The document discusses various topics related to corporate restructuring, renewal, and strategic alliances. It provides definitions and examples of restructuring, which involves reducing the size of a firm to improve efficiency. Corporate renewal refers to turnaround management through analysis and planning. Strategic alliances are agreements between independent organizations to pursue shared objectives. They allow companies to share resources for mutual benefit while maintaining independence. The document outlines various types and provides examples of each topic.

1. CORPORATE RESTRUCTURING
CORPORATE RENEWAL
STRATEGIC ALLIANCE

2. Dr. Parveen Kaur Nagpal
RESTRUCTURING
Restructuring – also called downsizing, rightsizing, or
delaying- involves reducing the size of the firm in terms
of number of employees, number of divisions or units,
and number of hierarchical levels in the firms
organizational structure.
This reduction in size is intended to improve both
efficiency and effectiveness.
Restructuring is concerned primarily with shareholder
well-being rather than employee well-being.
Restructuring means rebuilding the firm. It is a strategy
that may be found useful in all the different phases of
the firms life cycle-initial period, growth, maturity and
decline.

3. Dr. Parveen Kaur Nagpal
RESTRUCTURING
Restructuring may also be found useful in dissolution or
liquidation of the company.
Restructuring broadly involves the following two
courses of actions:
 Rearrangement of the various departments or
divisions or zones of a company. It may involve
reorganization of production work or resetting of
marketing work -structure.
 Reallocation of resources and their development.
Example: Reliance Industries Limited (RIL)

4. Dr. Parveen Kaur Nagpal
AIMS OF RESTRUCTURING
 Better utilization of available resources
 To focus on core strengths, operational synergy, and
efficient allocation of managerial capabilities and
infrastructure.
 Achieve economies of scale by expansion,
diversification
 Revival and rehabilitation of sick units
 Capital restructuring by appropriate mix up of loans
and equity capital
 Enhance goodwill of the firm.
 To overcome the problem of debt burden.

5. Dr. Parveen Kaur Nagpal
NEED FOR RESTRUCTURING
 Growth and Expansion
 Changed Nature of Business
 Corporate Image (E.g. ITC)
 Downsizing
 Competitive Advantage
 Quality Management
 Obsolete Products
 Statutory and Legal Compliance

6. Dr. Parveen Kaur Nagpal
FORMS OF RESTRUCTURING
I. Restructuring on the Basis of Expansion
a) Mergers - process whereby two companies combine
to form a single company.
b) Amalgamation-When two or more companies lose
their own individual identity and form a new
company to take over the business of the companies
being liquidated
c) Takeover - When the acquisition is forced or
unwilling
d) Tender Off - Formal offer to purchase a given
number of company’s share at a specific price. Eg:
Tata Tea consolidated Coffee Limited where more
than 50% of the shareholders of Coffee Limited sold
to Tata Tea at an offered price.

7. Dr. Parveen Kaur Nagpal
FORMS OF RESTRUCTURING
II. Restructuring on the Basis of Contraction
a) Spin Off - This involves division of a company into a
wholly owned subsidiary of parent company by
distribution of all the shares of the subsidiary
company on pro-rata basis. Eg: Kotak Mahindra
Finance Ltd. formed a subsidiary - Kotak Mahindra
Capital Corporation by spinning off its investment in
banking division
b) Equity Carve Outs - The firm sells a part of its wholly
owned subsidiary’s common stock in the market
generally less than 20%. It is similar to the spin off
except some part of the share holders of this
subsidiary company is offered to the public through a
public issue and the parent company continues to
enjoy control over the subsidiary company.

8. Dr. Parveen Kaur Nagpal
FORMS OF RESTRUCTURING
c) Split Ups - It involves the division of parent company
into two or more separate companies where the
parent company ceases to exists.
d) Divestures - A particular segment of a company is sold
for cash or security to an outside party. Divestures can
be for reduction of losses, raising of capital, efficiency
improvement.

9. Dr. Parveen Kaur Nagpal
FORMS OF RESTRUCTURING
III. Restructuring on the Basis of Changes in Ownership
a) Leveraged Buyout - Takeover of a company that
utilizes mainly debt to finance the buyout.
b) Going Private - Transformation of the public
company into a privately held firm.
c) Buy Back of Shares - Procedure that enables a
company to go back to its shareholders and offer to
purchase the shares held by them.

10. Dr. Parveen Kaur Nagpal
CASE – GILLETTE INDIA LTD. (GIL)
Gillette Company entered the Indian market in 1984
through a joint venture as a minority shareholder and
then garnered shares, so that it had three-fourths of the
shares by 2002. During these two decades, Gillette
followed inorganic growth by acquiring domestic
companies in oral care, battery, blades and razors and
stationery business. This diversification resulted in
adding flab to the company's costs. With operating
profits coming down, the company engaged in a
restructuring exercise, which resulted in selling the
same businesses the company had acquired. The
restructuring was successful and in 2003 GIL made a
turnaround with net profit growth being the highest in
the two decades of the company's presence in India.

11. Dr. Parveen Kaur Nagpal
CORPORATE RENEWAL
Corporate renewal refers to turnaround management.
It uses analysis and planning to save companies facing
problems and returns their solvency, by identifying the
reasons for failing performance in the market, and
taking steps to rectify them.
Turnaround management involves management review;
root failure causes analysis, and SWOT analysis to
determine the reasons of failure of the company.
Once analysis is completed, a long term strategic plan
and restructuring plans are created.

12. Dr. Parveen Kaur Nagpal
CORPORATE RENEWAL
The plans are approved by the turnaround professionals
they begin to implement the plan, continually review its
progress and make changes so as to ensure that the
solvency of the company returns back.
Examples:
Reviving Khadi in India
Netflix’s rapid shift from DVD rental to streaming

13. Dr. Parveen Kaur Nagpal
CAUSES OF CORPORATE RENEWAL
Internal Causes External Causes
• Lack of Vision
• Production related issues - faulty
product designs, problems in
production planning and control
etc.
• Marketing related issues - Poor
promotion mix, faulty pricing,
wrong channel of distribution etc.
• Finance Related issues - Obtaining
finance from the right source at
the right price, poor application of
funds etc.
• HR related issues - Problems in
the recruitment process, lack of
training
• Defective strategy
• Lack of Management Support
• Toxic Culture
• Competition
• Labour Issues
• Changes in Technology
• Recession
• Changes in Government Policies
• Poor Professional Advice
• Infrastructural Problems
• Political Instability

14. Dr. Parveen Kaur Nagpal
TECHNIQUES OF CORPORATE RENEWAL
 Retrenchment
 Repositioning - Also known as "entrepreneurial
strategy”, focuses on revenue generation through new
innovations and change in product portfolio and
market position
 Replacement - Top managers or the Chief Executive
Officer (CEO) is replaced by new ones. This
turnaround strategy is used as new managers bring
recovery and a strategic change as a result of their
different experience and backgrounds from their
previous work.

15. Dr. Parveen Kaur Nagpal
STRATEGIC ALLIANCE
A strategic alliance is an agreement between two or
more parties to pursue a set of agreed upon objectives
needed while remaining independent organizations.
It is an arrangement between two companies that have
decided to share resources to undertake a specific,
mutually beneficial project.
The strategic partners maintain their status as
independent and separate entities, share the benefits
and control over the partnership, and continue to make
contributions to the alliance until it is terminated.

16. Dr. Parveen Kaur Nagpal
STRATEGIC ALLIANCE
Strategic alliance can be described as “a process
wherein participants willingly modify their basic
business practices with a purpose to reduce duplication
and waste while facilitating improved performance”
(Frankel, Whipple and Frayer, 1996)
For instance, a company manufactures and distributes a
product in the United States and desires to sell it in
other countries. Another company wants to expand its
product line with the type of product the first company
creates, and has a worldwide distribution channel. The
two companies establish an alliance to expand the
distribution of the first company’s product.

17. Dr. Parveen Kaur Nagpal
STRATEGIC ALLIANCE
 ICICI Bank and Vodafone India: ICICI Bank, India’s
largest private sector bank and Vodafone India, one of
India’s largest telecom service providers, entered into
a strategic alliance to launch a unique mobile money
transfer and payment service called ‘m-pesa’.
 Starbucks and Tata Coffee Limited, Asia's largest coffee
plantation company, have signed a strategic alliance
agreement to further build Starbucks' brand in India
 Spotify and Uber Strategic Alliance: The power to
enter a hired car welcomed by your favorite playlist
provides extra value, significant competitive
advantage and exclusivity for Uber cars. For Spotify, it
offers an incentive for users to upgrade to the
premium level.

18. Dr. Parveen Kaur Nagpal
ADVANTAGES OF STRATEGIC ALLIANCE
Shared Risk and Knowledge
Opportunities for Growth
Advantage of Goodwill
Access to Resources
Access to Target Markets
Economies of Scale
Competitive Advantage
Expands Customer Base
Improve Quality

19. Dr. Parveen Kaur Nagpal
LIMITATIONS OF STRATEGIC ALLIANCE
 Poaching Talent
 Conflicts
 Delay in Implementation
 Business Secrets may be Leaked
 Uneven Alliance
 Clash of Cultures
 Opportunity Costs - Focusing and committing is
necessary to run a strategic alliance successfully but
this might discourage from taking other beneficial
opportunities.
 Foreign Confiscation - If a Co. is engaged in a foreign
country, there is risk that the government of this
country might try to seize this local business so that
the domestic company can have all market on its own.

20. Dr. Parveen Kaur Nagpal
TYPES OF STRATEGIC ALLIANCE
 Joint Venture
A joint venture is established when the parent
companies establish a new child company.
 Equity Strategic Alliance
An equity strategic alliance is created when one
company purchases a certain equity percentage of the
other company. If Company A purchases 40% of the
equity in Company B, an equity strategic alliance would
be formed.
 Non-equity Strategic Alliance
A non-equity strategic alliance is created when two or
more companies sign a contractual relationship to pool
their resources and capabilities together.

21. Dr. Parveen Kaur Nagpal
TYPES OF STRATEGIC ALLIANCE
Michael Porter and Mark Fuller, founding members of
the Monitor Group, classify Strategic Alliances on the
basis of purpose as follows:
Technology Development Alliances
Which are alliances with the purpose of improvement
in technology and know-how.
Operations and Logistics Alliances
Where partners either share the costs of
implementing new manufacturing or production
facilities, or utilize already existing infrastructure in
foreign countries owned by a local company.

22. Dr. Parveen Kaur Nagpal
TYPES OF STRATEGIC ALLIANCE
Marketing, Sales and Service Strategic Alliances
In which companies take advantage of the existing
marketing and distribution infrastructure of another
enterprise in a foreign market. This is done to facilitate
easy access to these markets and quick distribution of
the products.
Multiple Activity Alliance
Those which connect several types of alliances.
Marketing alliances most often operate as single
country alliances, international enterprises use several
alliances in each country and technology and
development alliances are usually multi-country
alliances.

23. Dr. Parveen Kaur Nagpal
PROBLEMS OF STRATEGIC ALLIANCE
 Inability to gauge the market prospects
 Failure to locate the right partners
 Lack of planning
 Inadequate resources
 Conflicting views
 Lack of trust
 Absence of Governance
 Subsequent backing out of the local partners
 Difference in Government regulations
 Inability of the Indian companies to adjust themselves
to a new marketing environment
 Lack of Cultural Awareness

24. Dr. Parveen Kaur Nagpal
STRATEGIC ALLIANCE
Unsuccessful Strategic Alliance due to Cultural
Differences and Breach of Rules
In December 2009, Volkswagen AG of Germany
purchased a 19.9% stake in the Japanese
manufacturer Suzuki Motor Corporation (Suzuki).
They both agreed to share their technologies and
distribution network with each other.
While VW agreed to provide its hybrid and electric
technologies along with access to global markets to
Suzuki, Suzuki agreed to provide VW with access to its
small-displacement motors and Indian presence.
However, both the auto manufacturers failed to reach
an agreement on any of their proposed goals.

25. Dr. Parveen Kaur Nagpal
STRATEGIC ALLIANCE
Suzuki served notice of breach of contract to VW in
October 2011 stating that VW had not given it access
to the hybrid technology which it had promised.
Similarly, VW accused Suzuki of violating the
agreement by procuring diesel engines from Fiat.
Further fueled by the cultural differences and failed
joint business proposals, the partners, on November
18, 2011, terminated the framework agreement and
Suzuki demanded that VW return its 19.9%
shareholding in the company.
VW's refusal to do so led to Suzuki filing for
international arbitration.

26. Dr. Parveen Kaur Nagpal
PUBLIC PRIVATE PARTICIPATION (PPP)
Public Private Partnership means an arrangement
between a government owned entity on one side and
a private sector entity on the other, for the provision
of public assets and/or services, through investments
being made and/or management being undertaken by
the private sector entity, for a specified period of time.
Where there is well defined allocation of risk between
the private sector and the public entity and the
private entity receives performance linked payments
that conform to specified and pre-determined
performance standards, measurable by the public
entity or its representative.

27. Dr. Parveen Kaur Nagpal
PUBLIC PRIVATE PARTICIPATION
It is a venture that is funded and operated through
partnership of government and one or more private
sector companies.

28. Dr. Parveen Kaur Nagpal
IMPORTANCE OF PUBLIC PRIVATE PARTICIPATION
Value for Money
Cost Recovery
Performance Based Measurement and Incentives
Quality Enhancement
Competition
Cost Efficiency
Reduction in Public Treasury
Improved Response to Market Forces
Broad Support

29. Dr. Parveen Kaur Nagpal
PROBLEMS ASSOCIATED WITH PPP
 High cost of Operations
 Reduced Competitiveness
 Complicated and Lengthy Process
 Lack of Capacity
 Over-reliance on External Consultants
 Rigidity
 Delays and hold ups
 Lack of Transparency
 Political Interference
 Biased Decision

30. Dr. Parveen Kaur Nagpal
GOVERNING STRATEGIES OF PPP MODEL
 Clarity of Contractual Terms: The PPP must focus on
achievement of the final outcomes. There must be a
proper allocation of risk between the government and
the private sector.
 Resource Availability with the Public Sector: The public
sector must possess the adequate amount of
resources for the smooth completion of the work.
 Transparency in Dealings: Transparency in operations
not only enhances the accountability but also leads to
ethical conduct of the business activity. It is central for
good governance and building up the market
confidence.

31. Dr. Parveen Kaur Nagpal
GOVERNING STRATEGIES OF PPP MODEL
 Integration of Activities: Smooth coordination
between government departments and private sector
is needed to ensure economic and social well-being.
 Focus on Issues Central to the Project: Before
undertaking any kind of project it must be appraised
from the financial, social, technical and managerial
angle. A detailed feasibility report must be prepared
to avoid problems that may crop up later.
 Entrepreneurship and Effective Leadership: There
must be free flow of communication across various
levels in the organization. This will not only lead to
greater bonding between people but also help them
to develop a better culture.

32. Dr. Parveen Kaur Nagpal
GOVERNING STRATEGIES OF PPP MODEL
 Stable Political Environment: Economic growth and
political stability are deeply interconnected. On the
one hand, the uncertainty associated with an unstable
political environment may reduce investment and the
pace of economic development. On the other hand,
poor economic performance may lead to government
collapse and political unrest.
 Effective Dispute Resolving Mechanism: The dispute
resolving machinery is necessary for enforcing the
rules and regulations to ensure smooth flow of
business activities. Disputes if not solved on time may
lead to discontent among the employees, thereby
affecting their morale

33. Dr. Parveen Kaur Nagpal
PPP IN INDIA
PPP in India gained momentum after the New Economic
Policy, 1991.
More than 50% of the PPP models were adopted in
Maharashtra and in 2000 other states like Karnataka,
Madhya Pradesh, Gujarat and Tamil Nadu also adopted
the same.
Sectoral wise composition of PPP gives priority to the
development of roads, ports, power, irrigation,
telecommunication, water supply, healthcare, tourism,
housing and urban development etc.
The data regarding various PPP is collected and collated
from the different government agencies and investors.

34. Dr. Parveen Kaur Nagpal
ADVANTAGES OF IT DRIVEN STRATEGIES
 Increased Communication
 Better Inventory Management
 Effective Data Management
 Customer Relationship Management
 Management Information System
 Business Growth and Survival
 Decision Making
 Resource Management and Globalization
 Improved Innovation

35. Dr. Parveen Kaur Nagpal
LIMITATIONS OF IT DRIVEN STRATEGIES
 Over Reliance of Technology
 Loss of Communication Skills
 Job losses
 Implementation Expenses
 Loss of Personal Touch
 Health Problems
 Privacy
 Lack of Job Security
 Dominant Culture

36. Dr. Parveen Kaur Nagpal
CONTRIBUTION OF IT SECTOR IN INDIA
 Contribution to GDP
 Contribution to Employment
 Foreign Direct Investment
 Boost to Start ups
 Contribution to Education sector
 Contribution to Online Trading
 Contribution to Banking
 Contribution to other sectors

37. Dr. Parveen Kaur Nagpal
1. Strategic Management - Fred R. David, Published by
Prentice Hall International.
2. Business Policy and Strategic Management - Dr. Azhar
Kazmi, published by Tata McGraw Hill Publications
3. Nagpal, Sharma: Strategic Management, SYBMS (Sem.
3), Sheth Publishers
4. Nagpal, Shelankar, Sharma: Strategic Management,
M.Com (Sem. 3), Sheth Publishers
REFERENCES

38. Dr. Parveen Kaur Nagpal
THANK YOU
www.linkedin.com/in/dr-parveen-kaur-nagpal-82965b15