POST 1) 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. Simply put, a turnaround strategy is a plan to stop a company from continuing to fail, go bankrupt, or be taken over by another company. It is also known as reconstruction. The key element that make a turnaround strategy different than a normal strategy, to improve a business, is the speed at which the changes must occur. The improvements need to be done quickly and must be significant (Johnson, Whittington, Scholes, Angwin, & Regner, 2014). One example of a failed turnaround strategy was the movie rental company Blockbuster, who filed for bankruptcy in 2010. Blockbuster was once a top destination for parents and their children. That came crashing down when Blockbuster failed to see emerging threats and execute a turnaround strategy fast enough to save their business. Their failure is linked to a meeting in 2000 between the founder of Netflix, Reed Hastings, and the CEO of Blockbuster, John Antioco (Satell, 2014). Hastings proposed that Netflix would run Blockbusters online business and Blockbuster would put up advertisement for Netflix in their stores. Hastings was not taken seriously and 18 years later his company is a multi-billion dollar business known world-wide, while the other is a company that younger kids have never heard of. The main problem was that Antioco was unable to forecast how the online industry would change the game for movie rentals. Blockbuster made most of their profits based on late fees. Netflix had a subscription based model so late fees were not an issue. In 2004 Antioco realized he must make a change regarding late fees and online services, but it was too late. His turnaround strategy for Blockbuster failed because it was not quick enough to adjust to the changing environment and was not as significant as it could have been.
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