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Definition

Turnaround

Turnaround refers to a grand strategy of cost reduction and asset reduction by a company to survive and recover from declining profits .  It typically is begun through one of two forms of retrenchment, employed singly or in combination:

  1. Cost reduction. Examples include decreasing the workforce through employee attrition, leasing rather than purchasing equipment, extending the life of machinery, eliminating elaborate promotional activities, laying off employees, dropping items from a production line, and discounting low margin customers.
  2. Asset reduction. Examples include the sale of land, buildings, and equipment not essential to the basic activity of the firm and the elimination of “perks” such as the company airplane and executives cars.

Definition 2.

Turnaround is the length of time between arriving at a point and being ready to depart from that point.

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