CHANGE MANAGEMENT &

TURNAROUND STRATEGY
What is
change?
 When an organizational system is disturbed by some
internal or external force, change frequently occurs.
Change, as a process, is simply modification of the
structure or process of a system. It may be good or bad,
the concept is descriptive only.

 The term change refers to any alteration which occurs

work environment of an organization.
Causes of
Change
 Technological Cause
 Desire for Growth
 Need to Improve Processes
 Government Regulations
What is Change Management
?

Change
Management

Process,
tools, Systematic
Discipline
technique approach
Classic example is
GST
 Create sense of urgency

 Building a guiding coalition

 Generating short term wins

 Enlisting a volunteer army

 Why change management is
important?
 Assessment and Motivation
 Alignment of existing resources
 Maintaining Day to Day operations
 Considering Employee concerns
 Reducing risk and inefficiency
 Reduce cost
 Increased ROI
 Opportunities to Develop more
 Principles of change
management
 Active and visible executive sponsorship
 Structured change management approach
 Engagement and integration with project management
 Employee engagement, participation and resistance management
 Frequent and open communication about the change and need for
the change
 Engagement with and support from middle management
 Dedicated change management resources and funding
 Barriers to Change
Management
 Lack of Employee Involvement
 Lack of Effective Communication Strategy
 A Bad Culture Shift Planning
Change Management
Models
Lewins Change Management
Model
1) Unfreeze- The first stage of process of change according
to Lewins Method involves preparation of change.
Communication is very vital during the unfreezing step.

2) Change- This is the stage where the real transition takes

place. employees should be reminded of the reasons for the
change and how it will benefit them once fully
implemented.

3) Refreeze- Now that the change has been accepted,

implemented the organisation begins to become stable and
gets confident of the acquired change.
 Adkar
Model
 Adkar model basically stands for

Awareness- of the need and requirement for change

Desire- to bring about change and be a participant in it

Knowledge- of how to bring about this change

Ability- to incorporate the change on a regular basis

Reinforcement- to implemented and reinforced as well

 BENEFITS OF ADKAR
MODEL
 It focuses on outcomes rather than tasks. Most change management models
focus on what needs to be done but ADKAR focuses on achieving
outcomes.
 The model makes it possible for one to break the changes into different
parts and figure out where the change may not be effective.
 It provides a clear checklist of things that need to be done to manage
change.
 This model allows leaders and change management teams to focus their
activities on what will drive individual change and therefore achieve
organizational results.
 Challenges faced by leaders in Change
Management
 Handle resistance with patience

 Manage conflicts

 Deal with setback

 Protect your team

 Look ahead
Turnaround
Strategy
 Definition of Turnaround
strategy?
 The Turnaround Strategy is a retrenchment
strategy followed by an organization when it
feels that the decision made earlier is wrong and
needs to be undone before it damages the
profitability of the company.
Indicators

 Continuous losses
 Poor management
 Wrong corporate strategies
 Persistent negative cash flows
 High employee attrition rate
 Poor quality of functional management
 Declining market share
 Uncompetitive products and services
 Need for
Turnaroun
d strategy

External Internal
causes causes
Steps in Turnaround
Strategy
 Situation re-evaluation
 Crisis Stabilization
 Strategy Redefining
 Employee Retention and reemployment
 Process and product improvement
 Financial restructuring
 Back to normal

Prof. Dilip Jain

MERGERS AND
ACQUISITIONS STRATEGIC
PARTNERSHIP
&
JOINT VENTURE
 MERGERS
 A merger is a combination of two or more companies into one larger companies.

 A transaction where two firms agree to integrate their operations on a relatively co-equal basis

because they have resources and capabilities that together may create a stronger competitive
advantage. The combining of two or more companies, generally by offering the stockholders of one
company securities in the acquiring company in exchange for the surrender of their stock.

 Merger commonly takes two forms that is Absorption and Amalgamation.

 A + B = A, where company B is merged into company A (Absorption)

 A + B = C , where C is an entirely new company (Amalgamation or Consolidation)

Prof. Dilip Jain 238

 EXAMPLES OF

MERGERS
In August 2017, ebay.in merged with • The Hindalco Novelis merger marks one
Flipkart to compete against of the biggest mergers in the aluminum
Amazon industry

 Indian e-commerce giant Flipkart • The Hindalco Company entered into an

Merge
agreement to acquire the Canadian
the Indian wing of eBay. company Novelis for $6 billion
 eBay and Flipkart have also
entered into
an agreement for cross-border
sale.

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Prof. Dilip Jain
• TYPES OF
MERGERS

Horizontal merger
Vertical merger
Conglomerate
merger

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 HORIZONTAL MERGERS
• Horizontal mergers take place when two companies similar
produce products and offering similar services in the same
industry
• Horizontal mergers take place with a motive to attain market
power

Example –
• Brook Bond and Lipton
• Bank of Mathura with ICICI
• Associated Cement Companies Ltd with Damodar Cement
 VERTICAL MERGER

• A vertical merger refers between two companies producing different goods and services for one
specific finished goods
• These are combination of companies that have a buyer – seller
relationship Examples –
• A car manufacturing company with tyre company
• A textile company acquires a cotton yarn manufacturer
• Pepsi ‘s merger with restaurant chains that it supplies with beverages.
• Pixar and Disney
 CONGLOMERATE MERGER
• This merger occurs when the companies are in different industry sector.
There are two types of Conglomerate Merges –
• Pure Conglomerate Merger – It involve firms in unrelated
business activities and
nothing is common in these firms
• Mixed Conglomerate Merges - It involves firms that are looking for
product extensions or market extensions
Example –
• PepsiCo – Pizza Hut
• Walt Disney and the American Broadcasting Company
• TATA - SKY
 BENEEFITS OF
MERGERS
1) Diversification of products and service
offerings

2) Increase in Plant capacity

3) Larger market share

4) Profit of research and development

5) Reduction of financial risk

Prof. Dilip Jain 244

 WHY DO MERGERS FAIL ?

1) Lack of human integration

2) Lack of communication
3) Clash of corporate cultures
4) Increased Business Complexity
5) Focuses on old organizational chart than new business process
 ACQUISITION
 Acquisition means to acquire or to takeover. It could be acquisition of
control, leading to takeover of a company. It could be acquisition of
tangible assets, intangible assets, rights and other kinds of obligations

 It is the buying of one company by another

 Example – Company A + Company B = Company

A
 An Acquisition can be friendly or hostile

Prof. Dilip Jain 246

 TYPES OF
 ACQUSITION
Friendly Acquisition - In this type, the target company’s board
negotiates or accept the offer in the friendly or welcoming manner

 Hostile Acquisition - In this type, the target company’s board is

not willing to be bought or the target company has no prior
knowledge of this offer

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247
 BENEFITS OF ACQUSITION
 To gain opportunities of market growth

 To gain a more dominant position in the market

 To acquire the skills or strengths of another firm to complement existing

business

 To diversify its products or service range in the market

 Reduction of Competition

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248
 Mergers and
 Acquisition
Walmart buys Flipkart.
 Ola acquires FoodPanda.
 AXIS Bank acquires Freecharge.
 Torrent Pharma acquired Unichem Laboratories Limited.
 Sony Corporation acquires TEN Sports from Zee.
 Havells India acquires Lloyd Electric’s Consumer Durable Business.
 Bharti Airtel acquires Telenor India.

Prof. Dilip Jain

 STRATEGIC
ALLIANCE
 A strategic alliance is a relationship between two or more entities that agree to share
resources to achieve a mutually beneficial objective, but do not necessarily form a new
entity

 A strategic alliance is less involved and less permanent than a joint venture, in which
two companies typically pool resources to create a separate business entity

 Joint venture and Strategic alliances work well when each partner’s objective are clear
and agreed

 The ultimate goal is learning and sharing resources and skills to achieve similar individual
objectives

Prof. Dilip Jain

 ADVANTAGES OF
STRATEGIC ALLIANCE
1. Organizational Advantage
 Learn some skills and obtain certain capabilities from your strategic partner
 Help enhance your productive capacity, provide a distribution system or
extend supply chain creating a synergy

2. Strategic Advantages
 Access to Target Markets
 Join with your rivals to cooperate instead of compete
 Get access to new technologies or to pursue joint R&D

3. Political Advantages
 Local foreign business to gain entry into a foreign market

Prof. Dilip Jain

 DISADVANTAGES OF
STRATEGIC
 ALLIANCE
Sharing of resources, information, skills

 Creating a Competitor for the future

 Uneven Alliances between weaker and powerful companies

 Cultural Differences

Prof. Dilip Jain

Joint
Venture
 What is joint
venture
 Its a type of business combination

 Companies enter into an agreement to provide

resources towards achievement of a particular
objective

 Joint venture refers to joint equity ownership in a

venture where partners bring complementary resources

 A joint venture may be organized as a partnership, a

corporation, or any other form of business
organisation

Prof. Dilip Jain

 Need for joint
 venture
To diversify risk

 To obtain distribution channels or raw materials supply

 To overcome insufficient financial or technical ability to enter a

particular line of business

 To achieve economies of scale

 To share technology and management skills in organisations

Prof. Dilip Jain

 Advantages
 Profit at low cost

 Flexible nature

 Start up push

 Share cost, expenses, benefit and risk

 Learning ground

 Enter into new markets

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 Disadvantages
 Flexibility is restricted

 Assets and claim

 Equal involvement is impossible

 Rapport information

 Differences in the cultures and management styles

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 Success factors in joint
venture
 Good communication, cooperation and coordination

 Common goals and shared vision among partners

 Dedication towards the success and long term sustainability

 Proper sharing of profits and benefits among partners

 Joint venture work towards the benefit of all partners

 Proper planning and research prior to the incorporation

Prof. Dilip Jain
 Factors hindering the success of joint
venture
 Lack of understanding between the partners

 Lack of motivation and patience among partners

 Benefits lower than expectations

 Operational difficulties due to geographical location of partners

 Difference and conflicts between partners on various issues

 Incompatibility of the culture and management styles of the partner

Prof. Dilip Jain

 Difference Between
Strategic Alliance and
Joint Venture
Joint Venture Strategic Alliance
 Joint venture refers to form of  Strategic alliance implies an agreement
business organization set up by admist two or more entities to work
two or more companies jointly with one another
 Joint venture do not continue to  Strategic alliance continue to operate
operate as independent companies as independent companies
 May or may not exist
 Contract exist
 Collaboration or corporate partnering
 Form of strategic alliance
 There is no separate legal entity
 There is a separate legal entity
 The objective is reward maximization
 The objective is risk limitation
Prof. Dilip Jain
 Vertical Integration
Definition
 The process in which several steps of the production
and/or distribution of a product or service are controlled by
a single company or entity, in order to increase its power
in the market
 Vertical integration is a strategy where a company
expands its path business operations into different steps
on the same production path

Prof. Dilip Jain

 What is Vertical
Integration
 Vertical integration is a business strategy used to
expand a firm by gaining ownership of the firm's
previous supplier or distributor.
 Vertical integration is when a company controls more
than one stage of the supply chain.
 It refers to the degree of integration between a firm’s
value chain and the value chain of its suppliers
and distributors

Prof. Dilip Jain

 Types Of Vertical
Integration
Forward Integration
 It is a method of vertical integration in which a firm will
gain ownership of its distributors

Backward Integration
 It is a method of vertical integration in which a firm will
gain ownership of its supplier.

Prof. Dilip Jain

 Advantages Disadvantages
 It allows you to invest  It requires a huge
in assets that are amount of
highly specialized. money.
 It gives you more  It can bring about more
control over difficulties.
your business.  It can result in
 It allows for positive decreased flexibility.
differentiation.  It can create some
 It offers more cost barriers to market
control. entry.

Prof. Dilip Jain

Offensive and Defensive Strategies

New tools Update Current tools

Prof. Dilip Jain

 OFFENSIVE
STRATEGY
• Direct attacks: Price cutting, adding new features, or going
after poorly served markets

• End-run offensives: Seeking unoccupied markets

• Preemptive competitive strategies: Being first to obtain

particular advantageous position

• Acquisitions: Buying out a competitor

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Prof. Dilip Jain
Types of Offensive
Strategies
The strategy also implies the use of both direct and indirect attacks. In the
following the different types of attacks are being mentioned and described.

Flank attack: Attacking the competitor on the weak point or blind spot. It is less
risky than the previous kind of attack as it follows the path of least resistance
where competitor is incapable of defending.

Frontal attack: Attack with similar products, price quality promotions and
distribution. It is considered to be highly risky unless attacker has a clear
advantage. Likewise, it is focused on competitor’s strengths rather than
weaknesses.

Guerilla attack: Small hit and run attacks to destabilize the competitor. The
attacks can take various forms.

Bypass attack: Also known as the leap frog strategy, it involves overtaking the
competitors by introducing new strategies as well as diversifying the products.
Prof. Dilip Jain 267
 DEFENSIVE
STRATEGY
• Attempts to reduce risks of being attacked

• Convince an attacking firm to seek other targets

• Exclusive contracts with best suppliers

• New models to match competitor’s lower prices

• Public announcements about the willingness to fight

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 Types of Defensive
1. Strategies
Position Defence - The position defense is the simplest defensive strategy. It
simply involves trying to hold your current position in the market.
2. Flanking Defence - When a firm uses the flanking defense, it defends
its market share by diversifying into new markets and niche segments.
3. Preemptive Defence – The strategy involves attacking a competitor before
you get attacked by it.
4. Counter Offensive Defence - The counter-offensive defense is a retaliatory
strategy. When a competitor attacks your business, you strike back with your
own attack.

5. Mobile Defence - The mobile defense involves making constant changes to

your business so that it is difficult for competitors to compete with you.
6. Contraction Defence - The contraction defense is the least desirable
defense because it involveVIsVA_rAetrt_i rSeMa_2t0in21g2-2from markets.
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