.
“Business is an institution organized and
operated to provide goods and services to
society under the incentive of private gain.” –
B.O.Wheeler.
Production Function
Inventory Management
Marketing Function
Sales Function
Finance Function
Human Resource Management
Research and Development
Public Relations
Corporate Planning
Corporate Social Responsibility
Business
 
 
Industry
     
    
Commerce
 
Primary
     
    Trade
 
Genetic
     
    Aids to Trade
 
Extractive
 
Manufacturing
 
Construction
 
    
       
Commerce
   
Trade
   
Aids to Trade
 
 
Internal
 
  Retail
  Wholesale
 
External
 
  Import
  Export
  Entrepot
  Warehousing
  Transport
  Communication
  Insurance
  Banking
  Advertising
  Salesmanship
  Mercantile  Agents
 
Role of business
 
To business firms
1.Achievement of objectives
2.Corporate image
3.Customer satisfaction
4.Competitive Advantage
5.Efficiency of business
6.Expansion of business
7.Economies o scale
8.Optimum utilization of
resources
9.Research and
development
10.Relationships with
society
11.Social status
 
To consumers
1.
Availability of quality
goods and services
2.
Goods at good price
3.
Better facilities and
services
4.
Customer satisfaction
5.
Higher standard of
living
6.
Status to the
customers
 
 
To society
1.Economic growth
2. Employment
3. Regional development
4. Revenue to the
Govt.
5.Social order
6.Standard of living
7.Capital formation
8.Competition benefits to
society
9.Infrastructure
development
10.International relations
It’s the 
aims
 of an organization.
The objectives can be 
short term, medium term
and long term.
It includes: 
Sales, market share, profits,
corporate image etc.
“Objectives are the 
goals, aims or purpose that
organization wish to achieve over varying
period of time
.”- Dalton E. McFarland
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A. Survival:    
basic and primary objective to 
prevent from
closure or exit from the market
. The problems can be due to
competition, changes in consumer behavior, technology etc
 
Problems can be solved by:
A. Cost reduction
B. Customer relationship,
C. Competitive advantage,
D. Constant monitoring,
E. Optimum utilization of resources
F. Obtaining employees suggestions.
 
Expansion of business activities
: new products 
or
expanding existing product line 
or 
entering new
markets
.
Prestige or recognition in the market.
Good corporate image.
TCS, Infosys, Wipro etc.
 
Ways to earn prestige:
 
Quality products
Right price
Promotion mix
CSR activities
Corporate culture activities
After- sales service
Customers
: quality products, right price after- sales service.
Dealers
: supply on time, training to staff of dealers, incentives.
Employees
: wages and incentives, working condition, welfare
facilities.
Financial institutions
Government
: taxes and duties, rules and regulations, aids to
welfare activities.
Shareholders
: dividend regularly, information about progress
and prospects, bonus shares
Suppliers
: payment of dues, quality of supplies, trade terms.
Media
Competitors
Business is a part of society and so it has to balance
between its social obligations and economic objectives.
Profit and Price 
(right prices with
consumer’s interest)
Profit and Research & Development
(improvement in quality and
reduction in costs and goods at
lower prices)
Profit and After- sales service
(training and motivating employees
for better services)
Profit and Employees welfare
(working conditions, welfare
facilities, wages and salaries)
Profit and taxes 
(pay taxes and
duties to the government without
any manipulation)
 
Profit and Shareholder’s Interest:
fair returns to shareholders in the
form of dividend
Profit and Social Development: 
part
of profit to be utilized for social
development
Business Expansion and Social
Interest:
 employment generation,
better customer service, pollution
control measures
Business Expansion and
Competition: 
no negative tactics
Business Expansion and Supplier:
no exploitation of suppliers
Liberalization:
 Reduction of Government
controls on the private sector.
Privatization:
 Dereservation and Disinvestment
of public sector.
Globalization:
 Interlinking of domestic economy
with the world economy. Reduction or
withdrawals of custom duties, quotas,
restrictions etc. and allow free flow of goods
and services.
NIP  - New Industrial
Policy - 1991
Positive Impact
Abolition of Phased
Manufacturing
Programme
Liberalization of
Industrial Locations
Broad Banding of
Industries
Competition Act 2002
Delicensing
Negative Impact
Abolition of Phased
Manufacturing
Programme
Liberalization of
Industrial Locations
Broad Banding of
Industries
Delicensing
Domestic contents RM
100% RM  import  -
allowing
6 industries – license –
pollution created
- Permission – locate -
industry
Car, tempo, truck
SS  >  DD
Positive Impact
 
Benefits of
Dereservation
 
Benefits of
Disinvestment
Negative Impact
 
Problem of
Dereservation
 
Problem of
Disinvestment
PRODUCTION
SS  > DD
RECESSION
Positive Impact
 
Reduction of Custom
Duties
Foreign Exchange
Management  Act, 1999
Liberalization of Foreign
Investment.
Negative Impact
 
Problem for Domestic
Companies
Problem of Foreign
Investment
Problem of Foreign
Technology
GOODS
SERVICES
GOVT.
BARRIERS X
 
FREELY
FDI
LPG
 
I
 
Stable Growth Strategy
 
 
II
 
Growth Strategy
 
 
III
 
Retrenchment Strategy
 
 
IV
 
Combination Strategy
LONG TERM PLAN
MKT SHARE 2%
+ 2%
+ 2%
+ 2%
PRODUCTS 1
2
3
4
5
 
MARKETS 1
3
4
REDUCING/SELL
UNITS
All the above strategies,
followed
Growth & retrenchment
A B C X             
D
 
Reasons:
Performance level
Profits
Risk Factor
Resources
Environment
Expertise
Market Share
Management Philosophy
 
Market share
7%
satisfactory
happy
Growth  x = risk x
Finance
Human
Machineries
Expert  knowledge
Less
Internal
External
Stable/favourable
CA, legal advisor,
company
secretary
Mkt share 10 %
traditional
 
Internal Growth
External Growth
Intensification
Diversification
1. Market Penetration
 
2. Market Development
 
3. Product Development
1.   Vertical
a)
Forward
b)
Backward
2.   Horizontal
3.   Concentric
4.   Conglomerate
1.
Collaboration or
Joint Venture
 
1.
Merger and
Amalgamations
 
2.
Takeovers or
Acquisitions
A
B
FOREIGN
COLLABERATION
A
B
B shares
Maximum
30%
Finance
institution
Car
dealer
customer
Iron
&
steel
electronic
Pharma
textile
A
B
AB
70%
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IMPORTANCE TO DOMESTIC COMPANY
IMPORTANCE TO FOREIGN
COLLABORATOR
Capital
Skills Development
Technology Transfer
Competitive Advantage
Corporate Image
Economies of Scale
Expansion of Business
Recovery of R & D Expenses
Goodwill in Foreign Market
Inputs at Lower Prices
Incentives
Higher Returns
India
Japan
Grow, expand,
technology, m/c, R&D
LARGE SCALE
C.P.U.
BULK PURCHASE, bulk
distribute, heavy discount,
fixed cost same,  variable cost
increases,---- total cost / no. of
units manufacturing
Japan Mfg unit
Technology  R&D
cost
I
Tax
holiday
USA
UK
S
Singapore
B
5%
A
12%
AB
17%
R&D, technology-
efficiency
Higher returns at a
lower cost
LARGE SCALE
PRODUCTION
C.P.U.
PROFIT/REVENUE
B LTD. REVITAL
TRAINING,
MACHINARIES
Save  the tax
Profit----tax
Profit –
training, m/c,
E = R/C
HERO –CYLES
HONDA - BIKES
A
B
 
Advantages:
Easy  Entry in Overseas Market
Growth and Expansion
Helps to face Competition
Market Share
Goodwill
Economies of Scale
Tax Benefits
Financial Resources
X
Y
SHARES
 
Divestment Strategy:  Dropping some of the
products, markets or functions.
 
Liquidation Strategy: Sell entire business unit.
Close down the business.
DISTRIBUTION
OUTSOURCES
LOGISTICS
 UNITS/FACTORS  --
CLOSE
Reduction in no of
activities.
 
Attractive offer from other firm
Better alternative for investment
Concentration on core business
Debt servicing problem
Mismatch of business
Negative cash flows
Obsolete products
Problem of competition
Technology up gradation
Returns to shareholders
Pharma –
medicines and
drugs,
Health tonics,
drinks,  x
Debt – loan burden
Cloth/
textile
garments
Fashion
designing
Chemical
goods
Income< expenses
outdated
 
Reasons:
Accumulated losses
Offer for better price
Difficult to manage due to decline sales and low profits
Future of business not certain
Does not match with current line of business
 
Legal Aspect:
Compulsory winding up under the court order
Voluntary winding up: members, creditors
Voluntary winding up under the supervision of the court
 
1.
Mergers:  Horizontal, Vertical, Conglomerate
2.
Takeovers
3.
Purchase of Division: one of the unit  is purchased
4.
Divestiture:
5.
Demerger: one company split into several cos.
6.
Going Public: Pvt. Co is converted public ltd. co
7.
Debt-equity Swap: Converting debt capital into equity.
8.
Leveraged Buyout: step by step you purchase the
another company.
9.
Buyback of Shares: co. purchases their own shares
from the market.
 
 
 
 
 
 
 
 
 
 
Changes
-   split of one
company into two
or three
companies
Pvt co. --------public ltd.
co
Converting borrowed
capital into equity
capital
 
10. Business Process Reengineering: change the
manufacturing process
11. Downsizing: reducing the no. of employees from the
org.
12. Outsourcing: some activities of the
organization/business you get it done from outside
13. Rehabilitation schemes:
Settlement with Creditors
Divestment
Strict Control over Costs
Streamlining of Operations…
 
 
 
 
 
 
 
 
 
 
Changes
1000 workers
400 removed workers
Car industry
Body, engine,
glass, tyers , seats,
Size, shape,
width
No good
performance
 
Communication
Availability of Resources
Leadership
Long-term Approach
Review of the Situation: Evaluation- internal and
external : govt. policies, customer likes,
technology, labour – management relationship.
Support from Various Parties: employees, sh
holders, creditors, suppliers……
Viability of Business: feasibility,
Convert a loss making
unit into profit making
once again.
Quick, clear
and complete
 
Setting up a Turnaround Committee
: management
people, consultants, employees – core committee
Indentifying the Causes of Losses
: internal, external
Investigation of Causes
: detailed analysis: employees,
customers, dealers
Alternative Solutions: 
downsizing, debt –equity swap,
divestment, concentrate profitable segment
Analysis of Alternatives
: cost – benefit analysis
Selection of Best Alternatives
:
Communication of Turnaround Strategy
:
Organization and Allocation of Resources:
Implementation
Review
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This content covers the fundamentals of business and commerce, including the nature, scope, functions, and importance of business activities. It discusses business objectives, trends, globalization, and the significance of business in society. The scope of commerce, trade, and various business functions such as production, marketing, finance, and human resource management are also explored.


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  1. FYBCOM SEM I COMMERCE PAPER I PROF. ANUJA BAPAT

  2. SYLLABUS MODULE I: BUSINESS Introduction Introduction to to Business Scope and Significance of business, Traditional and Modern Concept of business. Objectives Objectives of of Business Business: : Steps in setting business objectives, Classification of business objectives, Reconciliation of Economic and Social objectives New New Trends Trends in in Business Business: : Impact of Liberalization, Privatization and alternatives in the Restructuring and Turnaround Strategies. Business: : Concept, Functions, Globalization, changing Strategy scenario,

  3. INTRODUCTION TO BUSINESS The term Business refers to commercial activities relating to production and distribution of goods and services for economic gain i.e. profit. Business is an institution organized and operated to provide goods and services to society under the incentive of private gain. B.O.Wheeler.

  4. NATURE/FEATURE OF BUSINESS Organized Activity Profit Motive Regularity in Dealings Risks and Uncertainties Societal Interest Social Responsibility Business Functions Creative and Dynamic Customer Satisfaction Degree of Scale Government Control

  5. FUNCTIONS OF BUSINESS Production Function Inventory Management Marketing Function Sales Function Finance Function Human Resource Management Research and Development Public Relations Corporate Planning Corporate Social Responsibility

  6. SCOPE OF BUSINESS Business Business Industry Industry Primary Genetic Extractive Manufacturing Construction Commerce Commerce Trade Aids to Trade

  7. SCOPE OF COMMERCE Commerce Commerce Trade Trade Aids to Trade Aids to Trade Warehousing Transport Communication Insurance Banking Advertising Salesmanship Mercantile Agents Internal Internal External External Retail Wholesale Import Export Entrepot

  8. SIGNIFICANCE/IMPORTANCE OF BUSINESS Role of business Role of business To consumers To consumers To society To society To business firms To business firms 1.Achievement of objectives 2.Corporate image 3.Customer satisfaction 4.Competitive Advantage 5.Efficiency of business 6.Expansion of business 7.Economies o scale 8.Optimum utilization of resources 9.Research and development 10.Relationships with society 11.Social status 1. Availability of quality goods and services 2. Goods at good price 3. Better facilities and services 4. Customer satisfaction 5. Higher standard of living 6. Status to the customers 1.Economic growth 2. Employment 3. Regional development 4. Revenue to the Govt. 5.Social order 6.Standard of living 7.Capital formation 8.Competition benefits to society 9.Infrastructure development 10.International relations

  9. DIFFERENCE BETWEEN TRADITIONAL AND MODERN CONCEPT OF BUSINESS Points Points Traditional Traditional Modern Modern Meaning It places emphasis on profits. It aims to achieve a balance between profits, customer satisfaction and societal interest. Marketing research Do not place emphasis on marketing research or customer feedback. Gives importance to marketing research and customer feedback. Nature of decision making reactive decisions in response to competitors decision. proactive decisions to gain competitive advantage Opportunity seeking adhoc search for new opportunity. ongoing search for new opportunities.

  10. DIFFERENCE BETWEEN TRADITIONAL AND MODERN CONCEPT OF BUSINESS Points Points Traditional Traditional Modern Modern Orientation is producer or seller oriented a customer and society oriented Pricing methods cost oriented pricing methods market oriented pricing methods Promotion Mix limited emphasis gives importance Quality of Products Firms hardly place emphasis on R&D to improve quality and to develop new products. Caters mostly local market. Professional managers place a lot of emphasis on R&D to improve quality and to develop new products. operate over a large market even at global level. Area Coverage

  11. OBJECTIVES OF BUSINESS It s the aims The objectives can be short term, medium term short term, medium term and long term. and long term. It includes: Sales, market share, profits, Sales, market share, profits, corporate image etc. corporate image etc. Objectives are the goals, aims or purpose that goals, aims or purpose that organization wish to achieve over varying organization wish to achieve over varying period of time period of time. - Dalton E. McFarland aims of an organization.

  12. STEPS IN SETTING BUSINESS OBJECTIVES Analysis of environment Values of top management Setting of objectives Implementation Review of performance

  13. 1. 1. Analyze internal environment: Analyze internal environment: Physical, financial, human resources, policies and strategies, working conditions, management, Strengths and Weaknesses Strengths and Weaknesses. 2. Analyze external environment: Analyze external environment: Government policies, competitor s strategies, consumer tastes and preferences, events in the international environment, technological development etc, Opportunities and threats. Opportunities and threats. 3. Values and beliefs of top management Values and beliefs of top management: Mission Mission statement, vision management etc vision of the organization, mentality mentality of the top 4. Involvement of employees: Involvement of employees: Management by objectives (MBO), co from sub- ordinates in achieving goals. (MBO), co- -operation and commitment operation and commitment

  14. 5. Past performance of the firm: Past performance of the firm: Provides direction, past objectives and developments. direction, past objectives and developments. 6. Setting of objectives: (SMART) Setting of objectives: (SMART) S Specific M Measurable A Attainable R Realistic T Time bound 7. Implementation Implementation Organizing Organizing resources Directing Directing sub- ordinates Motivating Motivating sub- ordinates 8. Review Review Objectives are achieved Deviations Deviations : corrective measures, resetting of objectives etc achieved OR

  15. CLASSIFICATION OF BUSINESS OBJECTIVES Business objectives Organic objectives Economic objectives Social objectives Human objectives National objectives

  16. I. ORGANIC OBJECTIVES OF BUSINESS A. Survival: A. Survival: basic and primary objective to prevent from closure or exit from the market closure or exit from the market. The problems can be due to competition, changes in consumer behavior, technology etc prevent from Problems can be solved by: A. Cost reduction B. Customer relationship, C. Competitive advantage, D. Constant monitoring, E. Optimum utilization of resources F. Obtaining employees suggestions.

  17. B. GROWTH Expansion of business activities: new products expanding existing product line expanding existing product line or entering new markets markets. . : new products or entering new Internal Growth Strategies Product development Market development Market penetration External Growth Strategies Mergers Acquisitions or takeovers Joint ventures

  18. C. PRESTIGE Prestige or recognition in the market. Good corporate image. Good corporate image. TCS, Infosys, Wipro etc. Ways to earn prestige: Quality products Right price Promotion mix CSR activities Corporate culture activities After- sales service

  19. II. ECONOMIC OBJECTIVES Profit Resourceutilization Innovation. Creation of wealth Creation of customer Corporate image Expansion of markets Sales Market share Product introduction

  20. III. SOCIAL OBJECTIVES Customers Customers: quality products, right price after- sales service. Dealers Dealers: supply on time, training to staff of dealers, incentives. Employees Employees: wages and incentives, working condition, welfare facilities. Financial institutions Financial institutions Government Government: taxes and duties, rules and regulations, aids to welfare activities. Shareholders Shareholders: dividend regularly, information about progress and prospects, bonus shares Suppliers Suppliers: payment of dues, quality of supplies, trade terms. Media Media Competitors Competitors

  21. IV. HUMAN OBJECTIVES Fair wages Working conditions Worker s participation in management Welfare activities Human resource development Job satisfaction Human objectives towards customers and society

  22. V. NATIONAL OBJECTIVES Social justice Development of small scale industry Production as per national priorities Self sufficiency Development of backward areas Employment opportunities National integration and communal harmony Social welfare Others

  23. RECONCILIATION (BALANCE) BETWEEN SOCIAL AND ECONOMIC OBJECTIVES Business is a part of society and so it has to balance Business is a part of society and so it has to balance between its social obligations and economic objectives. between its social obligations and economic objectives.

  24. OBJECTIVES CAN BE RECONCILED BY: Profit and Shareholder s Interest: Profit and Shareholder s Interest: fair returns to shareholders in the form of dividend Profit and Social Development: Profit and Social Development: part of profit to be utilized for social development Business Expansion and Social Business Expansion and Social Interest: Interest: employment generation, better customer service, pollution control measures Business Expansion and Business Expansion and Competition: Competition: no negative tactics Business Expansion and Supplier: Business Expansion and Supplier: no exploitation of suppliers Profit and Price Profit and Price (right prices with consumer s interest) Profit and Research & Development Profit and Research & Development (improvement in quality and reduction in costs and goods at lower prices) Profit and After Profit and After- - sales service sales service (training and motivating employees for better services) Profit and Employees welfare Profit and Employees welfare (working conditions, welfare facilities, wages and salaries) Profit and taxes Profit and taxes (pay taxes and duties to the government without any manipulation)

  25. DISTINGUISH BETWEEN ECONOMIC AND SOCIAL OBJECTIVES Points Points Economic Objectives Economic Objectives Social Objectives Social Objectives Meaning Relate to economic or financial aspects of the firm Higher returns to the firm Relate to responsibilities of business towards the various stakeholders To earn goodwill Purpose Primary/Second ary Scope They are the primary objectives of business Narrow scope. Achieved by only business firms Public may not support those firms Since long They are the secondary objectives of business Wider scope. Achieved by business and non business organization. Public strongly support those firms Support from public Origin Gained importance in 20th century interest Satisfy s the interest of the owner Satisfy s the interest of the society

  26. NEW TRENDS IN BUSINESS Liberalization: Liberalization: Reduction of Government controls on the private sector. Privatization: Privatization: Dereservation and Disinvestment of public sector. Globalization Globalization: : Interlinking of domestic economy with the world economy. Reduction or withdrawals of custom restrictions etc. and allow free flow of goods and services. duties, quotas,

  27. IMPACT OF LIBERALIZATION Positive Impact Positive Impact Abolition of Phased Manufacturing Programme Liberalization of Industrial Locations Broad Banding of Industries Competition Act 2002 Delicensing Negative Impact Negative Impact Abolition of Phased Manufacturing Programme Liberalization of Industrial Locations Broad Banding of Industries Delicensing

  28. IMPACT OF PRIVATIZATION Positive Impact Positive Impact Negative Impact Negative Impact Benefits of Dereservation Problem of Dereservation Benefits of Disinvestment Problem of Disinvestment

  29. IMPACT OF GLOBALIZATION Positive Impact Positive Impact Negative Impact Negative Impact Reduction of Custom Duties Foreign Exchange Management Act, 1999 Liberalization of Foreign Investment. Problem for Domestic Companies Problem of Foreign Investment Problem of Foreign Technology

  30. STRATEGY ALTERNATIVES I Stable Growth Strategy II Growth Strategy III Retrenchment Strategy IV Combination Strategy

  31. I. STABILITY STRATEGY I. STABILITY STRATEGY Reasons: Performance level Profits Risk Factor Resources Environment Expertise Market Share Management Philosophy

  32. II. GROWTH STRATEGY External Growth Internal Growth 1. Collaboration or Joint Venture Intensification Diversification 1. Merger and Amalgamations 1. Vertical a) Forward b) Backward 2. Horizontal 3. Concentric 4. Conglomerate 1. Market Penetration 2. Takeovers or Acquisitions 2. Market Development 3. Product Development

  33. FOREIGN COLLABORATION India Japan IMPORTANCE TO FOREIGN COLLABORATOR IMPORTANCE TO DOMESTIC COMPANY Capital Skills Development Technology Transfer Competitive Advantage Corporate Image Economies of Scale Expansion of Business Recovery of R & D Expenses Goodwill in Foreign Market Inputs at Lower Prices Incentives Higher Returns

  34. MERGER AND AMALGAMATION Reasons/ Advantages: Competitive Advantage Diversification Economies of Scale Financial Benefits Growth Higher Market Share Increase in Goodwill Revival of sick units Efficiency

  35. TAKEOVER AND ACQUISITION Advantages: Easy Entry in Overseas Market Growth and Expansion Helps to face Competition Market Share Goodwill Economies of Scale Tax Benefits Financial Resources

  36. III. RETRENCHMENT STRATEGY Divestment Strategy: Dropping some of the products, markets or functions. Liquidation Strategy: Sell entire business unit. Close down the business.

  37. DIVESTMENT STRATEGY - REASONS Attractive offer from other firm Better alternative for investment Concentration on core business Debt servicing problem Mismatch of business Negative cash flows Obsolete products Problem of competition Technology up gradation Returns to shareholders

  38. LIQUIDATION STRATEGY Reasons: Accumulated losses Offer for better price Difficult to manage due to decline sales and low profits Future of business not certain Does not match with current line of business Legal Aspect: Compulsory winding up under the court order Voluntary winding up: members, creditors Voluntary winding up under the supervision of the court

  39. RESTRUCTURING STRATEGIES 1. Mergers: Horizontal, Vertical, Conglomerate 2. Takeovers 3. Purchase of Division: one of the unit is purchased 4. Divestiture: 5. Demerger: one company split into several cos. 6. Going Public: Pvt. Co is converted public ltd. co 7. Debt-equity Swap: Converting debt capital into equity. 8. Leveraged Buyout: step by step you purchase the another company. 9. Buyback of Shares: co. purchases their own shares from the market.

  40. RESTRUCTURING STRATEGIES 10. Business Process Reengineering: change the manufacturing process 11. Downsizing: reducing the no. of employees from the org. 12. Outsourcing: some activities of the organization/business you get it done from outside 13. Rehabilitation schemes: Settlement with Creditors Divestment Strict Control over Costs Streamlining of Operations

  41. TURNAROUND STRATEGY - ESSENTIALS Communication Availability of Resources Leadership Long-term Approach Review of the Situation: Evaluation- internal and external : govt. policies, customer likes, technology, labour management relationship. Support from Various Parties: employees, sh holders, creditors, suppliers Viability of Business: feasibility,

  42. TURNAROUND STRATEGY - STEPS Setting up a Turnaround Committee: management people, consultants, employees core committee Indentifying the Causes of Losses: internal, external Investigation of Causes: detailed analysis: employees, customers, dealers Alternative Solutions: downsizing, debt equity swap, divestment, concentrate profitable segment Analysis of Alternatives: cost benefit analysis Selection of Best Alternatives: Communication of Turnaround Strategy: Organization and Allocation of Resources: Implementation Review

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