In today’s business environment, the only constant is change. Companies that do not adapt to change and trends may face the risk of their product or services becoming obsolete. Therefore, businesses need to test and experiment with new products/service lines, identify opportunities and explore new markets, target new groups of customers on a continuous basis. As a result, business may decide to rearrange its organisational structure or business model.
WHY DO COMPANIES RESTRUCTURE?
Corporate restructuring is often determined by the need for a company to change its business structure or the need to make financial adjustments to the company’s assets and liabilities.
We have identified the most common reasons business restructure such as:
- Reduce costs
- Lower risks
- Decrease or consolidate debt
- Improve its competitive advantage
- Incorporate new technology
- Increase operational efficiency
- To spin off a subsidiary company
THE RESTRUCTURE PROCESS
Efficient and precise planning is essential to achieve a successful restructure outcome. It is vital to enlist the guidance of a qualified professional during the initial planning period.
The process occurs in the following stages:
- Defining the areas where the company need to be restructured
- Identifying the weaknesses needing to be corrected
- Creation of plans to correct the identified weaknesses via the restructure
- Calculating and securing corrective action
- Evaluating the results
The successful restructuring of a company allows it to reap many benefits. Financially, corporate restructuring provides the benefits of:
- Reviving a declining business
- Increasing the organisational value
- Preparing the company for sale or transfer to the next generation
In addition to this, other benefits include a competitive advantage by:
- Placing the company in a position for growth
- Allowing for the addition of new accounts
- Enabling the expansion into other graphical areas
The overall benefits of corporate restructuring can be summed up in two words: survival and success, which is central to Synergy’s ethos “Making better companies.”
Does the benefits of corporate restructuring appeal to you? Find out how we can help contact us for an expert consultation email firstname.lastname@example.org or call +971 4 563 7302.