As one effect of the global economic crisis beginning in 2007, many companies suffered from strong decreases of incoming orders. At the same time, banks went over to a reserved willingness to grant credits, out of concerns about bankruptcies of debtors. This led to the result that companies were not able to meet liabilities that were incurred during the prior phase of economic upswing.
For some companies, this chain of events led to a massive decrease of solvency, possibly resulting in a bankruptcy. But concerning other companies, the worsening of their economic situation was just accelerated by the economic crisis. The main reason for their company crisis was the fact that severe mismanagement had occurred in the past.
Mismanagement often is the cause of a so-called strategic crisis. This means that the general market orientation of a company is inadequate. However the problem with this is that it cannot be detected at first sight, and therefore often no countermeasures are taken in order to avoid a negative development. The strategic crisis can then develop into an earnings crisis. In this stage, the indicators that certain things are going wrong within the company are more significant and measurable within the company’s figures. If countermeasures are not taken, this will finally lead to a liquidity crisis, in which the company faces massive problems. It is not able to pay liabilities, loan capital cannot be acquired and the company faces the danger of illiquidity or bankruptcy.
This is where turnaround management gets involved. The main objective of turnaround management is to reverse negative trends that have are likely to become or already have become an existential threat to the company and to ensure its long-term success.
One factor which has a massive influence on a company’s success is its marketing. Marketing, however, is a complex term, which can be discussed under various aspects and covers several areas and activities of a company.
One possibility to assess the term marketing by a practical approach is the concept of marketing mix. Hereby, the marketing of a company is made visible by dividing the application of marketing activities to the market into the four elements product, price, place and promotion.
This leads to the possible question of how the marketing mix and its single elements can be adjusted to the challenges of the turnaround process, in order to contribute to the overcoming of a crisis.
- Quote paper
- Sven Adrian (Author), 2011, Turnaround Management. Adjusting the Marketing Mix to the Challenges of the Turnaround Process, Munich, GRIN Verlag, https://www.grin.com/document/215285
