restructuring strategic growth 18.03.10

RESTRUCTURING FOR STRATEGIC GROWTHDr. Joachim Behrendt

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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

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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


Source: FT / Thomson Reuters

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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


Source: FT / Thomson Reuters / I-Spirit

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NEconomic Outlook Europe


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

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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.


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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)


Sources: Turkstat, CBT, Treasury, Ministry of Finance, ING Bank , ING Global Forecasts

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A Z

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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


Source: DPT, Ekonomik Gelismeler, Eyll 2009

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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

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HThe Risk of Strategic Drift


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

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SEA

PP

RO

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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


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


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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

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LYSIS

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Analysis Example: Market Research Retail


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

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NA

LYSIS

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SWOT Analysis Textile Industry


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

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Options 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

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NA

LYSIS

& O

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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


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NA

LYSIS

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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


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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


STR

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YE

VA

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Suitability: Product Lifecycle Analysis


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

LUA

TION

Suitability: Sustainability of Core Competencies


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

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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


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


Forecast: F12

Frequency Chart

.000

.007

.014

.021

.028

0

7

14

21

28

-500.00 -250.00 0.00 250.00 500.00


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

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YE

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Feasibility: Cash Flow Planning


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)

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RESTR

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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


RESTR

UC

TUR

ING

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

TUR

ING

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

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IMP

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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

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Assignment of Strategic Tasks

Assignment of strategic targets and strategic tasks for every manager

Deadlines: initial January, afterwards quarterly


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.

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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


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

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Strategic Performance Evaluation


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


Average

evaluation 1-

4

Actual fig. :

Target fig.

Strategy

review

Filiz,


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


Project Milestones 10% 100%

Act.days - last

MS/start :

Proj.days

Actual fig. :

Target fig.

Resource


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


Rebooking rate 10% 35%

Signed offers

old cust.

month /

written offers

Actual fig. :

Target fig. CRM

Tlay,

aggregation


Personal


Average

evaluation 1-

4

Actual fig. :

Target fig.

Employee

evaluation

Filiz,


Strategic Target


Average

evaluation 1-

4

Actual fig. :

Target fig.

Strategy

review

Filiz,


AG

END









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


RESTR

UC

TUR

ING

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


RESTR

UC

TUR

ING

TEA

MProject Tools


RESTR

UC

TUR

ING

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


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]

restructuring strategic growth 18.03.10

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