Top 5 Company Restructuring Strategies To Consider

Top 5 Company Restructuring Strategies To Consider

Whether large or small, every business experiences a period of turbulence. Thus, companies tend to pursue business restructuring to stay afloat and conduct business more efficiently and profitably.

Companies undergo a restructuring process to deal with any weaknesses and inefficiencies. These may include a fall in profit margin, changes in ownership or corporate strategy, or increased cash flow.

A corporate restructure mainly depends on its specific conditions, attributes, and purpose for the reorganisation. In this guide, we will tell you 5 company restructuring strategies used by businesses to create profitability:

1. Mergers & Acquisitions (M&A)

Mergers are one of the most common business restructuring strategies. They occur when one company takes over an existing company through the method of amalgamation or ingestion. Mergers and Acquisitions (M&A) unite two companies into a single organisation with an aim to rapidly increase revenue, production capacity and market reach. This is done without the time and hard work of building a new company.

2. Reverse Merger

The reverse merger allows unlisted public corporations to convert to listed companies without issuing an IPO (Initial Public Offering). In a reverse merger, a private company purchases a controlling stake in a public company under its name. As a result, it gains control of the board of directors.

3. Disinvestment

Disinvestment is a simple corporate restructuring strategy in which a company sells its subsidiaries, divisions, or other business units to avoid bankruptcy, decrease debt and maintain a low debt-to-equity ratio.

4. Joint Venture

A joint venture refers to creating a new business entity between two or more companies to handle a particular situation. The companies involved in the joint venture agree to share expenses, income, ownership, management, and control for one common goal.

5. Strategic Alliance or Business Alliance

In this strategy, two or more companies agree to unite while maintaining their own identities. The goal of this union is to achieve common objectives such as cost savings, technology exchange, product creation, and market access.

Hire Trusted Professionals to Determine The Best Strategy For Your Organisation

The first step towards determining the best company restructuring strategy for your organisation is hiring trusted professionals from Zimsen Partners Pty Ltd. Our professionals bring a wealth of knowledge and experience to the table to help you make informed decisions about your company’s future.

Whether you need help with marketing, finance, or operations, hiring our experts can ensure that you are making the right choices for your business and that you are on track to success.

To learn more about how we can help you enhance your business’s corporate structure, call us at 03 7065 5555.

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