RESTRUCTURING FOR STRATEGIC GROWTH Dr. Joachim Behrendt
Dec 16, 2015
RESTRUCTURING FOR STRATEGIC GROWTHDr. Joachim Behrendt
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 2Restructuring for Strategic Growth
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 3Restructuring for Strategic Growth
FIN
AN
CIA
LC
RISIS
& W
OR
LDR
ECESSIO
NS&P 500 / FTSE 100 / Hang Seng
After the subprime crisis and the collapse of Lehman Brothers, the meltdown of the world financial system could only be avoided by concerted and strong action of central banks and governments
In addition to putting interest rates close to 0, central banks pumped liquidity at a previously unknown pace into the economy (quantitative easing), governments rescued failing banks, and accounting rules for banks were changed
The world financial crisis was followed by a deep world recession, simultaneously effecting nearly all countries and all sectors
To speed up the recovery process, governments implemented fiscal stimulus packages for supporting private consumption and exports
Since first quarter of 2009, stock markets and business confidence started to recover
3/22/2010 4Restructuring for Strategic Growth
Source: FT / Thomson Reuters
FIN
AN
CIA
LC
RISIS
& W
OR
LDR
ECESSIO
NGold / VIX / Employment
Gold, traditionally a safe haven in times of high economic uncertainty, remains at an all-time high
The VIX volatily index, Wall streets fear gauge, is still very volatile, and has risen again 36% since 19.1.2010, while the Baltic Dry Index fell 20% since then
Companies returned to profitability in 2009 mainly due to strict cost and capacity cutting
Consequently, unemployment rates are rising, depressing a consumption-based economic recovery
Fiscal stimulus effects are coming to an end, putting further pressure on consumption
3/22/2010 5Restructuring for Strategic Growth
Source: FT / Thomson Reuters / I-Spirit
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CIA
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& W
OR
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NEconomic Outlook Europe
3/22/2010 6Restructuring for Strategic Growth
The economic outlook remains patchy, governmental debt comes into the spotlight
The underlying reasons of the financial crisis, excess liquidity and a loose regulatory framework, have only partly been tackled; cheap liquidity is still provided by central banks and governments
In the mid run, central banks will have to take liquidity out of the markets in order to counteract upcoming inflationary trends
In the mid run, increased government debt has to be repaid, again decreasing liquidity
Currently, financial markets take again the same medicine that made them ill
FIN
AN
CIA
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RISIS
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OR
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NA New Economic Environment Some Hypotheses
1. The recovery of the stock markets is driven by yield-searching liquidity, and it is not fully reflecting economic reality. Higher company valuations are partly based on higher earnings, but they are mainly the result of cost cuttings and not of a demand- and sales-driven growth ("zero-job growth").
2. The worst of the crisis seems to be over, but the effects of upcoming inflationary pressures, governmental debt burdens and the resulting liquidity reductions and austerity measures are currently not priced in. In general, the road to recovery will be long, slow and patchy.
3. Economic recovery will occur faster in developing economies, especially in countries that have healthy budgets and balances of payments, and that are rich in commodities. USA will follow, Western Europe will be at the end of the train.
4. Companies and governments are using the current situation to borrow longterm for cheap. On the other hand, these additional funds available will lead to an increased pressure for profitable investments and, among others, increased M&A activities.
5. The current crisis marks the beginning of the end of the dominating economic position of the Western World, and of the outstanding role of the US-$ as the global reserve currency.
3/22/2010 7Restructuring for Strategic Growth
FIN
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NEconomic Indicators Turkey
Economic discussions are currently dominated by policy uncertainties and an upcoming election year
Ending the discussions with the IMF on a standby agreement had virtually no effect, treasury could comfortably meet its borrowing requirements
After recent rating upgrades, Turkey is on the way to become an investment grade country
Inflationary pressures increased but can probably be well maintained in the upcoming months
Production is on its way back to sustainable growth, currently mainly domestic-driven (chemical goods, agriculture, but not automotive, metals)
Inflation and production growth increase the pressure on the Central Bank to increase interest rates in the next months, yield curve is steepening
Economic recovery helped to increase the tax income, main fiscal risk factor is election spending
Exports and imports started to recover, balance of payments currently under control
Compared to other countries, Turkey could maintain and even improve its relative stability
3/22/2010 8Restructuring for Strategic GrowthSource: Turkstat, ISE, ING Bank
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NKey Indicator Forecasts (Turkey)
3/22/2010 9Restructuring for Strategic Growth
Sources: Turkstat, CBT, Treasury, Ministry of Finance, ING Bank , ING Global Forecasts
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 10Restructuring for Strategic Growth
A Z
ERO
-BA
SEA
PP
RO
AC
HTurkish Textile Industry
In 2008, the Turkish textile sector was hit hardest in terms of production cuts. In 2009, clothing experienced a modest recovery relative to other sectors
Capacity usage, on the other hand, remained virutally unchanged probably due to heavy capacity cuts
More than 150,000 people lost their jobs in textile and clothing sector in the last year
Textile companies started applying for short working hours, supported by IKur
Textile exports have dropped by 30% -but not more than other sectors
However, in 2009, prices in the sector have dropped by more than 5%, showing increased pricing pressure
On the other hand, companies in the sector have used the crisis for successful restructuring, and for expanding into foreign markets
3/22/2010 11Restructuring for Strategic Growth
Source: DPT, Ekonomik Gelismeler, Eyll 2009
A Z
ERO
-BA
SEA
PP
RO
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HImplications for Textile Businesses
3/22/2010 12
Strategic Challenges
Bank loans expensive
and difficult to obtain Sector
remains under-
capitalized, growth difficult
Pressure on informal
parts of the sector will increase
Sales will remain
suppressed for some
time
Significant Overcapa-
cities in the sector
Change of regional demand patterns
(US, Europe vs. Asia)
Strong price pressure , especially from Asian countries
Restructuring for Strategic Growth
A Z
ERO
-BA
SEA
PP
RO
AC
HThe Risk of Strategic Drift
3/22/2010 13Restructuring for Strategic Growth
Phase 1: Incremental strategy changes gradually moving away from environmental changes
(e.g. victim of own success)
Phase 2: Strategic drift becomes apparent, or environmental change increases no clear
strategy direction, fluxx
Phase 3: Transformational change to adopt to new environment but late and costly
Phase 4: Alternatively, demise of the organization
Target: Phase 5 early transformational change ahead of environmental change
Source: Johnson / Scholes, Exploring Corporate Strategy
A Z
ERO
-BA
SEA
PP
RO
AC
HZero-Base Approach to Strategy Development
Zero-Base Strategy Development
Question your markets and target customers
Question your products and services
Question your pricing and quality strategy
Question scope and structure of your value chains
Question your existing production capacities
Question your workforce
Question your management and organizational structure
Imagine you could set up your business from scratch
3/22/2010 14Restructuring for Strategic Growth
Zero-based budgeting is a technique of planning and decision-making which reverses the working process of traditional budgeting. In traditional incremental budgeting, departmental managers justify only increases over the previous year budget and what has been already spent is automatically sanctioned. By contrast, in zero-based budgeting, every department function is reviewed comprehensively and all expenditures must be approved, rather than only increases. Zero-based budgeting requires the budget request be justified in complete detail by each division manager starting from the zero-base.
(Source: Wikipedia)
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HStrategy Development Phases
Analysis of the environment: Opportunities and threats
Analysis of strategic capabilities: Strengths and weaknesses
Analysis of relevant stakeholder groups and their expecations
Phase 1:Strategic Analysis
Definition of the framework for strategic choice (scope of activities, markets, geographical scope, ownership structure, finances, etc.)
Development of strategic options
Evaluation and selection of strategic options
Phase 2:Strategic Choice
Organizational structure
Resource allocation
Resource control
Management of strategic change
Phase 3:Strategy
Implementation
3/22/2010 15Restructuring for Strategic Growth
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 16Restructuring for Strategic Growth
23
Detailed Statistics by StoresQuarterly Averages of Visitors (1)
Champ
Quarter Aks. Ere. Mer. Mal. Umr. Sis. KC-1 KC-2 KC-3 Ave.
09:00-09:14 2,5 1,8 2,2 3,7 1,9 2,9 1,0 0,4 1,1 1,9
09:15-09:29 2,6 2,4 2,6 4,5 1,8 1,6 1,1 0,5 0,8 2,0
09:30-09:44 3,1 2,7 3,0 4,6 1,9 1,7 1,3 0,6 1,0 2,2
09:45-09:59 3,1 2,9 3,6 6,0 1,7 2,8 1,6 0,3 1,3 2,6
10:00-10:14 3,6 3,3 4,0 6,5 1,3 2,3 1,3 0,6 0,9 2,7
10:15-10:29 4,1 3,2 3,5 7,5 1,4 2,6 1,2 0,6 1,5 2,9
10:30-10:44 4,6 3,2 3,1 6,8 1,8 3,2 1,6 0,9 1,3 3,0
10:45-10:59 4,0 3,3 4,2 8,1 1,6 3,1 1,7 0,7 1,1 3,1
11:00-11:14 4,8 3,4 3,9 9,1 2,1 3,6 1,9 0,9 1,6 3,5
11:15-11:29 4,8 3,4 2,9 8,8 2,1 3,8 1,9 1,0 1,5 3,4
11:30-11:44 4,7 3,6 4,3 9,8 2,8 4,5 1,9 0,9 1,7 3,8
11:45-11:59 6,5 3,0 5,3 9,5 2,9 3,5 2,0 0,9 1,7 3,9
12:00-12:14 6,4 4,5 5,9 11,3 3,2 3,9 2,3 0,7 2,1 4,5
12:15-12:29 8,6 3,7 6,0 13,7 2,8 5,7 1,8 0,8 1,5 5,0
12:30-12:44 6,6 3,4 6,5 13,4 2,4 8,1 3,4 1,1 2,2 5,2
12:45-12:59 6,9 3,4 7,1 14,5 4,1 6,2 3,0 1,6 2,2 5,5
13:00-13:14 7,4 4,1 5,3 14,1 4,4 5,7 3,9 1,5 2,1 5,4
13:15-13:29 6,8 4,4 6,3 15,1 4,2 6,1 4,0 1,9 2,1 5,7
13:30-13:44 6,5 4,4 6,3 15,2 4,6 6,1 3,1 1,5 2,1 5,5
13:45-13:59 7,1 3,4 6,3 13,3 3,8 6,1 3,5 1,8 1,6 5,2
14:00-14:14 9,8 3,8 7,0 13,6 3,9 8,1 3,3 1,4 2,1 5,9
14:15-14:29 8,4 3,8 6,0 11,6 3,7 7,3 2,9 1,9 2,4 5,3
14:30-14:44 9,2 3,6 6,5 13,8 3,7 9,3 2,9 1,5 2,2 5,8
14:45-14:59 8,2 3,6 5,0 14,2 3,6 6,9 2,8 1,3 2,2 5,3
15:00-15:14 8,5 3,4 6,6 12,2 4,0 6,1 3,0 1,7 2,1 5,2
15:15-15:29 6,6 3,9 6,8 15,4 4,1 7,6 3,8 2,0 2,4 5,7
BimCarrefour ExpMigros
STR
ATEG
ICA
NA
LYSIS
& O
PTIO
NS
Analysis Example: Market Research Retail
3/22/2010 17Restructuring for Strategic Growth
Strategic analysis is looking from
customer market perspective
Key to strategic analysis: comprehensive
market research
Example: Shopper Trends (Nielsen)
Example: Market research for
number of store visitors and daily
distribution according to age and
gender (nexum / Akademetre)
11
General Statistics by MarketsDaily Distribution of Visitors
6.0
11
6.0
29
2.2
19
2.5
97
6.2
08
5.4
97
2.5
01
2.0
98
5.8
44
5.8
00
2.4
70
2.0
50
5.8
73
3.9
87
2.4
82
2.1
05
5.7
07
4.6
80
2.4
48
2.2
09
7.5
63
7.2
19
4.1
27
2.6
03
7.6
28
3.5
71
2.3
10
8.8
54
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
Migros Carrefour Exp ChampionSA Bim
Market
Nu
mb
er o
f V
isit
ors
15.01.07 16.01.07 17.01.07 18.01.07 19.01.07 20.01.07 21.01.07
6
M Migros / Erenkoy
AkademetreCurrent Views of the Stores
BIM / K.Cekmece-1
BIM / K.Cekmece-2
BIM / K.Cekmece-3
Carrefour Express / Maltepe
ChampionSA / Sisli
Carrefour Express / Umraniye MM Migros / Aksaray
MMM Migros / Merter
STR
ATEG
ICA
NA
LYSIS
& O
PTIO
NS
SWOT Analysis Textile Industry
3/22/2010 18Restructuring for Strategic Growth
Developed market infrastructure
Ability to adopt new technologies & trends
Adoptation of EU standards
(e.g. environment)
Developed sectoral labor force
Entrepreneurial spirit
Abundance raw materials (e.g. cotton)
Modern machinery & equipment
Elasticity and flexibility
Input costs, especially labour & energy
Insufficient proprietary / venture capital
Deficiencies cash / financial management
Lack of access to distribution channels
Large informal market segments
Lack of R&D & established quality control
Burdensome bureaucracy, insufficient
legal infrastructure & copyright protection
Insufficient process & IT management
Price competition China / other
Asian countries
Taxation / Export-import legislation
Political instability foreign relations
Lack of resources
Restrictions on free trade
Development of EU relations
Scarce, expensive, short-term financing
Overvalued currency
Geographical proximity to EU, Middle East
and ex-Soviet countries
Developing relationships regional countries
Increasing opportunities to penetrate new
markets due to quota removals
Small-scale production support exclusive
demand
Turquality
Absorb job losses from developed countries
ST
RE
NG
TH
S
Source: Kocak, A.M., Turkey in
Transition, January 2006; Own
research
Outside-inn view: Markets
Inside-out view: Resources
STR
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NA
LYSIS
& O
PTIO
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Options for Strategic Growth
3/22/2010 19Restructuring for Strategic Growth
The growth trap
Customer focus is misinterpreted as
serving all customer needs
Growth pressure or the apparent
saturation of the target market often lead
managers to broaden the companys
strategic position
Too often efforts to grow may undermine
the strategy by blurring uniqueness,
Rather deepen the strategic position than
broadening and compromising it
Ways to grow
Internal development
Acquisition
Joint venture / alliancesSource: Johnson / Scholes, Exploring Corporate Strategy
STR
ATEG
ICA
NA
LYSIS
& O
PTIO
NS
Ways for Healthy Growth
Own branding
Move from contract production to brand ownership
Examples: Vakko, Mavi, LTB, Collins, Balizza, Mudo (home textiles), ...
Foreign outlets
Mainly after domestic branding succeeded, especially Russia / Ex-Soviet countries
Examples: Mavi, Colins, Bilsar, Kiili, Sarar, Sabra, Sabri zel, Cross Jeans, T-Box, ...
Foreign investments / subcontracting
Directly investing in foreign countries, or entering into long-term partnerships
Examples: Baha Tekstil (Uzbekistan), Atateks (Jordan), ahnler (China etc.), ....
Differentiation by design influence fashion
Some companies hired well-known designers, or use top models
Examples: Vakko, Balizza, Zeki Triko
3/22/2010 20Restructuring for Strategic Growth
STR
ATEG
ICA
NA
LYSIS
& O
PTIO
NS
Ways for Healthy Growth (contd)
Subcontracting for international brands
Production, sometimes distribution for foreign brands
Examples: Yeim Tekstil (Nike, Banana Republic etc.), Orta Anadolu Group (Levi
Strauss, Marks&Spencer), etc.
Technical and functional textiles
Fields: Agriculture, building technologies, geology, medical uses, ecology, packing
industry, protective clothing, sportive clothing, ....
Markets both domestic (e.g. Armed Forces) and foreign (e.g. glass fibers)
Highly automated integrated production facilities
Target: shift from labour- to capital-intensive production
Examples: Bossa Denim, Isko, Gap Gneydou
3/22/2010 21Restructuring for Strategic Growth
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 22Restructuring for Strategic Growth
STR
ATEG
YE
VA
LUA
TION
Strategy Evaluation
Does the strategy fit with organization and environment?
Screening and ranking of the available strategic options
Scenario planning
Suitability
Profitability analysis
Cost-benefit analysis
Risk analysis: Sensitivity analysis / simulation modelling
Stakeholder reactions (political dimension)
Acceptability
Funds flow analysis / liquidity planning
Break-even analysis
Resource deployment analysisFeasibility
3/22/2010 23Restructuring for Strategic Growth
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YE
VA
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Suitability: Product Lifecycle Analysis
3/22/2010 24Restructuring for Strategic Growth
Not every growth strategy fits to every product
Product lifecycles reduce strategic options
Source: Johnson / Scholes, Exploring Corporate Strategy
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YE
VA
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TION
Suitability: Sustainability of Core Competencies
3/22/2010 25Restructuring for Strategic Growth
Choice of strategy depends on sustainability of base competencies
Is the
competence
valuable?
Is the
competence
rare?
Is the
competence
difficult to
imitate?Are there no
substitutes?
no
no
no
no
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes Yes
Disadvantage
Parity
Temporary
Advantage
Incremental
Advantage
Sustainable
Advantage
STR
ATEG
YE
VA
LUA
TION
Acceptability: Profitability
3/22/2010 26
Carve Out Object 1 - Income Statements - Modul 8
2007 2008 2009 2010 2011 2012 2013
01-12 01-12 01-12 01-12 01-12 01-12 01-12
T Ist Ist Budget Planung Planung Planung Planung
Nettoumsatz 12,150,665 14,278,000 16,183,752 16,624,456 17,300,355 17,973,886 18,649,304
Wareneinsatz -9,889,251 -11,950,316 -13,539,521 -13,978,107 -14,554,434 -15,160,772 -15,752,529
Warengruppenspanne 2,261,413 2,327,684 2,644,231 2,646,350 2,745,921 2,813,114 2,896,774
Nicht kalkulierte Vergtungen 219,045 151,530 150,331 170,741 176,542 182,258 187,715
Logistikkosten -278,957 -100,380 -180,592 -116,000 -137,227 -129,218 -133,816
Inventurdifferenzen -42,115 -55,161 -55,548 -57,962 -59,721 -61,539 -63,336
-102,026 -4,011 -85,810 -3,221 -20,407 -8,499 -9,438
Rohertrag 2,159,387 2,323,673 2,558,421 2,643,129 2,725,514 2,804,615 2,887,337
Personalkosten -1,051,694 -1,205,040 -1,301,078 -1,330,691 -1,358,563 -1,392,016 -1,427,982
Deckungsbeitrag 1 1,107,693 1,118,633 1,257,343 1,312,438 1,366,952 1,412,599 1,459,355
Abschreibungen -98,219 -102,194 -117,797 -126,572 -128,779 -131,008 -133,242
Mietkosten -426,140 -461,986 -525,172 -532,194 -549,517 -564,470 -582,105
Werbung -52,403 20,891 -7,697 -4,860 -3,425 -1,945 -452
Instandhaltung -63,250 -76,341 -118,249 -84,937 -90,980 -93,232 -95,882
Materialverbrauch -28,603 -38,170 -36,867 -35,258 -36,109 -36,976 -37,860
Fuhrpark -165,139 -199,014 -225,613 -232,735 -236,818 -245,003 -255,888
Sonstige Sachkosten/Ertrge -66,385 -88,602 -252,993 -77,902 -78,045 -78,196 -78,350
Sonstige operative Posten 64,048 16,748 175,802 339 339 339 339
Operative Kosten -836,091 -928,669 -1,108,586 -1,094,118 -1,123,332 -1,150,490 -1,183,439
Deckungsbeitrag 2 271,602 189,964 148,758 218,320 243,619 262,109 275,916
Direktkosten 0 - - -0 -0 -0 0
Deckungsbeitrag 3 271,602 189,964 148,758 218,320 243,619 262,109 275,916
Indirekte Kosten -11,305 - - - - - -
DB 4 - EBITA 260,296 189,964 148,758 218,320 243,619 262,109 275,916
Bereinigungen/Anpassungen -36,297 -4,400 - - - - -
Bereinigtes/angepates EBITA 224,000 185,564 148,758 218,320 243,619 262,109 275,916
Zinsergebnis -13,173 -29,021 -21,655 -23,821 -23,907 -23,996 -24,090
Beteiligungsergebnis - - - - - - -
Abschreibungen a.d. FAV - -2,000 - - - - -
Finanzergebnis -13,173 -31,021 -21,655 -23,821 -23,907 -23,996 -24,090
Andere auerordentliche Ergebnisse - 984 - - - - -
Ergebnis vor Ertragsteuern 247,123 159,927 127,103 194,498 219,713 238,113 251,826
Steuern - - -17 - - - -
Ergebnis nach Ertragsteuern 247,123 159,927 127,086 194,498 219,713 238,113 251,826
Kennzahlen (in % des Nettoumsatzes)
Warengruppenspanne 18.6% 16.3% 16.3% 15.9% 15.9% 15.7% 15.5%
Rohertrag 17.8% 16.3% 15.8% 15.9% 15.8% 15.6% 15.5%
Personalkosten 8.7% 8.4% 8.0% 8.0% 7.9% 7.7% 7.7%
Operative Kosten 6.9% 6.5% 6.8% 6.6% 6.5% 6.4% 6.3%
EBITA 2.1% 1.3% 0.9% 1.3% 1.4% 1.5% 1.5%
Wachstumsraten (p.a.)
Nettoumsatz k.A. 17.5% 13.3% 2.7% 4.1% 3.9% 3.8%
Warengruppenspanne k.A. 2.9% 13.6% 0.1% 3.8% 2.4% 3.0%
Rohertrag k.A. 7.6% 10.1% 3.3% 3.1% 2.9% 2.9%
Personalkosten k.A. 14.6% 8.0% 2.3% 2.1% 2.5% 2.6%
Operative Kosten k.A. 11.1% 19.4% -1.3% 2.7% 2.4% 2.9%
EBITA k.A. -27.0% -21.7% 46.8% 11.6% 7.6% 5.3%
For each strategic option, detailed financial planning required (business plan)
Based on detailed business plans, pro-forma financial statements for several periods will be prepared
Preferred: Preparation of set of integrated set of financial statements with balance sheets, income statements, indirect cash flow statements
Restructuring for Strategic Growth
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Acceptability: Risk Simulation Modelling
3/22/2010 27Restructuring for Strategic Growth
Frequency Chart
.0 0 0
.0 0 7
.0 1 4
.0 2 1
.0 2 8
0
7
1 4
2 1
2 8
-5 0 0 .0 0 -2 5 0 .0 0 0 .0 0 2 5 0 .0 0 5 0 0 .0 0
1'000 Trials 4 Outliers
Forecast: F12
Frequency Chart
.000
.007
.014
.021
.028
0
7
14
21
28
-500.00 -250.00 0.00 250.00 500.00
1'000 Trials 4 Outliers
Forecast: F12
Frequency Chart
.000
.007
.014
.021
.028
0
7
14
21
28
-500.00 -250.00 0.00 250.00 500.00
1'000 Trials 4 Outliers
Forecast: F12
Strategic option 2
provides less risk at
comparable returns
Market risk
(quantities / prices)
Raw material price risk
Personnel cost risk
Currency risks
Interest rate risk
Risks considered
STR
ATEG
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Feasibility: Cash Flow Planning
3/22/2010 28Restructuring for Strategic Growth
Nakit 10 Satclar 30
M.Kymetler 0 Avanslar 40
Alclar 30 B. Kredileri 0
Stoklar 30 Sermaye 30
S. Kym. 30
Toplam 100 Toplam 100
XYZ Proforma Bilano - 01.01.05
Aktif Pasif
Nakit 0.5 Satclar 40
M.Kymetler 0 Avanslar 50
Alclar 50 B. Kredileri 15
Stoklar 40 Sermaye 30
S. Kym. 60 Donem Kr 15.5
Toplam 150.5 Toplam 150.5
XYZ Proforma Bilano - 31.12.05
Aktif Pasif
Haslat 100
SMM 50
Brut Kar 50
Sat & Datm Gid. 10
G. Yn. Gid. 10
Amortisman 10
Faaliyet Kr 20
Finansman 4.5
Kar 15.5
XYZ Proforma Gelir Tablosu - 2005
Brt Kar 50
Alclardaki Deiim -20
Stoklardaki Deiim -10
Satclardaki Deiim 10
Avanslardaki Deiim 10
Brt Faaliyet Nakit Akm 40
Sat & Datm Gid. -10
Dier F. Giderleri ve Gel. -10
Amortisman -10
G. Vergisi 0
Faaliyet Nak it Akm 10
S. Kymet Yatrmlar -30
Yatrm Nak it Akm -30
Datlan Kar 0
Sermaye Artrm 0
Kredi Art/Azal 15
Faiz Gelir/Giderleri -4.5
Finansman Nak it Akm 10.5
Toplam Nakit Akm -9.5
Nakit Deiimi -9.5
1.1.2005 tibariyle Nakit 10
31.12.2005 tibariyle Nakit 0.5
XYZ - Proforma Nakit Akm Tablosu - 2005
Integrated pro-forma financial statements for each strategic option
Liquidity planning is integrated (indirect cash flow statements)
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 29Restructuring for Strategic Growth
RESTR
UC
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Typical Restructuring Issues Textile Sector
Insufficient funds, improper financing patterns
Competition by price
No investment in market reserach, R&D
Cost cutting by flight into informal market segments
Underestimated effects of weaknesses in quality and reliabilty
Inefficient production, non-optimized processes
No proper information about cost drivers and profitability products / customers
Insufficient investments into ERP and other IT systems
Over-centralized decision making process, lack of professional managers
3/22/2010 30Restructuring for Strategic Growth
RESTR
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Restructuring
31
Replacing an existing structure with a new one- Debt (or debt-equity) restructuring- Asset restructuring- Operational restructuring- Organizational restructuring- Legal restructuring- ....
Example: Manufacturing Company 2009- Debt / Equity Structure- Cash Management- Management Accounting- Financial Accounting- Production Planning
Example: Turkish Textile Company 2009- Organization- HR- Operations- Strategy- Product portfolio
Example: Retail Group 2008- Legal- Tax- Participations- HR- Assets- Organization
3/22/2010 Restructuring for Strategic Growth
RESTR
UC
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Workstream Finance & Legal
Accounting / controlling, income statement
Accounting / controlling, balance-sheet related
Finance / Treasury: Cash man., liquidity planning
Finance: Debt & equity structure, risk management, banking & investor relations
Tax: Income taxes, VAT, special consumption taxes, stopaj, wage-based taxes, SSK&Bagkur, special restructuring tax laws
Legal: corporate law, articles of association, third-party contracts
Workstream Organization & HR
Organizational design (functional, divisional, matrix, etc.)
Organizational chart (management structure, legal structure, profit/cost center structure)
Employee analysis, legal aspects salaries & remuneration, contractual & legal rights, out-sourced personnel, relation to capacity planning
Employee analysis, abilities standarizing skill set definitions, standarizing job descriptions, key personnel definition
Workstream Operations
Sales: Forecast & scenarios, price sensitivity analysis, customer analysis
Production: High-level production planning, capacity planning
Purchasing: MRP, Supplier analysis
Overhead analysis and allocation system
Value chain analysis
Cost behaviour analysis fixed vs. variable cost in relation to time
Workstream Strategy
Strategy implemementation planning
Definition of strategic tasks
Strategic control
Change management
Markets & customers
Pricing & quality
Scope and structure of the company value chain
Financing and investments
Marketing & PR
3/22/2010 32
Each workstream provides different perspectives on the company
Each workstream is managed separately in each project phaseRestructuring for Strategic Growth
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 33Restructuring for Strategic Growth
IMP
LEMEN
TATIO
N&
CO
NTR
OL
Formalized Strategic Planning Process
Involvement of all managers, individual presentation tasks, weekend / evening sessions
Start October, completion including budget December 20043/22/2010 34Restructuring for Strategic Growth
ANALYSIS SECTION
--------------------------
1. Introduction
2. Outside-Inn Analysis: Market
2.1. Sectoral Customer Markets
2.2. Consulting Market Turkey
2.3. HR Market
3. Inside-Out Analysis: Nexum
3.1. Sales & Account Management
3.2. Profitability Analysis
3.3. Project Management
4. SWOT analysis nexum bogazici
5. Branding & Positioning
5.1. Competitor Analysis NM
5.2. Competitor Analysis IT
5.3. Positioning
6. Our Services 2003
6.1. New Media Services
6.2. IT Services
6.3. Consulting Services
7. Next Steps
PLANNING SECTION
----------------------------
1. Competence Center Pharma
2. Competence Center Tourism
3. Competence Center Textile
4. E-Learning Solutions
5. Consulting Solutions
6. IT
7. NM
8. Overall Project Management & Organization
9. Overall Marketing Strategy
10. Overall Sales Strategy
11. Eskisehir
12. Administration & Accounting
13. LoginIT
IMP
LEMEN
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N&
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Assignment of Strategic Tasks
Assignment of strategic targets and strategic tasks for every manager
Deadlines: initial January, afterwards quarterly
3/22/2010 35Restructuring for Strategic Growth
Task For
Tar-
get #
Responsible Finalization
Date
Definition of services and service levels for all services Board 15.1.
Review and adjustment of all sales materials / websites according to
service definitions
Sales 31.1.
Definition of A- and B-accounts, assignment to board members and AMs Board / Sales 15.1.
Improvements of CC file new profit center structure, services review, budget controlling tools for trainings and investments
Con 31.1.
Netsis / sales file new profit center structure reflectioin Acc Asap
Prepare sales Germany Sales / Joa 15.1.
Formalized departmental evaluation criteria HR 15.1.
Definition of quantitative targets and bonus system for AMs Sales / Board 15.1.
Transfer nectar projects and employees creative - IT Creative / IT 1.1.
Setup of organization for running complete website projects IT 31.1.
IMP
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Quarterly Review of Targets and Tasks
Quarterly presentation of managers about reaching individual strategic targets / completing individual strategic tasks
Presentation in management meetings with decision about followup measures
3/22/2010 36Restructuring for Strategic Growth
Main Objective Area Availability
Date
Nexum Bogazici Software Development Standard Usage (Java) Developm. 31.10.2002 28.02.2003
Develop & Continue Partnership Relation with MS Partnership 31.09.2002 On-going
To be Advanced Level IBM Partner Partnership N/A N/A
Develop and Implement Oracle i-store, Portal builder solutions Project N/A N/A
Complate Auction Module development : B2C->B2B Developm. 31.10.2002
Complate Work Done Automation System Developm. 31.11.2002 31.11.2002
Adaptade to MS .NET tools Developm. 31.11.2002 31.01.2003
Enrich Operating System solution platforms (XP) System 31.09.2002
Develop Expertization Level at Implementation of GoldMine CRM tool Project 31.08.2002
Learn IBM Lotus-Domino products to support E-Learning project and others? Project 31.07.2002
Learn OLAP Solutions: MIS Project 31.10.2002 31.01.2003
IMP
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TATIO
N&
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NTR
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Strategic Performance Evaluation
3/22/2010 37Restructuring for Strategic Growth
Dept. Function Persons Criterion Weight Target fig. Actual fig. Calculation Source Respon. Frequency Range % Sign
Managem.
Dept. Man.
IT Company net sales 13%
Budgeted net
sales
Actual net
sales
Actual fig. :
Target fig. Budget Didem quarterly 50 - 200 +
Company operating
P/L 13% Budgeted net P/L Actual net P/L
Actual fig. :
Target fig. Budget Didem quarterly -100 - 300 -
IT capacity usage
projects/ventures/
products 13%
Hs.*25%+#other
s*70%
Hs+all
sysads + all
others
Actual fig. :
Target fig.
Performance
control Didem quarterly 0 - 250 +
IT resource usage
projects/ventures/
products 13% 100%
Dept.Res.Use
d P/V/Pr :
Res.sched.
Actual fig. :
Target fig.
Resource
control Didem quarterly 50 - 200 -
IT output quality NA 0.25
#IT bucks
alphatesting :
IT P/V/Pr hrs
Actual fig. :
Target fig.
Error report
Alphatest
PM's,
aggregation
Didem quarterly 0 - 500 -
Personal + Manag.
Performance 25% Average 3,0
Average
evaluation 1-
4
Actual fig. :
Target fig.
Employee
evaluation
Filiz,
Joachim quarterly 33 - 133 +
Strategic Target
Performance 25% Average 3,0
Average
evaluation 1-
4
Actual fig. :
Target fig.
Strategy
review
Filiz,
Joachim quarterly 33 - 133 +
Consulting Consultant Booked Sales 10% 42.298,67
Amount own
signed offers
of month
Actual fig. :
Target fig. CRM
Tlay,
aggregation
Didem quarterly 50 - 200 +
Offer Success 10% 30%
Signed offers
month /
written offers
month
Actual fig. :
Target fig. CRM
Tlay,
aggregation
Didem quarterly 0 - 200 +
Project Milestones 10% 100%
Act.days - last
MS/start :
Proj.days
Actual fig. :
Target fig.
Resource
control Didem quarterly 75 - 150 -
Invoiced Sales 10% 38.453,33
Amount
invoiced
sales of
month
Actual fig. :
Target fig.
Workdone
Summary Didem quarterly 0-200 +
Resource usage
projects/ventures/
products 10% 100%
All
Proj.Res.Use
d P/V/Pr :
Res.sched.
Actual fig. :
Target fig.
Resource
control Didem quarterly 50 - 200 -
Rebooking rate 10% 35%
Signed offers
old cust.
month /
written offers
Actual fig. :
Target fig. CRM
Tlay,
aggregation
Didem quarterly 0 - 200 +
Personal
Performance 25% Average 3,0
Average
evaluation 1-
4
Actual fig. :
Target fig.
Employee
evaluation
Filiz,
Joachim quarterly 33 - 133 +
Strategic Target
Performance 15% Average 3,0
Average
evaluation 1-
4
Actual fig. :
Target fig.
Strategy
review
Filiz,
Joachim quarterly 33 - 133 +
AG
END
AFinancial Crisis and World Recession A New Economic Environment
A Zero-Base Approach to Strategy Development
How to Take Advantage Strategic Analysis and Strategic Options
Suitability, Acceptability and Feasibilty The Evaluation of Strategic Options
Restructuring Adopting Your Business to a Healthy Growth Strategy
Strategy Implementation and Control Managing the Workstreams
Key Success Factors The Role of the Restructuring Team
3/22/2010 38Restructuring for Strategic Growth
RESTR
UC
TUR
ING
TEA
MProject Team
Project Owner
Top management and / or company owners
Steering Committee
Project owner, board, top management
Project Management / Project Office
BIC partner
Second internal project manager (senior manager) to be provided by client
Project office staffed by BIC and by client
Project Team
Members of client team from all relevant departments
BIC consultants experienced in restructuring projects and / or relevant workstreams
Senior managers and specialists from BIC Business Network, under management of BIC project manager
Experts and interim managers from partner companies in BIC Partner Network, under management of BIC project manager
3/22/2010 39Restructuring for Strategic Growth
RESTR
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TEA
MProject Approach
Key Success Factors
Involvement of all relevant parties
Deep and broad skillsets (expert knowledge) represented in project
Confidentiality
Speed and rigid decision and implementation process
Project Management Requirements
Deep understanding of all workstreams and project issues
Application of proven project management methodology
Project manager acts as initial decision maker for all relevant decisions
Project Office
Supports project during all project phases until project completion
Provides detailed, phase- and workstream-specific project plans, task lists and checklists
Supports project status reports, status meetings, reports to steering committee, etc.
Responsible for planning and followup of tasks, timeline, budget, project success
Responsible for formalized information gathering, documentation, distribution, central point of communication
Managed by and reporting to project manager
3/22/2010 40Restructuring for Strategic Growth
RESTR
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TEA
MProject Tools
3/22/2010 41Restructuring for Strategic Growth
RESTR
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TEA
MWhy Restructuring with BIC?
Deep functional knowledge, especially in accounting, finance, and restructuring
Hands-on-approach and significant management experience
Application of solutions according to international standards customized for Turkish businesses
Comprehensive BIC Business Network and BIC Partner Network
Highly structured, proven restructuring project management approach
Commitment to speed and rigid decision and implementation process
Moderate fees and success-based fee component
3/22/2010 42Restructuring for Strategic Growth
BIC BEHRENDT INTERNATIONAL CONSULTINGDr. Joachim Behrendt
Phone: +90 212 328 1939Fax: +90 212 328 1933
www.behrendt.com.trBlog.behrendt.com.tr
Email: [email protected]