Discuss turnaround strategies and when an organization needs to develop one. Give an example of
a company that has recently taken on a turnaround strategy. Did it work? Explain.
Turnaround strategies are strategies companies used when they are in the need for reducing costs,
spending, or the quantity of something because of different decisions that were made that are
affecting the company’s profitability. It could be a strategy that seemed and started off good at a
specific time but starts to deteriorate later down the line. This could be due to marketing strategy,
quality of the product being produced, cost of product production overall compared to profit being
made, poor management which could lead to a high turnover rate or consumers interest overall. All
these things affect a company’s profit in a negative manner which should lead them to develop a
turnaround strategy so they may be profitable and rebuild their reputation.
There were a lot of companies that recently have taken on a turnaround strategy. The one I like to
discuss is Netflix. Netflix was founded in 1997 and responsible for shipping out millions of DVD’s
daily for a low cost. A lot of people blame them for Blockbuster going out of business because of
their competitive rates and quick access to DVDs. Due to the growth of the company, CEO Hastings
thought it was a good idea to split subscriptions and raised the prices of DVD rentals and unlimited
streaming services. Of course, consumers were use to the cheap service and didn’t like change, so
Netflix lost a lot of customers at this time which dropped stock value by 77%. It seems like Hastings
was thinking ahead of his time in strategic planning and was willing to take on the risk. Now Netflix is
one of the most profitable companies that provide consumers with streaming services.
https://www.forbes.com/sites/adamhartung/2013/01/29/netflix-the-turnaround-story-of2012/#2bbb460726ab
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